"We are in discussions to raise fares, but we are worried about the situation in the market. We are concerned that by raising fares we may lose the market altogether," Shakthi Vikram, CEO of Aero Lanka told LBO on Wednesday.

Fuel costs are up US$200 on a single trip to Jaffna to US$1450 from a month ago. Local operators have already cut flights from twice daily to once a day.

But domestic operator Aero Lanka says now may not be the time to slap on a fuel surcharge, given current market conditions.

An outbreak of violence between Tamil Tiger rebels and the Sri Lankan government over the past few weeks is taking its toll on internal travel to the North of the country.

Sri Lanka has two domestic operators – Aero Lanka and Expo Aviation that fly to Jaffna in the North.

Passenger loads to Jaffna have dropped 15-20 percent over the past few weeks, with people only travelling for urgent reasons like funerals.

“Earlier we had requests for flights, but now people travel only if it is essential such as for funerals or illnesses. Whenever anyone can postpone a flight, they do," Vikram said.

There are about two or three cancellations of flights a day, with others who make reservations not showing up for the trip.

A 48-seat aircraft needs at least 41 passengers to break even, Vikram said. The airline carries about 38 passengers on a good day.

"We try to cancel the evening flight. Return journeys from Jaffna however are usually full,” Vikram said.

-Zainab Ibrahim-