Aviation sector to be liberalized!

Aviation sector to be liberalized!

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Sri Lanka’s Civil Aviation Authority (CAA) plans to sign open skies bilateral air service agreements with 20 strategically important nations and review existing airport taxes, with the twin aim of liberalizing the aviation industry and boosting tourism arrivals.
In an exclusive interview with Ceylon FT, Civil Aviation Authority of Sri Lanka, Director General and Chief Executive Officer (CEO), H. M. C. Nimalsiri said that CAA plans to sign open skies agreements with 20 new countries including Singapore, India, UAE, UK, Turkey and The Netherlands during the upcoming International Civil Aviation Organization (ICAO) Air Services Negotiation Event (ICAN2017), which will be held in Colombo from 4 to 8 December, 2017.

Elaborating on the nature of the agreements Nimalsiri said, “we have adopted a policy of going for open skies agreements in terms of the 4th and 5th freedoms, which allow basic international service between two countries. However, when it comes to the 5th freedom, which allows an airline to carry revenue traffic between foreign countries, as a part of services connecting the airline’s registered country, our openness is based on the principles of reciprocity, only where we are also being offered the same option.”

He highlighted that CAA prioritized tourism when selecting these 20 countries and ICAN2017 would be a good opportunity to promote Sri Lanka as a tourist destination.
“We want such freedoms to be opened without any restrictions, promoting a particular route segment. We want to be as liberal as possible by removing capacity restrictions; hence we can promote travel between these destinations.”
He further said that more carriers will provide a better transport arrangement for passengers and that it will lead passengers to choose Sri Lanka as an optimum route for air travel.
Commenting on the possibility of Sri Lanka becoming Aviation Hub, he said that would require extensive marketing. However, he pointed out that Sri Lanka was not in a position to carry out such a marketing campaign by itself. He said that once international carriers start coming to Sri Lanka with frequent daily operations, the carriers will carry out the required marketing by themselves, negating the need for government expenditure, enabling Sri Lanka to become an aviation hub.
Nimalsiri averred that if the national carrier SriLankan Airlines is competitive enough, it will be able to capture a considerable share of the aviation market in future.

Admitting that the current airport taxes are high, he revealed that CAA put forward the high taxes to the attention of the Government and, acknowledging these concerns, the Government has decided to review the airport taxes by appointing a committee very soon, which will determine if the current fares are on par with the regional neighbours. The Government last year increased Embarkation Levy to US $ 50 from US$30 with the Treasury collecting US$35.

He pointed out that charter flights are discouraged from coming into Sri Lanka as most passengers on charter flights travel on packages and due to Sri Lanka’s high entry charges, prices of packages to Sri Lanka are high compared to other destinations.
“We need to bring down the cost of entry to Sri Lanka and create more opportunities for tourists to spend more during their stay, instead of focusing purely on entry charges.” Nimalsiri said.

Sri Lanka won the bid to host ICAN2017, defeating the UAE. The event provides ICAO members with a central meeting place to conduct multiple bilateral air services negotiations or consultations. CAA is also expected to utilise this opportunity to renew existing air service agreements which are about to expire. Sri Lanka has entered into bilateral air service agreements with 74 countries altogether, only a handful of which are open sky agreements.

“All 72 ICAO Member States have registered for the event and we expect 500-600 foreign delegates to arrive for the event. The delegations will consist of secretaries, aeronautical authorities, airline chairpersons and other senior management,” added Nimalsiri.
The International Civil Aviation Organization (ICAO) is a UN specialized agency, established by States in 1944 to manage the administration and governance of the Convention on International Civil Aviation.

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