ECONOMYNEXT – Sri Lanka’s travel agents have called for the government to mandate a balanced contract or insurance for foreign airlines selling tickets in the island, after being forced to refund or fly back passengers of the failed Indian airline Jet Airways.
Travel agents in Sri Lank had already made payments to the Billing and Settlements Plan (BSP), a clearing system operated by the International Air Transport Association (IATA).
“Now we have a huge issue,” Nishantha Senaveratne, President of the IATA Agents Association in Sri Lanka said at forum in Colombo.
“Money has been collected and had been permitted to BSP and our clients are forcing us to pay their money back.”
He said 52 travel agents in Sri Lanka had been hit. They had to refund money to those who had bought tickets when JetAirways ceased operations and also had to fly back stranded passengers from as far back as London.
He said 52 travels agents had made complaints. The losses of 24 travel agents alone had totaled 11 million rupees so far.
Seneviratne said the travel agents have obligations toward BSP to do the payments as soon as the issuing of a ticket.
“If we default the payment they will stop us from trading,” he said.
However there was no similar obligation set on the airline if it defaults.
Sri Lanka’s travel agents had also had to bailout passengers when India’s Kingfisher Airlines went bankrupt and it was a recurring problem, he said.
Senaveratne sought help from Sri Lanka’s civil aviation authorities to enforce a similar condition on airlines that operated to Sri Lanka and sold tickets.
“I am saying there should be a bank guarantee from the air lines as well,” he said.
India’s JetAirways went bankrupt in 2019, partly due to a steep fall of the Indian rupee in 2018. The Reserve Bank of India operates an exchange regime that floats part of the time, but collects forex reserves and sterilizes interventions in both directions, leading to steep falls at times.
Up to 70 percent of an Indian airline’s expenses including lease rentals, maintenance, training and some salaries were dollar denominated, while selling tickets mostly in Indian rupees. (Colombo/Oct25/2019)