Airlines crash landing on ticket sales

Continued from Page 1 Following a meeting with the Central Bank the BOA had been able to obtain the necessary approvals to carry out their proposal.

Mr. Nimalsiri said that it was the Central Bank’s prerogative to take fiscal policy decision and that they had no say in the matter. In fact they were only asked to come up with a package on fixing the exchange rate.

The request from the BOA had been to consider the rates stipulated by the International Air Transport Association (IATA).

The consideration taken into account by the CAA would be the concern that the consumer would not be impacted.

He pointed out that about 10 years back this policy had been adopted for a short period but subsequently it was withdrawn once the rupee stabilised.

But BOA Chairman Dimuthu Tennakoon commenting on the development said that no approvals have been obtained to implement the said proposal and that it was only at the preliminary stage.

He however said they had discus- sions with the Central Bank and the CAA on the matter and believes it will take some time for implementation as they need to have discussions with the industry and other stakeholders involved in the process.

However, these recent moves stirred up a hornet’s nest among the industry stakeholders since the policy was introduced without prior consultation.

“It’s a crazy thing – the countries that have this kind of scheme are African countries in dire straits,” Travel Agents Association of Sri Lanka President Trevor Rajaratnam told the Business Times.

He noted that international carriers operating into Sri Lanka were the ones that mooted this idea in the wake of the depreciating rupee in the recent past.

However, Mr. Rajaratnam pointed out that SriLankan Airlines has also agreed to this move to ensure that airline tickets would be purchased through dollars thereby bringing down the image of the country.

He explained that what happens under the new policy is that airlines would offer travel agents air fares by using the rate of exchange that they would fix for a two week or one month period.

When a customer like a government office or corporate request for a quotation on the price of an airline ticket during the latter part of the time period, this price is likely to change when the actual purchase is made, he said.

This would mean that the travel agent would be compelled to go for a fresh quotation again, Mr. Rajaratnam said.