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    Sri Lankas domestic air travel market has seen a resurgence since the dawn of peace to the

    island nation in 2009. There are a number of airlines presently operating domestic flights within

    Sri Lanka offering scheduled service as well as charter flights.

    Main domestic airlines of Sri Lanka

    SriLankan AirTaxi Helitours ExpoAir Deccan Aviation Air Senok Cosmos Aviation Daya Airlines

    Main domestic airports of Sri Lanka

    Colombo City, Ratmalana Airport (RML) Jaffna Airport (JAF) Colombo Peliyagoda Waterdrome Nuwara Eliya (NUA) Koggala (KCT) Bentota (BJT) Kandy (KDZ) Dambulla (DBU) Batticaloa (BTC) Trincomalee, China Bay Airport (TRR)

    SriLankan Airlines Limited (previously known as Air Lanka) is theflag carrierofSri Lanka.It operates to destinations in Asia and Europe from its base and hub atBandaranaike

    International Airportin the Sri Lankan capital,Colombo. The airline's head office is in the

    Airline Centre, on the grounds of Bandaranaike International Airport inKatunayake, Sri Lanka.

    Within the last two decades Sri Lankas tourism industry has grown dramatically as one of the

    main foreign exchange earners and employment provider. Since Sri Lanka depends

    enormously on tourism for its growth and development, this paper provides an analysis of

    marketing efforts within the tourism industry in Sri Lanka for foreign tourists.

    Sri Lanka has attracted visitors from abroad for many centuries. They came to Sri Lanka for

    various different reasons. Printed literature on Tourism, by word of mouth and other
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    communication channels developed a perception of Sri Lanka as a Paradise Island"

    (Selvanathan S. 2007). Although, tourism in Sri Lanka was addressed under different themes

    namely- political stability, war, child sex and so on, aspects of marketing is loosely concerned

    in the prevailing literature.

    As a tropical country, Sri Lanka has a variety of climatic zones, ranging from arid dry zone

    conditions to lush, mountainous regions adding to its other attractions (Ranaraja S. 2003).

    Sri Lankas wealth of natural attractions, featuring outstanding landscapes, distinctive system

    and high levels of biodiversity, business environment connected with friendly host

    community offers the potential to market the country as a distinctive international tourism

    destination. Tourism is a very fragmented industry and marketing a destination requires

    strong partnerships and a coordinated marketing effort among a wide and varied range of

    sectors, which includes accommodation, transportation and visitor attractions. Sri Lankan

    destination marketers have to work increasingly hard to create or maintain a share of the

    tourism market with the fierce competition of other countries. Among developing country

    experience, Sri Lanka's dependence on tourism has increased dramatically. Tourism became

    a major economic activity in Sri Lanka after 1977. Sri Lanka generates substantial revenues

    from the international tourism industry. Like any other economic activity, international

    tourism must be managed in accordance with sound marketing efforts in order to make it as

    productive as possible. Hence, marketing efforts including product, price, promotion,

    distribution, people, market segmentation, destination image building, destination branding

    and destination positioning are essential for success with the increasing competition from the

    rest of world.

    In Sri Lanka, the tourism industry is a foundation of the nations economy, its fourth largest

    source of foreign exchange (2006: revenues US $ 450 million, arrivals 559,603) and a major

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    Questions of the research will be:

    1. What are the factors affecting destination competitiveness of Sri Lanka?

    2. How internal analysis, competitiveness analysis and customer analysis can link to

    destination image creation, brand building, destination positioning and destination

    marketing strategies?

    3. Has Sri Lanka destination brand developed properly?

    4. What is the tourists image on Sri Lanka?

    5. Has Sri Lanka positioned in the international tourists market properly?

    6. What are the market segments that exist for Sri Lanka?

    7. How should Sri Lanka develop its destination marketing mix?

    Economic benefits of air services liberalization

    The economic impact of the aviation sector, in general, is strong and pervasive. It contributes

    about US$700 billion to the global tourism industry and to the logistics industry. The industryalso has a catalytic economic impact as improved aviation connectivity can contribute to higher

    national productivity by enhancing access to markets, enhancing communications and

    interactions between and within firms, and Air services liberalization in South Asia Regional

    Economic Integration Challenges for South Asia during turbulent times 105 providing access to

    a larger labour/talent pool (Tretheway 2010). In a panel regression study covering 48 countries

    over nine years, Tretheway (2010) finds that a 10 percent increase in aviation connectivity

    per US$1 billion of gross domestic product (GDP) increases labour productivity by 0.07 percent.

    Recent history has shown that the economic benefits of liberalized

    regional air services agreements are substantial and compelling. It is

    no coincidence that the most developed economic regions in the world

    enjoy liberal air services markets. Nations have long since recognized

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    that BASAs stifl e regional progress, and steadily push for those agreements to be replaced by

    liberal multilateral agreements. The US was the

    first to initiate liberalization of air travel, closely followed by the European Union (EU). In 1997,

    the Association of Southeast Asian Nations

    (ASEAN), inspired by successes in the US and the EU, took significant

    steps to liberalize regional air travel (Tham 2008).

    It may be argued that the rapid worldwide growth in air traffi c

    over the last few decades is due to the removal of air services restrictions within economic

    regions. Accelerated development of air services

    (through the removal of restrictions) was prompted by the growing

    development in global and regional production networks and the advent of Just-in-Time (JIT)logistics (Tham 2008). These networks and

    processes required strong support services, such as air travel. Further,

    the growth in tourism and trade in newly industrialized and emerging

    markets necessitated speedy civil transport services. Regarding the different benefi ts that

    relaxation of air services regulations could bring to

    South Asia, three key areas are identifi ed and discussed below.

    2.1 Creation of aviation industry jobs

    As stated previously, liberalization of air services stimulates growth,

    which subsequently creates more jobs in the industry. This, in turn, will

    have a catalytic effect on the economy as a whole (discussed later). The

    expansionary effect of liberalization (of air services) is best illustrated

    through a graphical presentation by Button and Drexler (adapted by

    Grancay 2009). In his illustration, Grancay compares the effects of liberalization on supply and

    demand within the air services market, both at

    present, and in the future.

    According to Balaz and Williams (2006), within the EU, the overall

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    number of employees in civil aviation increased from 435,000 to 489,700

    after liberalization in the period 1988 to 1996. Liberalization, which creates increased air

    services, results in the creation of new airlines, branch

    offi ces and airports. The new jobs created necessarily include fl ight 106

    crews, administrative staff and ground handling staff. For example,

    the easing of the restrictive Bermuda II agreement between the United

    Kingdom (UK) and the US resulted in the creation of just over 25,000

    jobs in the US and the UK by 2004 (InterVISTAS 2006 cited in Grancay


    In the long-term, liberalization will have a catalytic effect (discussed

    below), creating more trade and jobs, which results in economies of

    scale. These economies of scale will create a new price at the predicted

    equilibrium point. This phenomenon can also be illustrated as a chain

    as presented in Figure 6.1.

    Figure 6.1: Impact chain of aviation liberalization

    Source: InterVISTAS (2006) cited in Grancay (2009).

    2.2 Trade and economic growth

    Removal of air services restrictions opens up new destinations and creates more frequencies and

    better fl ight connections, which result in new

    markets for international businesses (Grancay 2009). Piermartini and

    Rousova (2008) have found that trade development is positively correlated with increase in

    international air passenger transport. They state

    that passenger transport is important for trade because travel is necessary to set up and maintain

    long distance business relationships. Relaxation of restrictions and falling costs encourage travel,

    which expedite

    business negotiations and stimulates investment and commercial transactions in the long run.

    Ease of travel also encourages greater peopleto-people connectivity, which has indirect

    implications for stimulating

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    regional cooperation and commerce. All these factors are of particular

    signifi cance in the SAARC region.

    Additionally, more comprehensive and cost-effi cient air connectivity complements and catalyses

    global and regional value chain development. Global value chains have transformed internationalproduction

    fragmentation worldwide, and fi rms are increasingly adopting new

    strategies of vertical integration and vertical specialization. Better air

    services connectivity intra-regionally, as well as between this region

    and others, would help South Asian fi rms better integrate into global

    production networks.








    New and

    better air


    Air services liberalization in South Asia Regional Economic Integration

    Challenges for South Asia during turbulent times


    Also, large multinational corporations treat proximity to airports as

    an important criterion in deciding where to invest (Grancay 2009). They

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    also consider flight routes and fl ight costs to and from a particular territory before making their

    investment decisions. Hence, by increasing

    flight frequencies and giving consumers greater choice in fl ight routes

    and travel packages, liberalization of air travel will encourage multinational fi rms to invest inthe region.

    However, the benefi ts should not only be looked at from an investment point of view. Air

    transport also enables businesses achieve higher

    effi ciency through exploiting economies of scale (Grancay 2009). Developments in air travel

    help strengthen destination networks, which in

    turn facilitate JIT processes, resulting in diminished warehousing costs.

    Further, ease of travel allows for freer transfer of human resource across

    the region and provides companies access to the best human resource.

    Finally, liberalization of air services paves way for changes in market structures (Grancay 2009).

    Producers and buyers get access to foreign markets; transport becomes more cost-effi cient and


    processing is minimized, thus changing market dynamics and increasing competition.



    Main article:SriLankan Airlines destinations

    As of September 2012, SriLankan Airlines serves 58 destinations in 33 countries,[5]and remainsthe largest foreign carrier into the Maldives, with at least 38 weekly flights between Male andColombo. The airline is also consideringGanas a destination within two months.[20]

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    SriLankan Airlines Airbus A340-300 landing atLondon Heathrow Airport

    Aircraft in ramp area of Bandaranaike International Airport

    An Airbus A330-200taxiinginKuala Lumpur International Airport
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    The second Airbus A340-300 of the airline.

    Aircraft acquisition plan for 20112015

    SriLankan Airlines aims to boost its fleet to 30 aircraft over the next four years, and is currentlyin talks with both Airbus and Boeing regarding a deal that may consist of up to nine long-haulaircraft.[27]It has also leased four additional Airbus A320 aircraft.[28]Kapila Chandrasena saidthe carrier wants to add theAirbus A330-300and theBoeing 777models to its fleet to replace itsAirbus A340-300s, with deliveries beginning in 20132014.[29]All of the current aircraft are tobe renovated to suit to the needs of the modern times. Expects to place an order by the end of2012 between Airbus and Boeing.According to the Minister, the government plans to increasethe airline's fleet to 30 aircraft and will purchase five new aircraft within the next six months.

    Sri Lankan AirTaxi

    Main article:Sri Lankan AirTaxi

    Sri Lankan Airlines began domesticair taxiservice using two Canadian-builtDHC-6-100aircraft to increase tourism in the southern and central cities of Sri Lanka. It currently flies toAmpara,Bentota, Castlereagh,Dikwella,Hambantota,Kandy, Koggala,Nuwara Eliya,Tissamaharama, andTrincomalee, all from Colombo.[34]With the increasing number ofpassengers, more aircraft are expected to join the fleet for the air taxi service[citation needed].


    The initial livery consisted of red stripes on a white fuselage, the tail being a solid red andsporting the corporate logo, a stylisedpeacock. This was the sole livery of the airline for nearlytwo decades, from 1979 to 1998. After SriLankan Airlines began a decade-long partnership withEmirates, the livery was change into a much simpler one, with an all-white fuselage, covered byblue 'SriLankan' titles, and the tail adorned with the corporate logo. Some aircraft have touristadvertisement's on the rear part.


    The Business Class seats come in either cream or dark blue, depending on the aircraft. TheEconomy seats are light blue in color. SriLankan provides an individual video player with 18movies and 22 radio channels for Economy Class. Business Class customers receive this andover 30 movie titles in a variety of languages. Both classes are given the option of a "Satcom"satellite phone. Satcom allows a passenger to call anyone in another seat free of charge.SriLankan is capable of preparing meals for those with dietary restrictions, and Business Classpassengers can pre-order any of the special meals available. On some flights, like Singapore to
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    Colombo, SriLankan prepares hot meals (such as chicken and rice or seafood with vegetables)for Economy Class, as the flight is long. From 2011, full flatbed seats will be offered in BusinessClass, on selected Airbus A330 aircraft.[

    citation needed]


    New movies fromHollywood, old classics, and some films from India are available. Included arecomedies, dramas, arts, sports, and children's TV.

    CTV is SriLankan's channel for children with programmes such as comedies and cartoons.SriLankan has 22 radio channels to provide music from around the world. SriLankan's radiochannels cover the European charts, Golden Era, classical, jazz, and popular music selectionsfrom Sri Lanka,Arabia, India, and Japan. New games have been added, including puzzles,playing cards, and classic board games.[35]In 2011, SriLankan will install AVOD systems,provided by IMS of the United States, on selected Airbus A330 and A340 aircraft.[

    citation needed]

    SriLankan catering

    SriLankan Catering, although a 100%-owned subsidiary of SriLankan Airlines, is a standaloneoperation responsible for its own economic infrastructure, management and profitability. Underthe guidance of its chief executive officer, the companys prime responsibility is the preparation

    of in-flight meals for SriLankan Airlines. It also caters for foreign airlines, among which areQatar Airways,Cathay Pacific,Singapore AirlinesandEmirates. SriLankan Catering recentlyopened a laundry facility and took over the management of the Serenediva Transit Hotel, atColombo's Bandaranaike International Airport.[

    citation needed]

    Frequent flyer programmeSriLankan's firstfrequent-flyer programmewas called Serendib Miles and was abandoned inearly 2000. It then became a partner of Emirates'Skywardsfrequent-flyer program. However,this agreement ceased to exist when the partnership between the two airlines concluded on 31March 2008.[36]SriLankan subsequently launchedFlySmiLes, which has since added a variety ofnew reward partners to its program.



    Embraer S.A. is aBrazilianaerospaceconglomeratethat produces commercial, military, andexecutive aircraft[5]and provides aeronautical services.[6][7],%20the%20free%20encyclopedia.htmhttp://e/SriLankan%20Airlines%20-%20Wikipedia,%20the%20free%20encyclopedia.htmhttp://e/SriLankan%20Airlines%20-%20Wikipedia,%20the%20free%20encyclopedia.htm,%20the%20free%20encyclopedia.htm
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    Headquartered inSo Jos dos Campos,[8]Embraer is the third-largest commercial aircraftmanufacturer in the world.[9]

    Embraer is a member of theAir Transport Action Group(ATAG). Its CEO, Frederico Curado, isthe 2012 recipient of theTony Jannus Award, given annually for distinguished contributions to

    commercial aviation.


    Embraer 190

    Seeking a domestic aircraft manufacturer, the Brazilian government made several investments inthis area during the 1940s[11][12]and '50s,[11]but it was not until 1969 that Empresa Brasileira deAeronutica (Embraer) was created as agovernment-owned corporation.[7]

    The company's first product was aturboproptransport, theEmbraer EMB 110 Bandeirante.

    Early growth

    The Brazilian Government contributed to the early growth of Embraer[citation needed] giving itcontracts[7]and helping to increase its product line, and the company sold solely to the domesticmarket until 1975.

    While military aircraft made up the majority of Embraer's products during the 1970s,[citation needed]

    by 1985 aregional airlinerhad debuted, theBrasilia.[13]Aimed at the export market, this planemarked the first of Embraer's highly successful small airliners.[6]

    License-built Pipers

    In 1974 the company started to producePiper Aircraftlight planes under license.[14]Piper firstput togetherknock-down kitsin their US factory for Embraer to assemble & market in Brazil &Latin America,[citation needed] but by 1978 most of the parts and components were being sourcedlocally.[14]Between 1974 and 2000 nearly 2500 license-built Pipers were produced byEmbraer.[14]
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    Born from a Brazilian government plan and having been state-run from the beginning,[11]Embraer began aprivatizationprocess[citation needed] alongside many other state-controlledcompanies during the government ofFernando Henrique Cardoso.[15]

    This privatization effort saw Embraer sold on December 7, 1994,[7][16]and helped it avoid alooming bankruptcy.[11]The company continued to win government contracts.[

    citation needed]

    The Brazilian government retains interest through possession ofgolden shares, which allow itveto power.[17]

    Initial public offerings

    In 2000 Embraer made simultaneousinitial public offeringson theNYSEandBM&F Bovespastock exchanges.[6]As of 2008 its NYSE-traded shares wereAmerican Depositary Receipts

    representing 4 BM&F Bovespa shares.[18]

    Current ownership

    As of 2008 ownership was: Bozano Group 11.10%, Previ (a Brazilian pension fund) 16.40%,Sistel 7.40%,Dassault Aviation2.1%,EADS2.1%,Thales2.1%,Safran1.1%,Government ofBrazil0.3%, the remainder being publicly traded.[19]

    Product line expansion: military, regional & executive

    In the mid-1990s the company pursued a product line more focused on small commercial planes

    than the military aircraft that had prior made up the majority of its manufacturing.[11]

    Largerregional airliners with 70-110 seats and smaller business jets soon followed.[6]Today thecompany makes for both defense and commerce.[6][7]

    Military transport

    On April 19, 2007, Embraer announced it was considering the production of a twin-jet militarytransport, theEmbraer KC-390. Work actually began in May 2009 with funding from theBrazilian Air Force.[20]Correios, the Brazilian postal service, has shown interest in buying thisaircraft, in lieu of using commercial freight service for mail transport.[21][22]Using many of thetechnologies developed for theEmbraer 190, the C-390 would carry up to 23 tons of cargo[23]

    and was aimed at replacingCold War-era cargo aircraft.[24]

    While firm orders for this yet-to-be-produced hauler do not exist,[20]Argentina has asked for sixexamples and several South American nations have also expressed interest .[25][26]

    Government subsidy controversy

    Main article:Bombardier Aerospace and Embraer S.A. government subsidy controversy
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    Brazil and Canada engaged in an international, adjudicated trade dispute over government subsidies to

    domestic plane-makers in the late 1990s and early 2000s. TheWorld Trade Organizationdecided Brazil

    ran an illegal subsidy program, Proex, benefiting its national aviation industry from at least 1999-2000,

    and that Canada illegally subsidized its indigenous regional airliner industry, comprisingBombardier


    Production bases and facilities

    The company's headquarters and a production base are inSo Jos dos Campos,So Paulo,Brazil. It also has production bases in the State ofSo PauloatBotucatu, Eugnio de Melo (adistrict of So Jos dos Campos) andGavio Peixoto.[27][dead link] It may have other productionbases as well. The company has offices in Beijing,[28][dead link]Fort Lauderdale(US),[29][dead link]Paris,[30][dead link]Singapore,[31][dead link] andWashington DC(US).[29][dead link]

    Non-Brazilian main facilities

    Embraer Portugal/Europe (vora, Portugal).Subsidiaries

    EAMS - Embraer Aircraft Maintenance Services Inc. (Nashville, Tennessee USA) - maintenanceservices site.

    OGMA- Indstria Aeronutica de Portugal (Alverca do Ribatejo, Portugal) - aircraft componentmaintenance, repair and manufacturing, plus aircraft maintenance services.

    Embraer Aircraft Holding, Inc. - Its US headquarters are nearFort Lauderdale, Floridain a facilityfounded in 1979. Its external relations office is inWashington, DC.[32]

    Joint ventures

    Harbin Embraer (Harbin, China) - manufactures aircraft from theERJ familyfor theChinesemarket.

    Aircraft types,_Tennessee,_Tennessee,_Tennessee,_Florida,_Florida,_Florida,_DC,_DC,_DC,_Florida,_Tennessee
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    Lufthansa CityLineEmbraer 195LR

    Embraer EMB 110 Bandeirante Embraer EMB 120 Brasilia Embraer/FMA CBA 123 Vector Embraer ERJ 135(37 passengers) Embraer ERJ 140(44 passengers) Embraer ERJ 145(50 passengers) Embraer 170(80 passengers) Embraer 175(88 passengers) Embraer 190(110 passengers) Embraer 195(122 passengers)


    EMB-145 AEW&C ofHellenic Air Force
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    Embraer EMB 111 Bandeirulha, a special version designed for maritime patrol, used by theBrazilian Air Force

    Embraer EMB 312 Tucano Embraer EMB 314 Super Tucano AMX International AMX Embraer R-99 Embraer 145 AEW&C Embraer 145 RS/AGS Embraer P-99 Embraer KC-390


    Legacy 600

    Embraer Phenom 100

    Embraer Phenom 300 Embraer Legacy 450 Embraer Legacy 500 Embraer Legacy 600 Embraer Legacy 650 Embraer Lineage 1000


    Embraer IpanemaExperimental

    Embraer MFT-LF
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    In October 2010, Embraer suggested plans to develop very-long-range business jets, entering asector currently dominated byGulfstream,Bombardier, andDassault.[33]In May 2011, Embraerannounced that it was considering building a larger airliner than the E-jets, with five-abreast


    Licensed-version aircraft


    Embraer XavanteGeneral aviation

    Embraer Sneca Embraer Corisco Embraer Carioca Embraer Minuano Embraer Navajo Embraer Sertanejo Embraer Tupi

    Commercial aircraft deliveries

    Year 19961997199819992000200120022003200420052006200720082009 2010 2011




    4 32 60 96 160 161 131 101 148 141 130 169 204 244 246[35]204[36]

    The numbers include military versions of commercial aircraft.

    Total delivered-backlog-options as of June 30, 2007: 862-53-131 145 Family, 256-399-719170/190 Family



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