{"id":96395,"date":"2022-07-27T18:08:38","date_gmt":"2022-07-27T18:08:38","guid":{"rendered":"https:\/\/websitedesigns.com.au\/elankanew\/?p=96395"},"modified":"2022-07-27T18:08:38","modified_gmt":"2022-07-27T18:08:38","slug":"sri-lanka-faces-risk-of-airlines-pulling-out-as-jet-fuel-issue-worsens-by-nishel-fernando","status":"publish","type":"post","link":"https:\/\/websitedesigns.com.au\/elankanew\/sri-lanka-faces-risk-of-airlines-pulling-out-as-jet-fuel-issue-worsens-by-nishel-fernando\/","title":{"rendered":"Sri Lanka faces risk of airlines pulling out as jet fuel issue worsens-By Nishel Fernando"},"content":{"rendered":"<h1 style=\"text-align: center;\"><span style=\"font-size: 24px; color: #000000;\">Sri Lanka faces risk of airlines pulling out as jet fuel issue worsens-<span style=\"color: #800080;\">By Nishel Fernando<\/span><\/span><\/h1>\n<p><img loading=\"lazy\" loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-96396\" src=\"https:\/\/websitedesigns.com.au\/elankanew\/wp-content\/uploads\/2022\/07\/Ceylon_Petroleum_Corporation.png\" alt=\"Ceylon_Petroleum_Corporation\" width=\"275\" height=\"255\" \/><\/p>\n<p><strong><span style=\"font-size: 16px; color: #800080;\">Source:<\/span><\/strong><span style=\"color: #000000;\"><a style=\"color: #000000; font-size: 16px;\" href=\"https:\/\/www.dailymirror.lk\/business__main\/Sri-Lanka-faces-risk-of-airlines-pulling-out-as-jet-fuel-issue-worsens\/245-241722\" target=\"_blank\" rel=\"noopener noreferrer\">Dailymirror<\/a><\/span><\/p>\n<ul>\n<li style=\"text-align: justify;\"><span style=\"font-size: 16px; color: #000000;\"><strong>No solutions found yet for jet fuel shortage and fund repatriation issues faced by local aviation industry\u00a0<\/strong><\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-size: 16px; color: #000000;\"><strong>Cabinet proposal to allow bunker fuel license holders to import jet fuel, appears to be a non-starter<\/strong><\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-size: 16px; color: #000000;\"><strong>Airlines have cut air seat capacity to Sri Lanka by 53% over the past couple of months as they carry additional fuel for return trip<\/strong><\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-size: 16px; color: #000000;\"><strong>Due to fund repatriation issues, Sri Lanka and Pakistan have been moved to IATA\u2019s \u2018blocked funds\u2019 list from the \u2018watchlist\u2019<\/strong><\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-size: 16px; color: #000000;\">With no credible solution in sight to resolve the jet fuel shortage and the fund repatriation issues faced by the country\u2019s aviation industry, several airlines are contemplating on suspending their operations to Sri Lanka threatening tourism industry\u2019s recovery, which depends on air connectivity.<\/span><\/p>\n<p style=\"text-align: justify;\"><!--more--><br \/>\n<span style=\"font-size: 16px; color: #000000;\">The Cabinet of Ministers last month approved a joint proposal to allow the importation, supply and sale of Jet A-1 aviation fuel by bunker holders registered with the Sri Lanka Ports Authority (SLPA) in order to sustain aviation services after Ceylon Petroleum Corporation (CPC), which holds the fuel supply monopoly, failed to import the required jet fuel due to the foreign exchange crisis.<\/span><\/p>\n<p style=\"text-align: justify;\">\n<span style=\"font-size: 16px; color: #000000;\">However, bunker fuel license holders are yet to act on the proposal due to several issues, a leading bunker fuel licence holder told Mirror Business. He said jet fuel (jet A1) trade involves a different supply chain, which requires finding new suppliers, who are willing to provide jet fuel on a minimum 30-day credit basis.\u00a0<\/span><\/p>\n<p style=\"text-align: justify;\">\n<span style=\"font-size: 16px; color: #000000;\">\u201cIt\u2019s very difficult. One solution is that four or more bunker fuel license holders should form a consortium and move ahead with imports. In addition, they also need to secure a line of credit from suppliers for a minimum 30-day period. So, they can refuel aircraft, collect payments in US$ and pay up the suppliers. Otherwise, I don\u2019t believe that anyone is in a position to make upfront payments in US$,\u201d he elaborated.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 16px; color: #000000;\">However, he suggested that the government should instead focus on bringing another player into the jet fuel trade or a third player into overall fuel business by setting up a mechanism, which would ensure an uninterrupted supply of jet fuel to aircraft.<\/span><\/p>\n<p style=\"text-align: justify;\">\n<span style=\"font-size: 16px; color: #000000;\">BIA officials said currently there are no moves to bring in jet fuel either via CPC or any other alternative method.<\/span><br \/>\n<span style=\"font-size: 16px; color: #000000;\">\u201cThere are potential mechanisms and models, but nothing has been done yet. Airlines are diverting their flights to other airports. As of now, some airlines have already pulled out and some airlines are talking about pulling out. Once they pull out, it would be quite hard to get them back,\u201d a BIA official said.<\/span><\/p>\n<p style=\"text-align: justify;\">\n<span style=\"font-size: 16px; color: #000000;\">The situation has been exacerbated with local airline representatives failing to remit about US$ 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\u2019s \u2018blocked funds\u2019 list from the \u2018watchlist\u2019 recently.<\/span><br \/>\n<span style=\"font-size: 16px; color: #000000;\">\u201cThere is no mechanism to remit these funds.\u00a0 So, obviously, airlines are increasing airfares in order to mitigate foreign exchange losses. Airfares have doubled compared to 2-3 months ago, it\u2019s a direct result of these issues, \u201ca local airline representative said.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 16px; color: #000000;\">According to industry officials, airlines have cut seat capacity to Sri Lanka by 53 percent over the past couple of months.<\/span><\/p>\n<p style=\"text-align: justify;\">\n<span style=\"font-size: 16px; color: #000000;\">\u201cThe usual legacy carriers continue to operate, but with less frequencies. However, it\u2019s mostly SriLankan Airlines that makes tech stops in South Indian airports incurring additional costs. Most other carriers fly to Colombo with a full tank and go back. This limits the payload of each flight, which means they can\u2019t carry intended passenger and cargo capacities. Even for a narrow-body aircraft coming from northern India, it needs to be refueled here\u201d he noted.<\/span><\/p>\n<p style=\"text-align: justify;\">\n<span style=\"font-size: 16px; color: #000000;\">According to Aviation Worldwide Limited\u2019s airline frequency and capacity trend statistics report, air seat capacity to Sri Lanka declined by 27.6 percent year-on-year in both June and July to-date.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sri Lanka faces risk of airlines pulling out as jet fuel issue worsens-By Nishel Fernando Source:Dailymirror No solutions found yet for jet fuel shortage and fund repatriation issues faced by local aviation industry\u00a0 Cabinet proposal to allow bunker fuel license holders to import jet fuel, appears to be a non-starter Airlines have cut air seat [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":96396,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"aside","meta":{"footnotes":""},"categories":[20],"tags":[45142,44739,1745],"class_list":{"0":"post-96395","1":"post","2":"type-post","3":"status-publish","4":"format-aside","5":"has-post-thumbnail","7":"category-articles","8":"tag-ceylon-petroleum-corporation","9":"tag-sri-lanka-ports-authority","10":"tag-srilankan-airlines","11":"post_format-post-format-aside"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.7.1 (Yoast SEO v25.9) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Sri Lanka faces risk of airlines pulling out as jet fuel issue worsens-By Nishel Fernando<\/title>\n<meta name=\"description\" content=\"No solutions found yet for jet fuel shortage and fund repatriation issues faced by local aviation industry\u00a0Cabinet proposal\" \/>\n<meta name=\"robots\" content=\"noindex, 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