Sri Lanka faces risk of international airlines pullout after fuel notice
ECONOMYNEXT – Sri Lanka may face international flights pulling out of the country after the island nation’s civil aviation authority (CAA) issued a notice to such airlines asking them to carry return fuel when arriving in Sri Lanka, industry experts warn.
After June 28, 2022, aircrafts will have to carry their return fuel according to a CAA notice to airmen (NOTAM) which strictly advised scheduled and non-scheduled airlines to carry return fuel when arriving in the island nation as Sri Lanka’s oil bunkers are out of A1 jet fuel.
“We can’t go on like this but temporarily airlines can bring their return fuel and SriLankan can fuel at their onward destinations,” a top CAA official told Economy Next.
The island’s main Bandaranaike International Airport has a 7.8 million litre capacity fuel tank while Mattala International airport has a 3 million litre fuel tank.
A NOTAM was issued on June 26, when Sri Lanka is looking for more tourists to boost foreign inflows.
The move signals the jet-fuel tanks have run dry at the airport.
Sri Lanka is going through a severe forex crisis in it’s 72-year history created by ill-advised soft-pegged monetary policies.
The fuel import bill for the first four months of 2022 has jumped 38 percent to 1.9 billion dollars, compared to the same period in 2021 and the country is desperate for dollars with its foreign reserves have fallen to just less than equal to one month of imports.
The recent downgrades by rating agencies following the debt default in April and suppliers asking for an up-front payment to supply fuel have hit the usual fuel supply to Sri Lanka.
Hence to obtain jet fuel, the ministry has invited a few companies including marine bunker companies to provide aviation fuel.
It has already selected one out of a half dozen companies to supply the Jet-A1 fuel, but the supply has yet to start.
The state-run Sri Lankan Airlines too has been given permission to import fuel.
“There’s a possibility of airlines opting out of Sri Lanka simply because their operational factors are becoming tenuous,” the official said.
Normally airlines make a considerable portion of revenue from their cargo hence don’t carry return fuel.
A flight choosing to refuel at a different destination will add extra operational time for the airlines that will have a direct impact on its crew too.
“For these factors, I don’t think airlines can continue for a long time. But for the time being, all airlines will look to manage the situation,” the official said.
Aircraft to carry extra fuel they must cut down on their cargo.
“So for how long can the airlines compensate on their payload? It’s business for them,” the official questioned.
Most aircraft that fly to Sri Lanka are short-sector narrow-body aircrafts A320 and A321 which have smaller tanks.
Most of the budget carries such as Indigo, Vistara, FlyDubia, Oman airlines operate on narrow body aircrafts to Sri Lanka.
“When you are a short sector, landing in another airport en route for refuelling is not practical. So, it will definitely be an issue,” he explained.
Whereas wide-body aircraft can easily carry fuel such as the aircraft operated by Emirates, Turkish Air, Etihad, Qatar and Singapore airlines.
For the moment he says wide bodies will be able to manage. However, it is likely to come with a cost that will shoot the ticket prices for air travel to Sri Lanka.
In the last two years, the island aggressively brought down newer airlines to the country with an average of 90 airline carriers arriving in the country on a daily basis.
Officials say the numbers have dropped down to around 42 airlines carrier per day including SriLankan Airlines
Officials are in discussion with state-run fuel retailer Ceylon Petroleum Corporation (CPC) to find ways to supply the needed fuel and they are hopeful something can be sorted out. (Colombo/june27/2022)
