Reduction of ground handling charge brings no benefit to the country-Anura Kumara

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By Rose Kenny

JVP Leader Anura Kumara Dissanayake said in parliament yesterday that the Board of Directors of Sri Lankan Airlines were not in agreement of the decision taken by the government to reduce the ground handling charges for services provided by Sri Lankan Airlines to other airlines at the Bandaranayake International Airport,  adding that this was a political decision which brings no benefit to the country and causes huge losses to the government.

Raising a question under standing orders 27/2 in parliament yesterday he said based on a Cabinet decision the government had reduced the ground handling charges at the BIA for a period of six months commencing from August 01st.

“This decision was announced by the Director General of Civil Aviation and the government has also taken steps to provide fuel for aircrafts and lubricants at concessionary rates and grant tax concessions. They had taken this decision on the presumption that the ground handling charges at the BIA was high and that by reducing the ground handling charges it would be a boost to attract more tourists to the country. However, experts in this field have pointed out that this is a futile exercise and that by this decision the government stands to lose a huge sum of money.”

Dissanayake noted that the benefit of the reduction of ground handling charges is eventually for the airline companies and not the passenger. “However, these airlines, while enjoying the reduction in ground handling charges, has not signed any agreement to increase the seating capacity of their flights to the country or reduce the price of tickets. Therefore, the claims that this decision would attract greater numbers of tourists to the country is baseless,” he added.

However, he said that due to the reduction in ground handling charges alone, Sri Lankan Airlines loses around $ 710,000 (Rs. 124,840,652) per month. Within the six month period that the reduction of ground handling charges is enforced, the country would stand to lose around $ 4.3 million (Rs. 776 million). “Similarly, as the tourist arrivals have yet not returned to normalcy after the Easter Sunday attacks, due to the decision taken to reduce ground handling charges Sri Lankan Airlines stands to lose an estimated $ 800,000 monthly, amounting to a loss of $ 4.8 million during the six months. This is in addition to the loss by providing fuel concessions.

Since 2008 Sri Lankan Airlines had not increased ground handling charges and in 2016 these charges for various airlines was reviewed. Accordingly, a decision was taken to remove all unfair benefits enjoyed by certain airlines and a system of providing concessions based on the number of flights was approved. Accordingly, Air India and Singapore Airlines increased charges by 18%, Saudi Airlines by 15%, Turkey Airlines by 13%, Korean Airlines by 8% and Emirates by 4%. Meanwhile, Etihad had reduced their charges by 4%, Qatar Airways and Air China by 5%, Air Asia and Malaysian Air by 6%, Air Arabia by 10%. Under such circumstances, there was no requirement to reduce the ground handling charges,” he said.

According to Dissanayake, by the reduction in ground handling charges, Emirates stands to gain around $ 1200 per flight. “However, while Emirates has to pay $ 4864 per flight to Colombo, Sri Lankan Airlines has to endure a charge of $ 5118 in Dubai which is operated by the Emirates Airlines ground handling company Dnata.