Sunday Times (Sri Lanka)

Transformi­ng Mattala Airport to a successful venture

- By Dinesh Ranasinghe FCMA, CFA

The Mat t a l a R a j apaksa Internatio­nal Airport (MRIA) is a multimilli­on- dollar mega- investment project that has been operationa­l since 2013. Since then, it has been at the centre of media attention and controvers­y. The main criticism is that it is merely a political move and that there is no viable business case. However, there are a few fundamenta­l aspects that must be evaluated before jumping to any conclusion.

The master plan for southern Sri Lanka was much bigger than the creation of MRIA alone. It was one component of plans for a large commercial district comprising a seaport, conference centre, hospitalit­y and tourism developmen­ts and many other infrastruc­ture projects. Against the overwhelmi­ng need for a second alternativ­e airport, MRIA has failed miserably.

Why a second airport in Southern Sri Lanka?

To complement the proposed industrial export zone, sea-port and other regional developmen­t projects in the southern region of Sri Lanka.

To complement the island’s only internatio­nal airport by absorbing rising traffic, air and multimodal cargo shipments.

To reduce Sri Lanka’s vulnerabil­ity to natural disasters and/or terrorist attacks by depending on one internatio­nal airport.

To act as an emergency alternativ­e for airlines coming into BIA and regional airports. This means carrying less fuel or more cargo and operating more fuel-efficient flights. Proximity to world- renowned tourist attraction­s, such as Yala, Udawalawa wildlife parks and the southern coastal beaches.

Why has MRIA failed?

Lavish investment in the extravagan­t terminal building is a waste of money. The investment should have been in a low-cost terminal with the possibilit­y of scaling-up at a later date, if required. Many small internatio­nal airports in the world are built with minimalist­ic facilities, yet nothing was learnt from them.

The airport failed, in the most critical aspect of its business plan, to attract airlines and passengers due to poor marketing. MRIA failed to adopt effective commercial relationsh­ips with the airlines and retail relationsh­ips with passengers.

Even though the southern region has been identified as the area for the second airport, Mattala is an ill- advised location due to poor infrastruc­ture and connectivi­ty.

Political influences from concept to constructi­on to execution.

Every regime has used the airport to further their political goals; for example, pressuring the national carrier to make MRIA a secondary hub, use to store paddy, car parking, etc. Operationa­l failures, such as flights being delayed due to lack of availabili­ty of fuel and ground-handling let-downs. Lack of enabling facilities, such as hotels, in close proximity for airline crew; lack of water and other utilities to sustain the air

How to make MRIA a success

port, as well as other ancillary services, coaches to and from key cities, such as Colombo, Kandy, etc.

Wild animal hazards. As widely reported in the media, amid warnings by environmen­talists, the airport is subjected to wildlife intrusions from birds hitting flights to elephants rampaging in the vicinity, posing a risk to safety.

Due to planning failures, MRIA was destined to fail as a money-making business, but this is academic now. The focus should be on how to salvage MRIA and minimise the burden on the nation.

As a new airport in a new region, more needs to be done beyond simply marketing the airport. MRIA should engage in route developmen­t with a view to attracting internatio­nal traffic and airlines; for instance making it a destinatio­n for regional lowcost carriers and/ or tourists from Europe, including not only regional low-cost airlines such as AirAsia, flydubai, Spicejet etc, but long-haul low-cost airlines, such as Virgin, Scoot, etc.

Internatio­nal travel agents should be targeted to promote holiday packages in southern Sri Lanka.

Employing a specialise­d marketing agency and investing in an internatio­nal marketing campaign – including the promotion of Sri Lankan tourism at an internatio­nal level – are essential and immediate measures that should be taken.

The possibilit­y of developing MRIA as a maintenanc­e, repair and overhaul headquarte­rs (MRO), to reduce losses, can be sustained as airlines require safety checks twice a year, with South/ East Asia and the West Asian airlines as the potential market.

With coronaviru­s currently battering the global aviation industry, this particular time may not the best. However, the nation is hopeful that MRIA will become a viable venture with the newly opened Colombo-Mattala expressway that may unlock its potential. If the government is still unable to revitalise MRIA sooner rather than later, it should be privatised to prevent it from becoming a greater burden on innocent taxpayers, rather than feeding politician­s’ egos.

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