Sri Lanka to cut costs for airlines to revive tourism

ECONOMYNEXT – Sri Lanka will reduce aviation fuel prices, ground handling charges and embarkation levy to lure back airlines which cut flights after April’s suicide bombings, with the highest gains for the most frequent carriers and biggest aircraft.

The ground handling charges, aviation fuel, and embarkation levy will be reduced for six months, Sri Lanka Tourism Development Authority said in a statement.

The aviation-related discounts aim to encourage airlines to reduce airline ticket prices and combine the specially priced tickets with discounts being offered by hotels and restaurants in Sri Lanka.

The measures were approved by the Cabinet of ministers this week.

Aviation fuel prices will be reduced to match those at Chennai, south India, a planned 10 dollar increase in the embarkation levy would be put off, leaving it at 50 dollars, and SriLankan Airlines asked to cut ground handling charges.

In 2018, the island earned 4.4 billion US dollars with about 2.3 million tourists visiting the country and spending 25 million-nights in the country, mostly brought by international airlines.

By April 2018, 29 airlines were serving Sri Lanka offering 300 flights per week.

“However, following the April 21st Easter Sunday attacks, the connectivity was reduced to 239 flights per week resulting in a total of 41 flights cancellations which amounts to a loss of seat supply by 8,000 per week from six countries – China, Hong Kong, India, Malaysia, Oman, and Thailand,” the statement said.

Eleven foreign airlines reduced their flight frequencies to Bandaranaike International Airport while Russian airline Rossiya withdrew completely its two flights a week, resulting in a complete loss of direct air connectivity with Russia.

“Most of the airlines which reduced frequencies are low-cost carriers,” Sri Lanka Tourism said.

The direct and indirect negative impact of the Easter Sunday attacks is about 12 million rupees and 51 million rupees a day.

“The positive and immediate action taken by the government, in response to the urgent request made by the Sri Lanka Tourism Development Authority, comes at a critical time and is most appreciated,” said Johanne Jayaratne, chairman, Sri Lanka Tourism Development Authority.

“The authority will be working closely with the Board of Airline Representatives (BAR), and the Sri Lanka Association of Airline Representatives (SLAAR) to ensure that these lowered rates are reflected in the airline ticket pricing.”
(COLOMBO, 08 July, 2019)