Business
Forward plans to transform Sri Lanka into a global aviation and logistics hub
Harischandra Gunaratna of The Island Financial Review speaks to Andre Fernando, Managing Director of MAC Holdings (PRIVATE) LTD
Sri Lanka’s strategic location in the Indian Ocean among major air routes connecting Asia, Europe, Africa and the Middle East, offers a unique opportunity to transform the island into a thriving aviation hub. With the right investments and policy changes, Sri Lanka can leverage its geographical advantage to bolster tourism, facilitate international cargo & passenger transportation, and serve as a key transit point for passengers and goods. This vision not only promises to boost the nation’s economy but also has the potential to redefine its position on the global aviation map. Perfect example is the growth of 4 prominent airlines; Emirates, Fly Dubai, Air Arabia and Etihad and their importance to the economy of UAE, which was a desert in the mid-1990s.
Why Sri Lanka is well-suited to be an aviation hub
Strategic Location: Sri Lanka’s proximity to major global markets—India, China, Southeast Asia, Africa the Middle East and Europe—makes it a perfect transit point for airlines and cargo carriers. This natural geographic advantage means shorter flight routes and lower fuel costs for airlines choosing to hub in Sri Lanka. Sri Lanka could also be the best hub to connect passengers and cargo to Africa and minimize the long deviation one has to take by travelling via Middle- East hubs of Dubai, Abu Dhabi, Doha or Bahrain.
Tourism Potential: The country has long been a magnet for tourists due to its rich culture, pristine beaches, wildlife, and heritage sites. A strong aviation sector will help open new tourism markets, providing better connectivity to key destinations.
Cargo Hub Opportunity: Sri Lanka is positioned at the crossroads of key maritime and air trade routes, making it an ideal center for logistics and cargo services. With growing demand for air freight in e-commerce and perishable goods, Sri Lanka could serve as a bridge for goods moving between East and West. PPP investment at BIA must be done to invest in a courier and e-commerce hub terminal which is a dire necessity.
What are the steps to establish Sri Lanka as an aviation and cargo hub?
1. Upgrade Infrastructure
Expand Airport Facilities: The Bandaranaike International Airport (BIA) in Colombo is Sri Lanka’s primary international gateway, but it faces capacity constraints. Expanding BIA’s terminals and runways to accommodate more flights and passengers is essential. Mattala Rajapaksa International Airport, located in the South, can also be developed as a complementary MRO facility and also a secondary airport for leisure charter flights to be moved to tourism hot spots like Passe kudah, Yala and Arugam bay.
Enhance Ground Handling and Technology: To attract airlines and cargo carriers, Sri Lankan airports need world-class ground handling services, including efficient passenger & cargo handling, including that of passenger baggage, faster immigration & customs clearance and seamless technology integration for booking and scheduling. In order to be competitive one could also moot a 2nd ground handling service which can be a PPP and compete with Sri Lankan airlines.
2. Attract More Airlines and Routes
Open Skies Policy: Adopting more liberal air service agreements with key markets could encourage international airlines to increase their services to Sri Lanka. An open skies policy, or at least partial liberalization, could make Sri Lanka more accessible to global carriers and stimulate both passenger and cargo traffic.
Partnerships and Code Shares: Encouraging SriLankan Airlines to forge stronger code-sharing partnerships with major international carriers would facilitate seamless connectivity, making the island a more attractive stopover for passengers.
3. Develop Cargo and Logistics Capabilities
Establish Free Trade Zones (FTZs): Strategically located Free Trade Zones (FTZs) near the airport, with efficient customs and logistical services, would help attract multinational logistics firms to use Sri Lanka as a warehousing and distribution hub.
Cold Storage and Perishables Handling: Investing in cold storage facilities at airports would allow the nation to become a key player in handling perishable goods, such as food and pharmaceuticals, which require specific conditions during transport.
Leverage Port-Aviation Synergy: The close proximity of Colombo’s port to the airport offers unique opportunities for an integrated sea-air logistics system. Creating multimodal logistics corridors between the Port of Colombo and BIA would enable seamless movement of goods, particularly for time-sensitive shipments.
4. Boost Human Capital and Expertise
Training and Development: Investing in training programs for aviation personnel, including pilots, ground crew, air traffic controllers, and cargo handlers, will ensure a skilled workforce capable of meeting global standards. Minimizing the loss arising from our experienced and trained staff migrating to Middle East countries is a must. This will naturally stop if we can make Sri Lanka a key aviation hub as our salaries will improve to match regional markets in the Middle East and Asia.
Aviation Management Schools: Developing educational institutions focused on aviation management, engineering, and logistics will cultivate local talent, reducing dependence on foreign expertise while fostering innovation within the sector.
5. Enhance Tourism Infrastructure
Create More Tourist Attractions: Developing world-class infrastructure, including hotels, theme parks, and luxury resorts around key airports, will make Sri Lanka more appealing as a tourism destination.
Improve Connectivity: Strengthening the domestic aviation network will allow international tourists to easily explore all corners of the island. Investments in regional airports, like those in Jaffna, Hambantota, and Trincomalee, can play a critical role in this.
6. Sustainability and Eco-Friendly Practices
Green Airports: Building eco-friendly airport infrastructure and encouraging the use of renewable energy can enhance Sri Lanka’s image as a sustainable tourism destination.
Carbon Offsetting Programs: Implementing carbon offsetting schemes for airlines operating in Sri Lanka will help mitigate the environmental impact of increased air traffic and appeal to environmentally conscious travelers.
What are the benefits of a Sri Lankan aviation hub?
Economic Growth: A well-functioning aviation hub will drive investment, create jobs, and increase the island’s GDP. From tourism to freight forwarding, the aviation sector can have a multiplier effect across industries.
Boost to Tourism: As Sri Lanka becomes a transit point, it will increase exposure to new tourists who can be enticed to stay and explore the country. Targeting niche tourism, such as medical tourism, eco-tourism and adventure travel, will diversify the industry.
Enhanced Trade and Connectivity: The establishment of a logistics hub will facilitate regional and global trade. Sri Lanka will become the go-to center for re-exports and regional distribution, attracting multinational companies to use its airspace and logistics capabilities.
What are the challenges to overcome?
While the potential for an aviation hub is promising, Sri Lanka must overcome several challenges to achieve this goal:
Political Stability: For long-term investments in aviation infrastructure, political stability and consistent policies are necessary.
Regulatory Framework: A transparent and investor-friendly regulatory environment will be essential to attracting foreign airlines and logistic operators.
Financial Investment: Developing airports, logistics centers, and tourism infrastructure will require significant financial resources and strategic public-private partnerships.
(Andre Fernando is a self- made entrepreneur and the grandson of a billionaire businessman from Wattala,Boniface Fernando hailing from an era when billionaires were far and few in the country. Fernando is the chairman of the Transport and Logistics committee of the National Chamber of Commerce of Sri Lanka)
By Ifham Nizam
The International Monetary Fund (IMF) has become a polarizing figure in Sri Lanka as the country grapples with a deep economic crisis. The austerity measures proposed by the IMF, aimed at addressing the nation’s debt burden, have sparked widespread discontent among ordinary citizens, said Hemantha Withanage, Chair of Friends of the International, a large network of grassroots environmental organizations from 74 countries.
Withanage added that the roles of the IMF and the World Bank in Sri Lanka over the past eight decades have been significant but complex. While their contributions to economic stabilization and development are notable, they have also provoked challenges and criticisms regarding social equity and governance.
He stressed that the critical question remains whether the people of Sri Lanka have truly benefited from their long-standing relationship with these institutions—a dilemma that continues to persist.
Speaking to The Island Financial Review, Withanage highlighted that the IMF’s influence in Sri Lanka dates back decades, shaping the country’s economic landscape through financial assistance, policy advice and development projects. However, the recent debt crisis, exacerbated by the pandemic and geopolitical tensions, has brought the IMF’s role into sharp focus.
Withanage added: ‘The IMF’s proposed measures, including tax hikes and spending cuts, have been criticized for disproportionately affecting the poor and vulnerable. Many argue that the government should prioritize debt restructuring and explore alternative avenues for economic recovery rather than imposing harsh austerity measures.
`Despite these challenges, the IMF remains a key player in Sri Lanka’s economic future. The country’s recent agreement with the IMF for a bailout package offers a glimmer of hope, but the road to recovery is likely to be long and arduous. As Sri Lanka navigates these turbulent times, the debate over the IMF’s role and the effectiveness of its policies will continue to shape the country’s economic destiny.
`IMF has become a prominent topic in Sri Lanka due to the austerity measures it proposed to address the country’s debt crisis. These measures have increased taxes for ordinary citizens, while the previous interim government warned that Sri Lanka would face further difficulties if it did not adhere to the IMF package agreed upon in mid-2022.
‘The IMF package was a key issue in the recent presidential election, resulting in a significant loss for the interim president, a strong proponent of IMF solutions. The election was won by left-party politician Anura Kumara Dissanayake, who takes a more measured approach to the IMF.
`Over the past 80 years, IMF and the World Bank involvement in Sri Lanka has included a mix of financial assistance, policy advice, and development projects, significantly influencing the country’s economic trajectory.
‘The IMF’s and World Bank’s impact on Sri Lanka’s economy and society has been multifaceted. On the one hand, their financial assistance and development projects have contributed to essential advancements in infrastructure, health, and education. Rural communities have benefited from improved access to basic services and economic policies supported by the IMF have, at times, restored macroeconomic stability.
‘On the other hand, the social costs associated with structural adjustment programs and austerity measures have raised concerns. Focus on market-driven policies often overlooked the needs of the most vulnerable populations. Inequality and poverty remain pressing challenges, as the benefits of growth have not been evenly distributed. Whatever the solutions these spin doctors have given, about 24% of the population became poor due to the debt crisis that began in 2020.
‘According to a more recent report by the FAO and the United Nations World Food Programme, it is estimated that 3.9 million people or 17% of the population, are in moderate acute food insecurity. The IMF has trained bureaucrats and politicians to praise its work and seek its advice constantly. Since joining the IMF, Sri Lanka has received assistance at least 16 times. While we’ve addressed some issues, our debt continues to rise, adversely affecting the population.’
Under the UN Decade of Action 2021 – 2030 in Sri Lanka, the Automobile Association of Ceylon (AAC) is currently conducting Road Safety Programmes, especially among schools in the rural areas, aimed at impressing on elders and children the advisability of wearing helmets while riding two-wheeler vehicles.
During the last weekend such programmes to educate children, parents, teachers, motorcyclists and many others in the Horana area of the importance of wearing helmets were conducted. The safety of children was a prime focus.
Police officers from Traffic Headquarters conducted lectures and demonstrations on the importance of children in particular wearing helmets when they travel with their parents and elders on two-wheelers.
The purpose of this project by the Association is to curtail the fatalities and injuries suffered by motorcyclists and pillion riders. In 2022, it was recorded that there had been 806 deaths among motorcyclists, of which 411 deaths were those of below the age of 18 years. Disabilities amounted to 5,133.
Traffic Police officers of Horana, assisted the Automobile Association by collecting the required data from among children who attend schools in the area but who do not wear helmets when they travel on the motorcycles.
Ananda Dangalla – Vice President & Devapriya Hettiarachchi- Secretary of the Automobile Association of Ceylon together with the OIC Panawala Police Station, Horana, and Dayal Kariyawasam of the Traffic Police headquarters attended the events. A helmets handing over ceremony was held at the police station, Horana and many schoolchildren of the area and their parents attended the function. Fifty children who do not wear helmets but who travel with their parents on motorcycles were selected by the Traffic Police – Horana for the purpose of donating helmets. (AAC)
The Commercial Bank of Ceylon has been ranked second in the prestigious ‘LMD 100’ for 2023-24, moving up five places in the ranking the magazine calls ‘Sri Lanka’s Roll of Corporate Honour.’
With this latest LMD ranking Commercial Bank has not only retained its status as the highest-ranked bank in the LMD 100, but has also overtaken some of the country’s biggest diversified business groups in terms of turnover, on which LMD’s primary ranking is based.
Commercial Bank also has the distinction of being in the Top 10 of the LMD ranking every year since it was first published, 31 years ago.
“The bank is truly delighted to have secured second place in the LMD ranking, a testament to our strong performance over the past financial year,” Commercial Bank Managing Director/CEO Mr Sanath Manatunge said. “It is an unequivocal demonstration of the intrinsic financial strength, deep-rooted resilience and agility of the Bank. This ranking is also a tribute to the commitment of the Commercial Bank team to achieve growth in adversity.”
Besides its turnover-based primary ranking of Sri Lanka’s leading listed companies, LMD also ranks companies by sector as well as by total assets, profit after tax, shareholders’ funds, market capitalisation and other performance indicators. The LMD 100 ranking encompasses many of the country’s leading conglomerates, telcos, retail giants, insurers and other sector leaders, as well as listed banks.
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