Colombo’s debts to airlines cross $150 mln

Airlines operating to Sri Lanka need to be paid over US$150 million in dues as a result of the foreign exchange crisis in the country, resulting in most carriers limiting or withdrawing their flights from Colombo.

Over the last 3-6 months payments for cargo and passenger travels have got accumulated, sources in the airline industry said.

These are the repercussions of not been able to carry out remittances in foreign currency through Sri Lankan banks due to current shortage in foreign exchange.

Moreover, agents in Colombo are forced to bear the losses from the depreciating rupee as payments made when the build-up started was at the rate of Rs.203 but now it’s at Rs.360 against the dollar.

Sources point out that as a result of this issue while some airlines are stopping ticketing facility from Sri Lanka, others have taken the ticketing agents out.

Due to the limited capacity airfares have also increased and ticketing by some carriers is being shifted to other countries.

Agents are forced to stop selling tickets as some carriers have moved out of the Billing and Settlement Plan (BSP) platform and now it is feared that the worst is expected if all airlines pull out. This will have an immediate impact on travel agents operating in the country.

Moreover, it is learnt that certain airlines have stopped accepting cargo originating in Sri Lanka as well.

While you still can purchase a ticket to fly out of Colombo, foreign airlines are imposing restrictions on their operations. In this respect, carriers are looking at restricting the number of tickets they process but all are adopting different strategies to ensure they reduce transactions within Sri Lanka, like favouring credit card transactions and online payments.