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Ground Handling Charges, Aviation Fuel and Embarkation Levy reduced to pull tourists

15 Jul 2019

Sri Lanka Tourism Development Authority (SLTDA) together with the Prime Minister’s Office, Minister of Tourism, Wildlife, and Christian Religious Affairs John Amaratunga, and Civil Aviation Authority of Sri Lanka tabled a Cabinet paper and received the approval for the reduction of ground handling charges, aviation fuel, and the embarkation levy for six months on Monday (7). In 2018, approximately 2.3 million tourists arrived and spent 25 million nights in the country while generating an income of $ 4.4 billion. More than 98% of tourists to Sri Lanka are currently brought by international airlines. 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 flight 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. Eleven foreign airlines reduced their flight frequencies to BIA while one airline (Rossiya –Russian Airlines) withdrew completely (two flights/week), resulting in a complete loss of direct air connectivity with Russia. Most of the airlines which reduced frequencies are low-cost carriers. Accordingly, the direct and indirect negative impact of the Easter Sunday attacks per day is approximately Rs. 12 million and Rs. 51 million, respectively. Given the need to resurrect the tourism industry which was badly affected by the Easter Sunday attacks, SLTDA took prompt action to work with the Prime Minister’s Office as well as the Ministry of Tourism, Wildlife, and Christian Religious Affairs and the Civil Aviation Authority of Sri Lanka to draft a Cabinet paper and initiate the implementation of the following reductions in aviation-related discounts in order to encourage airlines to reduce the cost of airline tickets and combine these specially priced tickets with the discounts being offered by hotels and restaurants in Sri Lanka. “The positive and immediate action taken by the Government, especially by the Prime Minister, Minister John Amaratunga, and Director General of Civil Aviation H.M.C. Nimalsiri in response to the urgent request made by the SLTDA comes at a critical time and is most appreciated,” said SLTDA Chairman Johanne Jayaratne. “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 going forward,” he added. The Cabinet paper was tabled under the signature of the Prime Minister and the following are the decisions. Aviation fuel (Ceylon Petroleum Corporation [CPC]) – decision was taken to instruct CPC to reduce their aviation fuel price to match with the price in Chennai airport. Embarkation levy (Department of Immigration and Emigration) – temporary postponement of the Budget proposal to increase the embarkation levy by $ 10 and leave at the current rate of $ 50. Photo: Krishan Kariyawasam

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