KUALA LUMPUR: AirAsia has made a strong pitch to the Sri Lankan government to set up operations in Colombo.

AirAsia pledged substantial returns at no cost to the Sri Lankan government, Sri Lanka’s Sunday Times reported. It is even willing to build a terminal for its operations.

In return for its investment, AirAsia Sri Lanka will have a Sri Lankan air operator’s certificate and exercise unused bilateral rights out of the country.

The Sunday Times said the government was seriously considering the prospect of attracting more tourists and running a budget carrier at zero government investment.

However, the report said, Public Enterprise Development Minister Kabir Hashim, who is in charge of SriLankan Airlines, is unhappy that AirAsia bypassed him and went straight to the cabinet.

The report said a team from AirAsia, including Dilhan Haradasa, who is AirAsia’s group head of network and regulatory affairs, made an hour-long presentation to the Cabinet Committee on Economic Management (CCEM) on Wednesday. The meeting was headed by Prime Minister Ranil Wickremesinghe.

An attendee told The Sunday Times the pitch by AirAsia was “impressive”.

“Everything will be privately funded. They will bring in five aircraft in the first year, and 25 in five years. There will be two in Jaffna and two in Mattala.

“They said they will bring in tourists to meet the government’s five million target and they showed glowing statistics of other places they operate in. Each tourist they flew in now had a daily spend of US$160. They promised to raise it to US$200 in two years,” the source was quoted as saying.

In the presentation, AirAsia pledged low ticket prices, thereby making foreign travel accessible to middle class Sri Lankans.

When Civil Aviation Minister Nimal Siripala de Silva said the Bandaranaike International Airport had no terminal space to support the number of aircraft AirAsia hoped to bring in, AirAsia said it had different terminal requirements and that it was willing to help build a terminal.

“The airline said it had the expertise and template to put up prefabricated structures within a few months,” another source told The Sunday Times.

There are reports that AirAsia has already started head-hunting SriLankan Airlines staff in a recruitment drive in preparation for a possible entry into the local market.

An industry official was quoted as saying: “They have the capital, the aircraft and the expertise. This will increase arrivals, foreign investment and allow Sri Lankans to travel, while posing a massive threat to SriLankan Airlines. They will compete directly on many routes.”

Minister Hashim, meanwhile, told the Sunday Times he had not known that AirAsia would make such a pitch and that he had not been sent any background information. “Before going to the CCEM, they should have spoken to me. This has implications for SriLankan and it is worrying me.”

He added: “I will probably take it up at the next meeting but I don’t even have a piece of paper to go on. They should have sent it to the line minister or ministry and I would have asked SriLankan (Airlines) for a note on the implications. I can’t object without a piece of paper.”

He said he was not opposing the AirAsia initiative but that it must be preceded by an evaluation, done jointly with SriLankan Airlines, according to the report.

The Sunday Times noted that the AirAsia proposal came amid the ongoing liquidation of Mihin Lanka, a low-fare leisure airline based in Colombo run by the government, and a cabinet decision to absorb its towering debts.

Its permit is also to be sold, the report added.

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