World War II

During World War II the British Royal Air Force built an airfield on 145 ha (359 acres) of land in Palaly near Kankesanthurai in northern Ceylon. The airfield's runway was around 2,000 m (6,562 ft) long. A number of RAF squadrons (160, 203, 292, 354) and air-sea rescue units were stationed at the airfield during and immediately after the war. The airfield was abandoned after the war and taken over by the Department of Civil Aviation.

Post-WWII

The inaugural flight by Air Ceylon on 10 December 1947 was from Ratmalana Airport to Madras via Palaly. After independence the airport provided domestic flights to Colombo (Ratmalana) and Trincomalee, and international flights to south India (Madras and Tiruchirappalli). Locals used the airport when visiting south India for cultural, educational and religious reasons while local politicians and officials used the airport for travelling to Colombo. Each year government employees would request three railway warrants for journeys between Kankesanthurai and Galle, the longest and costliest rail journey possible, and exchange these for air tickets between Palaly and Ratmalana. Air Ceylon's Douglas DC-3, Avro HS-748 and Nord 262 planes operated out of the airport. The growth of Tamil militancy put an end to civilian flights at the airport.

Sri Lankan civil war

A Sri Lanka Air Force (SLAF) detachment moved onto the site around 1976. The site became an Air Field Unit in January 1982. The airport served as major facility for the Sri Lankan military during the civil war. The army forcibly seized 261 ha (646 acres) of neighbouring land in 1985. Following the signing of the Indo-Sri Lanka Accord in July 1987 the Indian Peace Keeping Force (IPKF) used Palaly to transport troops between India and Sri Lanka. On 5 October 1987 around a dozen members of the rebel Liberation Tigers of Tamil Eelam (LTTE), whom the Sri Lankan military were going to fly to Colombo to face criminal charges related to killing rival Tamil militants, committed suicide on the tarmac at Palaly airport by consuming cyanide capsules. Among the dead were two senior LTTE commanders - Kumarappa (Jaffna commander) and Pulendran (Trincomalee commander). In 1989, as the IPKF were preparing to withdraw from Sri Lanka, paramilitaries belonging to Indian backed groups such as the Eelam People's Revolutionary Liberation Front escaped to Colombo via Palaly airport. They were each charged Rs. 5,000 by the SLAF - a standard return flight cost only Rs. 3,000 at that time.

During the early 1990s the airport and surrounding areas were declared a High Security Zone and all the residents were expelled. Between 1990 and 1995 this High Security Zone was the only government controlled territory on the Valikamam region. After the Valikamam was recaptured by the Sri Lankan military in 1995 the airport served as a vital link to the rest of the country as the land route was controlled by the LTTE. The SLAF then started a regular service between Palaly and Colombo. The SLAF's Helitours arm provided civilian flights using aircraft and crew leased from the former Soviet Union.

Lionair started operating flights for civilians between Palaly and Ratmalana in August 1996, taking over from the SLAF, and doubled fares. Lionair had a profitable monopoly until March 1998 when Monara Airlines started flights on the same route. Monara suspended its services on 16 September 1998 after receiving threats from the LTTE for carrying military personnel. On 29 September 1998 Lionair Flight 602 left the airport around 1.48pm bound for Ratmalana Airport. At 2.10 pm it was reported missing. Locals reported seeing the plane plunge into the sea near Iranaitivu, 15 km (9 mi) north of Mannar. All 55 on board were killed. The LTTE was accused of shooting down the flight. Lionair suspended flights to Palaly immediately.

Following the Norwegian facilitated ceasefire, civilian flights resumed from Palaly in June 2002 when ExpoAir started operating flights between Palaly and Ratmalana. The flights became very popular and at its peak ExpoAir was operating four flights a day using two 52-seater Fokker F27-500 planes.

Post-civil war

ExpoAir suspended services in 2010 due to a drop in demand but services resumed again in January 2012. The airline operated two return flights a day using a 12-seater Cessna Grand Caravan. A new passenger terminal was opened on 4 January 2013.

In 2014 Tamil National Alliance (TNA) MP Mavai Senathirajah, who is from nearby Maviddapuram, appealed to the Indian consul in Jaffna to upgrade Palaly Airport. The appeal was forwarded to the Government of India, and after approval by the Prime Minister of India, negotiations began with the Government of Sri Lanka (GoSL). In late 2015 GoSL gave approval for an agreement between the two countries to upgrade the airport. The agreement met with resistance from civil servants in Colombo who feared that any development of the north would be at the expense of the south. Some Tamil politicians also opposed the plans, claiming that any development of the airport would result in further acquisition of civilian land.