Sri Lanka faces risk of airlines pulling out

Sri Lanka faces risk of airlines pulling out

Airlines are starting to cut frequencies  to Sri Lanka and the country is running the risk of some airlines pulling out an official said as the main airport runs out of aviation oil and local airline representatives failing to remit funds collected via ticket sales owed to their principles through banking channels.

With no credible resolution in sight to resolve the jet fuel scarcity and the fund repatriation points confronted by the nation’s aviation business, a number of airways are considering on suspending their operations to Sri Lanka threatening tourism business’s restoration, which relies on air connectivity.

The situation has been exacerbated with local airline representatives failing to remit about US$ 200 million worth funds collected via ticket sales owed to their principles through banking channels over the past 6-7 months. As a result, Sri Lanka and Pakistan have been moved to IATA’s ‘blocked funds’ list from the ‘watchlist’ recently.

Sri Lanka Civil Aviation Authority issued a notice asking airlines to carry fuel for their return journey from June 28 as the country ran out of Jet fuel.

The island’s main Bandaranaike International Airport has tanks which can hold 7.8 million litres of Jet-A1 fuel while Mattala International airport has 3 million litre capacity but Sri Lanka has low stocks of most fuel with the country unable to pay for fuel due to a severe currency crisis.

When airlines have to carry fuel for their return journey, known as tankering, they have to sacrifice cargo revenue. According to industry officials, airlines have cut seat capacity to Sri Lanka by 53 percent over the past couple of months.

BIA officials said currently there are no moves to bring in jet fuel either via CPC or any other alternative method.

“There are potential mechanisms and models, but nothing has been done yet. Airlines are diverting their flights to other airports. As of now, some airlines have already pulled out and some airlines are talking about pulling out. Once they pull out, it would be quite hard to get them back,” a BIA official said.

When an aircraft has to land at a third airport to refuel, costs go up, flights takes longer burning more fuel and crews also have to work longer hours.