A government-owned low-cost carrier is being prepared for launch in Sri Lanka in line with efforts to create more home-based competition.
SriLankan Airlines is now the only locally based airline to operate international passenger services from Colombo, but late in December the country's Cabinet approved the establishment of the new airline, which is to be known as Mihin Air.
The government says Mihin will "provide affordable services to less affluent travellers, people leaving for overseas employment, particularly in the Middle East and Asian countries, and promote regional tourism".
It says the initial capital contribution is estimated at around Rp500 million ($4.6 million) while the total project cost is estimated at Rp1.5 billion.
The government also says the new airline, which will operate aircraft in single-class configuration, could be an employment tool for Sri Lanka Air Force pilots when they retire.
Plans for Mihin Air have been revealed as the Sri Lankan government is negotiating a possible management contract extension with Emirates for national carrier SriLankan Airlines. SriLankan is more than 40%-owned by Emirates, but the government retains a majority shareholding. The management contract was awarded to Emirates when it bought into the airline in 1998 but it expires next year.
Other privately owned airlines are also hoping to launch international services from Colombo, among them Holiday Air and Deccan Lanka. Holiday Air hopes to launch services in the coming months and says it has close ties to Malaysian low-cost carrier AirAsia. Deccan Lanka is backed in large part by India's Air Deccan, although its launch plans have been deferred, partly because of political troubles in Sri Lanka.
Mihin "will provide affordable services to less-affluent travellers"
Source: Airline Business