Etihad to end flights to Sri Lanka as war hits tourism

COLOMBO, July 20 (Reuters) Abu Dhabi's Etihad Airways says it will stop flights to Sri Lanka in September as tourist traffic falls sharply amid increased violence in the island's two-decade civil war.

The airline will redeploy its aircraft to new destinations, but offer cutomers flights to Colombo through Sri Lanka's national flag carrier Sri Lankan Airlines. Its own flights to the Sri Lankan capital will cease on September 9.

''Etihad continually monitors the commercial performance of its global flight network and has taken this decision following extensive market analysis,'' Geert W Bovene, executive vice president sales and services for the carrier, said in a statement issued overnight.

Tourist arrivals in the indian ocean island fell 30 per cent in June from a year earlier, amid fresh fighting between the state and Tamil Tiger rebels in a civil war that has killed nearly 70,000 people since 1983.

Arrivals fell by 24 per cent in the first half of 2007 compared to tge same period last year.

Tourist arrivals in May fell 40 per cent from a year earlier and many hotels struggling with low occupancy are discounting rooms in a bid to lure clients.

Aviation authorities resumed night operations at Colombo's international airport from July 1 after seven weeks of closure following air raids by Tamil Tiger rebels, including an attack on an adjacent airbase.

Foreign embassies have advised nationals to avoid north and east Sri Lanka after fighting killed an estimated 4,500 people since last year alone.

According to Central Bank data, earnings from tourism fell by 14.8 per cent between January and April to 130.8 million dollar, compared with the same period a year earlier.

The rebels, fighting for a separate state in the north and east of the teardrop-shaped Indian Ocean island, said last week they aim to cripple the island's economy with attacks on major military and economic targets.

REUTERS AM SSC1313