India-Pakistan tensions could raise costs for SriLankan Airlines, threaten Colombo Port’s transshipment revenue- Asha Securities Research
The escalating military tensions between India and Pakistan are casting a shadow over Sri Lanka’s aviation and maritime sectors, with SriLankan Airlines facing higher operational costs and the Port of Colombo risking lost transshipment revenue, according to an analysis by Asha Securities Research.
SriLankan Airlines could see rising fuel expenses, as Europe-bound flights detour around closed Pakistani airspace, compounding operational challenges. The conflict also threatens tourism recovery, with India contributing roughly 20 percent of Sri Lanka’s tourist arrivals. A decline in Indian travellers, driven by safety concerns or travel disruptions, may slow the sector’s rebound in 2025.
India has reportedly urged the transshipment hubs, including Colombo, Dubai and Singapore, to halt re-exporting Indian goods to Pakistan. Compliance could cost Colombo a portion of its lucrative transshipment business, though maritime routes remain open and the port lies outside the immediate conflict zone. Sri Lanka’s trade ties with India (US $ 782 million in exports and US $ 3.5 billion in imports in 2024) could leave it vulnerable to broader regional trade disruptions.
Asha Securities noted that near-term trade flow disruptions are unlikely but prolonged hostilities may exacerbate pressures on Sri Lanka’s tourism and logistics sectors.
“Colombo’s role as a transshipment hub hinges on geopolitical stability,” the report warned, highlighting the delicate balance Sri Lanka must strike amid the rising regional uncertainty.
