Airlines welcome reduction in charges

Wednesday, 10 July 2019 00:00 -     - {{hitsCtrl.values.hits}}

 From left: SLAAR Chairman Gerard Victoria, Tourism Development Ministry Secretary S. Hettiarachchi Tourism Development Minister John Amaratunga, SLTDA Chairman Johanne Jayarathne, Board of Airline Representatives Chairman Dimuthu Tennakoon and Board of Airline Representatives Deputy Chairman Chandana De Silva 

- Pic by Sameera Wijesinghe


  • Post-Easter Sunday attacks 41 frequencies per week cancelled by airlines
  • Assure support for tourism revival in Sri Lanka with restoration of flights following 20-25% Govt. cost reduction 
  • China Eastern to resume flights from 1 Sept.; Emirates back on track with 4 times daily

By Charumini de Silva

The airline industry yesterday welcomed the reduction in charges, noting that the move will boost business climate and tourist arrivals. The Cabinet on Sunday gave approval for a slew of charges, including ground handling, aviation fuel and embarkation levy, to be reduced for six months, to assist the tourism industry to recover after the Easter Sunday attacks. At a special press conference yesterday, the Board of Airline Representatives (BAR) and the Sri Lanka Association of Airline Representatives (SLAAR) assured their full support to Sri Lanka Tourism, by increasing capacity and resuming cancelled frequencies.

“Immediately after the 21 April attacks, 41 frequencies to Sri Lanka per week were cancelled by airlines, causing a traffic drop.

With this move, all the airlines will now fully support to increase the capacity and resume those cancelled frequencies. We will make sure that all the airlines will work closely with their Head Offices to increase the frequencies,” BAR Chairman Dimuthu Tennakoon told journalists.

Noting that reduction in fuel and ground handling costs accounts to a significant percentage of any airline operator, BAR expect that the airlines will also work closely with tour operators in those markets to increase tourist numbers into Sri Lanka with attractive airfares from all markets. 

Sri Lanka is comparatively very expensive in the region and this move will reduce the overall cost of operation for the airlines.

China Eastern Airlines yesterday confirmed that the airline would resume operation to Colombo from 1 September. The airline cancelled their Sri Lankan summer schedule from 1 May until further notice, following the Easter Sunday terror attacks and after the Chinese Government issued an adverse travel advisory on Sri Lanka.

China Eastern stopped the four weekly flights operating from Colombo to Shanghai from 1 May.

“The first flight will be operational from 1 September, followed by the second flight in October. Thereafter we will increase the frequency to our normal four flights per week,” China Eastern Airlines General Sales Agent Dart Aviation Director and General Manger Eustace Silva said.

He also said with the introduction of new concessions for the airlines operating to Bandaranaike International Airport (BIA), there are possibilities to increase frequencies.

“We might go for a daily flight,” he added.

Emirates Area Manager for Sri Lanka and Maldives Chandana de Silva said they are also back on track to four flights a day from this month.

“Most of the airlines unfortunately had to cancel many flights, including Emirates. We had to ad-hoc cancel our flights for about a month or two as it was not viable. It is on a very positive note I say, we are back on track to four flights a day,” he added.

It was also pointed that Qatar Airways have also resumed all their flights to Colombo. However, some Indian carriers like Air India and Indigo are yet to resume normal operations to Sri Lanka.

SLAAR Chairman Gerard Victoria said the move will give some impetus for new airlines to look at coming to Sri Lanka.

Vistara, a joint venture between Tata and Singapore Airlines, as well as Jetstar, a wholly owned subsidiary of Qantas, were looking at commencing operations to Sri Lanka. “I am aware that some of our members had some airlines that were going to commence operations to Sri Lanka during this year. However, following the 21 April Easter Sunday terror attacks they delayed those plans. It is important to talk to them and encourage them to operate to Sri Lanka, at least from October onwards,” he stressed.

Noting that cost of operation will be more viable now for the airlines, he however said that the reduction in handling charges would not reflect much on the ticketing prices.

Following this move by the authorities, BAR Deputy Chairman Chandana De Silva said some of the Indian, Middle Eastern, and Far Eastern carriers now have the confidence to come back and retain. “This is a great step towards positivity. With the introduction of these concessions, all airlines will propagate that to our members, and positively look at this position for us to come back and retain. This will also influence us to get our lost passengers back again,” he added.

He also said for the month of July, onwards they have not seen any cancellations.

“We have seen a slight pickup for October, November and December in bookings and I am confident that this momentum would pick up,” de Silva said.

He also emphasised that this message has to be reached to every mega carrier such as Lufthansa and British Airways to encourage more airlines to look at Colombo as a viable destination to operate.

Sri Lanka Tourism Development Authority (SLTDA) Chairman Johanne Jayaratne said that with ground handling, fuel and embarkation levy reduced, overall airline operations costs would drop to about 20% to 25% at the BIA, making it on par with other Asian airports.

“This has been an ongoing problem for the past 12 years, and these three components have to come down to encourage tourism to grow. From the response I got over the past 24 hours, the airlines are very positive on the move, and we will definitely see an increase in the frequencies,” he added.

Jayaratne said each airline has a different agreement in terms of ground handling with SriLankan Airlines, and instead of doing a blanket discount, they have presented with the present tier based on the aircraft that’s coming in as well as the frequency.

“In terms of fuel, it was decided that we look at the prices in Chennai. We found that it would be the best price for us to follow. With regards to the embarkation levy, which was at $50 and was increased by $10 in Budget 2019, we have now decided to keep it at $50. All of this would relate to about 20% to 25% reduction in overall operational cost of an airline. When all of this is actually put into practice, we will be on par with the Asian region,” he pointed out.  

SLTDA believes that the airlines will do the necessary to have this reduction also reflected in the ticketing, which would further help to attract more tourists into Sri Lanka.

“This (reduction in airport charges) comes at a very timely moment, because we just rolled out a new campaign in India in collaboration with Master Card and, we are already seeing an increase in those numbers,” he said.

Jayaratne said the recovery is happening in much faster than they anticipated. “We are very well on the path to reaching the numbers where we were in 2018. On Sunday alone, we recorded over 3,700 tourist arrivals when our median arrival number was about 7,000 last year. As of end of May we exceeded one million tourist arrivals. If we are to look at it from a very conservative standpoint at 60,000 arrivals for a month for the next few months, we will top 2 million tourist arrivals by end of the year,” he pointed out.

Following the 21 April Easter Sunday attacks, a total of 11 foreign airlines reduced their flight frequencies to Bandaranaike International Airport (BIA). By April 2018, 29 airlines were serving Sri Lanka offering 300 flights per week. However, following the 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.  Rossiya (Russian Airline) withdrew completely (two flights/week), resulting in a complete loss of direct air connectivity with Russia. However, most of the airlines which reduced frequencies are low-cost carriers.