The government is hoping to open up the domestic air travel market to the private sector to set up a domestic airline, in a bid to boost connectivity within the country for high-end domestic and foreign tourists.
The Finance Ministry’s National Agency for Public-Private Partnerships (NAPPP) had concluded the expressions of interest round for the airline in mid-February.
The airline is expected to utilize the domestic airport network and facilitate tourist transport to major tourism destinations in the island.
Currently, there is little competition in the domestic air travel market. The Air Force has a near monopoly on civilian air travel via the domestic airport network. John Keells Holdings PLC’s Cinnamon Air meanwhile provides services via the air taxi service, utilizing the amphibian aircraft operating from large water bodies near the key tourism attractions.
Initially, the proposed domestic airline is expected to have a fleet of at least two modern turboprop aircraft, having not less than 12 passenger seats capacity.
It is expected to use Bandaranaike International Airport as a base and operate a hop-on-hop off service involving multiple airports.
The operator is expected to identify the preferred domestic airports and schedule routes.
Even the airports operated by the military may be opened for the airline, subjected to government permission.
The investor is also expected to carry out the essential upgrades at the selected airports, using government funding.
Expressions of interest are called for, from prospective investors, who are experienced in international, local or joint venture businesses with locals, who have adequate financial resources to fulfil the potential obligations arising from the submitted operating plan, especially during the initial years.
The investor is expected to satisfy all the published civil aviation requirements for operation of commercial air services, the NAPPP said.
With the commencement of the proposed airline, all military-owned domestic civil aviation operations will be halted, according to the NAPPP.