07 April 2011

Airline Passenger & Investor Protection Strengthen in Sri Lanka

06th April 2011, www.lankabusinessonline.com

Sri Lanka plans to introduce consumer protection laws and ratify international conventions that will better protect investors and ensure higher compensation for airline passengers, an official said.

"We're planning to bring consumer protection laws aiming at some aspects of passenger travel," said H M C Nimalsiri, director general of civil aviation authority.

"Today, some passengers go to the airport with confirmed tickets but at the last moment are denied boarding.

"We need to bring rules like what's applied in Europe where if passengers with confirmed boarding passes are denied boarding, airlines should pay compensation for inconvenience caused to them."

Nimalsiri also said the government expects to ratify two international conventions that will increase airline liability and compensation for passengers and better protect investors.

The Warsaw Convention that is presently followed provides compensation of only 16,600 US dollars in the event of a passenger fatality.

Under the Montreal Convention the compensation can go up to 100,000 dollars, Nilamsiri said.

"If a passenger's relations can prove death was due to airline negligence, then the liability would be unlimited."

Sri Lanka also intends to ratify the Cape Town convention that creates international standards for the registration of ownership of mobile equipment like aircraft and engines.

The convention safeguards claims of all parties in airline transactions and gives an assurance to investors to invest in the sector, Nimalsiri said.

Provisions in the convention are seen as reducing the uncertainty of lenders in aircraft financing, offering them better protection, and thereby reducing the interest rate they charge.

This is seen as particularly beneficial for developing economies because of the higher interest rates their airlines often have to pay.

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