Govt slashes aviation levies

The Cabinet has approved the reduction of ground handling charges, aviation fuel and the embarkation levy for Six months.
The Cabinet paper was tabled under the signature of Prime Minister Ranil Wickremesinghe. This is subsequent to a Cabinet paper that was tabled by Sri Lanka Tourism Development Authority together with the Prime Minister’s office, the Minister of Tourism, Wildlife and Christian Religious Affairs, John Amaratunga and the Civil Aviation Authority of Sri Lanka.
In 2018, approximately 2.3 million tourists arrived and more than 98% were brought by international airlines. “By April 2018, 29 airlines were serving Sri Lanka offering 300 flights per week. However, following the April 21 Easter 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,” said Chairman of the Sri Lanka Tourism Development Authority (SLTDA), Johanne Jayaratne.
Eleven foreign airlines reduced their flight frequencies to BIA while one airline (Rossiya -Russian Airline) withdrew completely (2 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 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 attacks, SLTDA took prompt action to work with the Prime Minister’s Office as well as the Ministry of Tourism, and the Civil Aviation Authority to draft a Cabinet paper and initiate the implementation of the following reductions in Aviation-related discounts 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 Prime Minister Ranil Wickremesinghe, Minister John Amaratunga and the DGCA, H. M. C. Nimalsiri, in response to the urgent request made by the Sri Lanka Tourism Development Authority, comes at a critical time and is most appreciated”, Jayaratne, said.
“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,” he added.
Decision was also taken to instruct CPC to reduce their aviation fuel price to match with the price in Chennai airport.
It was also decided to temporary postpone the Budget proposal to increase the embarkation levy by USD 10 and leave at the current rate of USD 50.