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Tuesday February 27th, 2024

Sri Lanka airline eyeing flights to Korea, China, Australia, Maldives from August

ECONOMYNEXT – SriLankan Airlines is planning to fly to Korea, China, and Australia if the airport is re-opened for passengers from August as planned in the COVID-era, amid ongoing efforts to boost cargo and slash costs to survive, officials said.

SriLankan is planning to re-open the airport for tourists without mandatory quarantine but multiple PCR tests from August 01 with a revamped route network.

SriLankan used to operate 140 flights a week to India before the Coronavirus crisis hit, bringing about 30-40 percent of revenues, but the country still remains closed with cases still going up. SriLankan was also planning to re-start flights to Frankfurt and Sydney at the time.

Coronavirus Network

“We plan to resume flights from August 01, but we may not go back to the same destinations,” SriLankan Chairman Ashok Pathirage said.

“Our idea is to fly to destinations like China, which is much safer and we are also looking at new destinations like Korea, Seoul.”

Korea has Sri Lankan expatriate workers but it would be a ‘fantastic’ market for tourists, Pathirage said.

After a massive strike in 1987 (The Great Workers Struggle) in the wake of high inflation and currency deprecation which also brought reforms to Korea’s central bank, Korea turned into a Western-style liberal democracy and is now an OECD country.

SriLankan is also planning to start flights into Sydney, in addition to Melbourne which it was already flying to.

The Maldives which is expected to re-open for tourists in July is another destination SriLankan is looking at.

SriLankan has played the role of a surrogate carrier to the Indian Ocean tourist paradise in the past, routing flights through Male, the capital, or transiting through Colombo.

“We are impatiently waiting (for the airport to re-open),” Pathirage said. “Our job is flying and our staff is very keen”.

SriLankan is already operating cargo flights to Seoul and over 20 other destinations.

But passengers could also be carried where airports are permitting, Chief Executive Vipula Gunatilleke said.

Korea has contained the spread of Coronavirus to a great extent, but not to the same extent as Sri Lanka or Vietnam which completely killed the Wave I arrivals from China through quarantine and visa restrictions.

Vietnam has seen no domestic cases from April 22, with a total of 268 foreigners and domestic cases. All others are from returnees and technical specialists brought back. Domestic flights have resumed in Vietnam and there is no social distancing.

Vietnam Airlines is selling domestic tickets with no travel date to raise cash.

Gunatilleke said SriLankan had also examined the possibility of selling travel vouchers but feedback from travel agents indicated weak demand.

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SriLankan was planning to fly direct to Vietnam shortly before the Coronavirus struck, Gunatilleke said.

SriLankan Airlines is now running mostly with cargo revenues and some flights repatriating stranded Sri Lankans abroad, with revenues falling to 20 million US dollars a month from a pre-Coronavirus 80 million US dollars a month.

Freight Operations

A short-haul Airbus A320 aircraft can carry 4-5 tonnes of cargo and the larger A330 could carry 30 tonnes, he said.

With cabin loading, another 7-8 tonnes could be carried.

Seats had been removed in one older A330 to carry cargo in the cabin.

SriLankan is recovering costs on all-cargo flights, Gunatilleke said.

The airline however is trying to keep charges down as exporters also want as low rates as possible, he said.

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At the moment global freight rates are high due to reduced flights and shipping frequencies, but as the situation normalizes margins will reduce, he said.

If the airport re-opens for passengers as planned in August SriLankan is hoping to push up revenues to 35 to 40 million US dollars by December or about 40 percent of pre-Coronavirus revenues, Pathirage said.

Related

SriLankan Airlines to restructure US$680mn in debt, slashing costs to survive after Covid-19

By March the airline is hoping to go back to about 70 percent of pre-crisis revenues. In the year to March 2020, SriLankan lost about 130 million US dollars.

SriLankan is in talks to re-negotiate over 400 million US dollars in debt to state-run Bank of Ceylon and People’s Bank, and also wants to re-structure 275 million US dollars owed to Ceylon Petroleum Corporation.

The airline is also cutting costs to survive the post-COVID era. (Colombo/June23/2020-sb)

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Sri Lanka parliamentary committee says electricity tariffs should be reduced by 20 pct

ECONOMYNEXT — A parliamentary Sectoral Oversight Committee on Alleviating the Impact of the Economic Crisis has recommended to the Public Utilities Commission of Sri Lanka (PUCSL) that electricity tariffs be reduced by at least 20 percent.

A statement from parliament said on Monday February 26 that, following an analytical review of the figures presented by the Electricity Board, Public Utilities Commission, etc. and taking into consideration all other factors affecting the price of electricity, including considering the opinion given by experts that the existing electricity price can be reduced by about 33%, price of electricity should be reduced by at least 20% in the year 2024 so that the state-run Ceylon Electricity Board (CEB) will not suffer any loss.

PUCSL officials have informed the Committee that by the end of this month, they can submit the necessary recommendations to reduce the electricity bill, according to the statement.

The matter was taken up for discussion when the committee, chaired by MP Gamini Waleboda, met in the Parliament on February 22.

Officials from the Ministry of Industry, Ministry of Finance, Central Bank of Sri Lanka, Public Utilities Commission, Industry Development Board, Enterprise Development Authority, Department of Population and Statistics, Department of Inland Revenue and from government institutions including the Micro, Small and Medium Scale Industries Board and a group of industrialists had also been called for the meeting.

“The Committee gave several directives to the relevant institutions and officials to identify the micro, small and medium scale industries that are directly affected by the economic crisis and to activate the local economy and increase the foreign exchange earnings by reviving the industry sector.

“The Committee pointed out that due to the increase in electricity bills, the number of electricity connection cuts reported across the island has exceeded one million. It was also emphasised that in order to alleviate the pressure on the industry and the society, it should be arranged to provide electricity connections again by charging only 50 percent of the outstanding charges at the initial stage with the concessional basis of payment of outstanding electricity charges on installment basis,” the statement said.

The committee was also of the view to allow the customer to pay the connection fee in installments so as to avoid discouraging new entrepreneurs to start micro, small and financial industries due to high charges for getting fixed electricity connection and instructed to review the new connection fee and work to reduce it as much as possible.

The committee chair has instructed the PUCSL to conduct an audit on the electricity consumption in the public sector as an approach to ensure energy security.

“The Committee recommended to the Ministry of Finance and the Central Bank to start a loan scheme at subsidised interest for the purchase of solar panel systems with a view to promoting solar energy as a source of energy supply to industries. The Ministry of Finance expressed its agreement to provide refinancing facilities subject to a maximum as per the proposal made by the Committee to implement a loan scheme targeting micro, small and medium scale industrialists under subsidized interest rates.

The committee has also recommended that raw materials that must be imported from abroad and impose tax concessions on such raw materials be identified to ensure the supply of raw materials required for the smooth running of micro, small and medium scale industries. Copper, lead, aluminum and other industrial scraps used as raw materials in various domestic industries currently being sold by the CEB to external buyers and other entities should also be issued to micro, small and medium scale industrialists recommended by the Ministry of Industry and the Industrial Development Board, the committee has recommended.

The definition used by the Department of Population and Statistics for micro, small and medium industries and the definition used by other institutions such as the Industrial Development Board and the Central Bank for those industries are different from each other, which is an obstacle in making policy decisions, the committee had noted, directing the Department of Population and Statistics to support to the policymakers by releasing statistical data based on a common definition.

“The committee also recommended that the Credit Information Bureau should take prompt action to remove their credit information from the blacklists so as to facilitate access to credit facilities for micro, small and medium scale industries facing financial crisis to activate their balance sheets and to review all existing laws and procedures for registration of micro, small and medium scale industries as well as to obtain licenses and introduce a simple system.

“The committee informed all the parties to establish a steering Committee headed by the Ministry of Industry to implement the recommendations given by the Committee and to report its progress within a week,” the statement said. (Colombo/Feb27/2024)

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Sri Lanka sets up fund to help children of Gaza

The United Nations Relief and Works Agency for Palestine Refugees in the Near East is mandated to provide education, health, relief and social services, and emergency assistance to refugees. (Pic courtesy UNWRA)

ECONOMYNEXT – Sri Lanka’s cabinet of ministers have approved a proposal by President Ranil Wickremesinghe to set up a fund to help children caught in the war in Gaza, a statement said.

The government will contribute a million US dollars and use funds allocated by state agencies for Ifthar celebrations.

Public contributions are also called.

The Presidential Secretariat is requesting public donations citizens for the “Children of Gaza Fund” to be contributed to account number 7040016 at Bank of Ceylon (7010), Taprobane Branch (747) by 11th April.

Deposit receipts should to be forwarded to 0779730396 via WhatsApp. (Colombo/Feb27/2024)

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Top US official calls for inclusive reforms, deeper defence ties with Sri Lanka

ECONOMYNEXT — United States Deputy Secretary of State for Management and Resources Richard Verma in discussions with Sri Lanka officials had called for inclusive reforms and stronger human rights and also discussed deeper defence and maritime cooperation.

The United States remains committed to the economic growth and prosperity of Sri Lanka, statement from the US Embassy in Colombo quoted the official as telling government, civil society and economic leaders during his February 23-24 visit to Sri Lanka.

“Verma met with President Ranil Wickremesinghe and Foreign Minister Ali Sabry to discuss progress on Sri Lanka’s IMF program, including inclusive economic and governance reforms aimed at keeping Sri Lanka on the path to sustainable economic growth.  Deputy Secretary Verma stressed the vital need to protect human rights and fundamental freedoms, including freedom of expression. They also explored opportunities to deepen defence and maritime cooperation between the United States and Sri Lanka, including strengthening the Sri Lanka Navy’s capabilities to safeguard national security and promote a more stable Indo-Pacific region,” the statement said.

 On February 23, aboard the SLNS Vijayabahu, one of three former U.S. Coast Guard cutters transferred by the United States to Sri Lanka, Deputy Secretary Verma said: “I am pleased to announce that the Department of State has notified Congress of our intent to transfer a fourth medium endurance cutter to Sri Lanka.  The Department obligated $9 million in Foreign Military Financing to support this effort.  We look forward to offering the cutter, pending the completion of Congress’ notification period.  If completed, this transfer would further strengthen defense cooperation between the United States and Sri Lanka.  The ship would increase Sri Lanka’s ability to patrol its Exclusive Economic Zone, monitor its search and rescue area, and provide additional security for ships from all nations that transit the busy sea lanes of the Indian Ocean.” 

 Participating in the announcement at Colombo Port were Sri Lanka State Minister of Defense Premitha Bandara Tennakoon, Commander of the Sri Lanka Navy Vice Admiral Priyantha Perera, and U.S. Ambassador to Sri Lanka Julie Chung, who remarked, according to the statement: “The United States has previously transferred three cutters to the Sri Lankan Navy, which deploys these ships for maritime operations and law enforcement missions, countering human trafficking and drug trafficking, while supporting humanitarian assistance and disaster response efforts. The eventual transfer of a fourth vessel would be just one more point in a long history of cooperation between Sri Lanka and the United States in preserving a free and open Indo-Pacific region.” 

Verma also visited the site of the West Container Terminal (WCT), a deepwater shipping container terminal in the Port of Colombo. The WCT, currently being constructed by Colombo West International Terminal (CWIT) Private Limited with 553 million US dollars in financing from the U.S. International Development Finance Corporation, will provide critical infrastructure for the South Asian region, the embassy said.

“Operating near capacity since 2021, the Port of Colombo’s new addition will be the port’s deepest terminal and aims to boost Colombo’s shipping capacity, expanding its role as a premiere logistics hub connecting major routes and markets, boosting prosperity for Sri Lanka without adding to its sovereign debt,” it said. (Colombo/Feb27/2024)

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