Final decision on cutting airfares to boost tourism likely today

• Ground handling changes may come down by 40%
• Embarkation levy likely to be reduced to US $ 40 from US $ 60

By Nishel Fernando 

The government is likely to reach a final decision today on measures to bring down the costly airfare structure at Bandaranaike International Airport (BIA), at a high level meeting between Prime Minister Ranil Wickremesinghe and aviation sector stakeholders.

Sri Lanka Tourism Development Authority (SLTDA) Chairman Johanne Jayaratne last week revealed that the government is considering cutting down ground handling charges by 30-40 percent while reducing aviation fuel prices and embarkation levy in order to bring down airfares at BIA in a bid to support the tourism sector in the aftermath of Easter Sunday attacks. 
He noted that the embarkation levy may be reduced from US $60 to US $40 per tourist. However, Jayaratne said that these proposed measures would be in force for a limited time period of six months.

“All of this will encourage more airlines to come to Sri Lanka,” Tourism Development, Wildlife and Christian Religious Affairs Minister John Amaratunga said. 

Top officials of SLTDA, Airport & Aviation Services (Sri Lanka) Limited, Ceylon Petroleum Corporation, SriLankan Airlines, Civil Aviation Authority (CAA) and the Finance Ministry are invited to attend today’s meeting at the Temple Trees chaired by the Prime Minister. 

Advisor to the National Policies, Economic Affairs, Resettlement & Rehabilitation, Northern Province Development and Youth Affairs Ministry, R. Paskaralingam at an earlier meeting chaired by Finance Ministry Secretary Dr. R H S Samaratunga had indicated the government was determined to cut the ground handling charges as it significantly contributed to high airfares structure at BIA. 

Speaking of reducing aviation fuel prices, the CPC officials informed that they already had reduced the prices and CPC was running on thin margins in supplying fuel to airlines. 
However, speaking to Mirror Business CAA Director General H.M.C Nimalsiri said BIA has the highest jet fuel rates in the region. 

“In relation to ground handling and cost of aviation fuel, we have received complaints from airlines noting that those charges are very high,” he said.He stressed that both ground handling charges and aviation fuel rates need to be brought down on par with the regional rates in order to remain competitive with other tourist destinations in the region. Nimalsiri opined that the country needs to look at increasing revenue from tourists by offering various products and services instead of focusing on collecting multiple charges and taxes at the point of entry.
He pointed out that high entry cost could misinterpret Sri Lanka as a high-cost destination for tourists. The airfares from Europe to Sri Lanka are the most expensive, compared with the other key tourist destination in the South and Southeast Asian regions, according to a recent study by AG SEP Research. 

In the aftermath of Easter Sunday attacks, 78 weekly inbound flights were cancelled, which led to over 300 flight cancellations per month amid booking cancellations and slowdown in forward bookings.   

Nimalsiri noted that theses airlines will resume their usual flights from mid of September targeting the winter season. 

The average daily tourist arrivals figures to the country improved to around 2 300 - 2 500 in June compared to 1 200 average daily tourist arrivals in May.