Kuwait Airways pulls out as dollar crunch hits airline operations

Migrant workers, tourism industry badly affected; another airline reassessing its presence

Kuwait Airways pulled out from flying into Sri Lanka this week in the midst of the "dollar crisis" threatening tourism arrivals with airlines reluctant to increase flights as local offices have fallen back on settling dues.

The airline, which only resumed operations to Sri Lanka in September--and that, too, just one flight per week, has pulled out, with no reason officially given.

The last flight was on Wednesday and authoritative sources said that the airline's "yields were also too low in comparison with the expense of operating the flight to Sri Lanka".

The withdrawal is expected to last an extended period of time and will mostly affect migrant worker traffic as thousands of Sri Lankans use Kuwait Airways to travel for employment to West Asia and the Gulf countries. There is indication that another airline is now reassessing its options, the Sunday Times learns.

Industry sources warned last week that general sales agents (GSAs) and local airline offices have for months fallen back on their dues-- payable in dollars-- to principals abroad. They said some companies might cut frequencies. The problem had been brewing over “four-to-five months”.

In the case of Kuwait Airways, there were also concerns about high landing costs in Sri Lanka which are among the highest in the region. There was, however, no shortage of passengers for the airline, which offered some of the cheapest West bound fares out of Colombo.

Meanwhile, the Board of Airline Representatives (BAR) has written to the Director-General of Civil Aviation (DGCA) highlighting several issues affecting the industry. It has been in discussions with authorities for weeks regarding difficulties in securing foreign exchange.

Trouble in the airline industry will seriously impact the recovery of tourism, one sector the Government is heavily banking on the bring in much-needed dollar revenue.

The companies presently operating into Sri Lanka are Emirates, Qatar Airways, Fly Dubai, Air India, Gulf Air, Rossiya Airlines, Singapore Airlines, Turkish Airlines, Saudia, Air Arabia, Oman Airlines, Air Asia, Air France, Etihad Airways, Jazeera Airways, IndiGo, Aeroflot, China Eastern Airlines, Edelweiss Air, Azur Airlines, Air Astana, Lot Polish Airlines, Neos Airlines and Vistara Airlines.