Undressing The SriLankan Bride
Rajeewa Jayaweera
According to a circular received by all staff of SriLankan Airlines, based on a recommendation of the Sub-committee on Economic Affairs, the government has decided to handover ground handling activities at Bandaranaike International Airport (BIA) to Airport & Aviation Services Ltd. (AASL), operators of the Colombo and Mattala International Airports. Ground Handling Services, hitherto handled by the national carrier SriLankan Airlines includes handling of Passenger and Cargo related services at the airport for all carriers operating into BIA. Sri Lanka’s different national carriers since independence have held a monopoly in ground handling.
According to the circular, employees of the national carrier currently involved in ground and cargo handling (Terminal, Ramp and Cargo staff amount to around 2,550) along with all assets and liabilities if any in respect of Ground Handling will be transferred to the new company. Employees have been informed, the employment terms and privileges of those transferred will remain unchanged. The new company will be a Joint Venture between AASL and SriLankan Airlines. Whether equity contribution by loss making SriLankan Airlines will be by way of transfer of equipment or include capital infusion is not known.
In a separate development, it is reliably learnt, a delegation from the largest handling agent at Dubai International Airport, DNATA, had visited Colombo last week for discussions with AASL.
With the advent of deregulation in the 1990s, most countries privatized their national carriers and opened up ground handling, engineering and catering operations to private companies. Privatized airlines too were permitted to have their own handling arms thus competing with private handling companies. The resulting competition ensures service levels far superior to those provided by national carriers in a monopolistic environment. In a few countries especially in South Asia, national carriers remained state owned and retained a monopoly in these fields especially ground handling, which is a cash cow.
