Skip to content
Search

Latest Stories

Sri Lanka offers tax cuts to revive its airport

SRI LANKA'S new government Friday (28) offered tax breaks and subsidised fuel to revive the island's second international airport built with Chinese loans but which ended up a white elephant.

Authorities announced plans to suspend the $60 departure tax for two years and allow airlines free landing and parking after scheduled carriers abandoned Mattala Rajapaksa airport.


Ground handling services will also be offered at discounted rates while migrant workers flying out of the airport 250 kilometres (150 miles) from Colombo will be offered concessionary fares.

Budget carrier Flydubai was the last scheduled operator to pull out of the airport, which is named after former president Mahinda Rajapaksa.

The previous administration, which lost the November presidential election to Rajapaksa's younger brother Gotabaya, had been in talks with neighbouring India to revive the airport as an aircraft maintenance facility.

It was not immediately clear if the new government had abandoned those plans but the country's cabinet said in a statement they wanted scheduled passenger services to resume.

The airport a five-hour drive from the capital is in the middle of a migratory route for birds.

Several aircraft have hit birds since it opened in 2013, and four years ago the military deployed hundreds of troops to clear deer, wild buffalo and elephants off the sprawling facility.

The airport, which cost an initial $210 million and employs about 550 workers in Rajapaksa's home district, has failed to generate enough business to pay staff, let alone make a profit.

The first foreign airline to operate out of the facility was Air Arabia in 2013 but they pulled out after six weeks of scheduled services. Flydubai quit in June 2018 without giving a reason, but officials said poor passenger traffic may have spurred the budget carrier to leave.

Even Sri Lanka's national carrier, Sri Lankan Airlines, stopped flying to Mattala in 2015 soon after Rajapaksa was defeated in the January 2015 elections. Sri Lankan later said they saved $18m annually by not flying to the airport.

But the facility has remained an emergency alternate landing location for flights heading into Colombo International, about 30 minutes away by air.

In 2017, China took over a loss-making deep-sea port at Hambantota, in the same area as the airport, on a 99-year lease under a $1.1m deal, sparking concern in neighbouring India.

(AFP)

More For You

ArcelorMittal

The agreement is designed to help ArcelorMittal strengthen the long-term competitiveness of its French steel production

iStock

ArcelorMittal, EDF seal 18-year nuclear power supply deal in France

Highlights

  • EDF to allocate part of its nuclear fleet capacity to ArcelorMittal for 18 years.
  • First electricity deliveries began on 1 January 2026.
  • Deal supports low-carbon steel production, competitiveness and energy sovereignty.
ArcelorMittal and EDF have signed a Nuclear Power Production Allocation Contract (CAPN) to secure a long-term supply of low-carbon electricity for ArcelorMittal’s sites in France.
The agreement was signed on 26 December 2025 and represents a significant step in the steelmaker’s energy strategy in the country.

Under the contract, EDF will allocate a share of the capacity of its operating nuclear fleet to ArcelorMittal for a period of 18 years.

The arrangement follows a letter of intent signed by the two companies in January 2024 and aims to provide stable, competitive and low-carbon electricity to support industrial operations.

Keep ReadingShow less