Highlights, as reported by Airline Route Updates blog include
*Unlimited flights, destinations
for carriers from both sides
between US and Japan, except
Tokyo market.
*Unlimited operating carriers
from each side
*ATI (anti-trust immunity)
inclusion
* Up to 4 Daily service between
US and Tokyo Haneda for US
carriers
*US carriers’ slot shares at
Tokyo Narita to lower from 28%
to 25% once the airport slots
increases from March 2010 ( cannot be confirmed whether is this a reflection of increased slots to other carriers or an actual reduction )
*Due to slots issues at Tokyo
Haneda and Narita, slots
issuance for these two airports
remains to be Government
controlled
*Removal of restrictions of 5th
freedom rights beyond each
country (but approval from 3rd
country remains required)

ANA had long been seeking an Anti-Trust immunity with Continental and United.
This agreement also makes history as the first large-scale Open Skies deal signed by Japan.Similar Posts:

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• Stowaway in a Delta 777 found dead
• The Secrets of JAL-Delta deal rumour
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• SriLankan Looking at Resuming Jakarta, to go Daily to Rome

Photo by Airport Authority of Sri Lanka

Project Details

IATA/ICAO : N/A
Runways : One, 3500×75m
Taxiway : 370mx60m
Parking capacity : 10 apron stands
Handling Capability : Category 4F aircraft
Cities Served : Hambanthota, Ambalanthota
Approx Location : 6.281N 81.125E
Passenger Terminal : 10,000sq.m
Cargo Terminal : 1000sq.m
Expected annual movements : 6250

The airport is situated in very close proximity to the Hambanthota Port and this together with numerous industrial factories in the South would make this airport an excellent cargo hub.
The new airport’s location, in Mattala, will provide very easy and short access to a number of natural reservoirs and game parks in Sri Lanka – most of which are situated in the South. The airport will also be an excellent entry point to the close by beaches. These factors will make this airport a favourable choice to tourists visiting Sri Lanka.
However, Hambanthota airport is unlikely to have a high yield, at least in the beginning. One of the key reasons for this is that Hambanthota is still very much a under-developed rural area. It is no secret to say that this area being current President’s hometown could have played a part in the selection. Anyway, the government is rapidly building new infrastructure in the Southern Province and this will have a positive effect on the new airport.
The airport is located near the HAMBA waypoint, which is a connecting point for many international airways such as the L897. This will make the proposed airport a favourable stop and a safe alternate airport to aircraft on these routes, specially cargo flights.

Potential

The airport’s key potential will be cargo, at least initially. The airport will also be able to cater a good amount of tourist traffic. However, it is unlikely the airport will get hold of any O&D/VFR traffic for a few years from the launch. A key factor for this is the aforementioned poverty in the local catchment area. It should also be noted that the airport is situated far ( around 60km ) from the capital, Colombo. Nevertheless, the airport will be a lucrative cargo port with a good connectivity to the nearby port.

The Future

Unfortunately, the success of local aviation sector lies in the hands of politicians. The proposed airport is a single runway airport with a single non-airbridge terminal and almost no space for any kind of future expansion. This will leave Sri Lanka with two single runway medium sized airports, which are almost size restricted. If relevant ground infrastructure for this airport is not provided, it could well end up as a white elephant.
The best choice for the government could have been to expand the existing Colombo Airport ( CMB ), which suffers from a lack of capacity and a short runway. It is my personal opinion that, making our existing airport a hub – for which it has the potential, first and then going for a second airport will be a good choice. Lack of infrastructure at the rest of domestic airports remain a big issue as well.
However, the construction work has already begun. Let us wish the best for this new airport to succeed in its goals !Similar Posts:

• Why Should Sri Lanka abolish Weerawila and Develop Trinco and Jaffna airports instead
• Mattala International Airport : Dream or reality ?
• How to Make Colombo a hub like Singapore
• Gatwick Airport sold to City Airport owners for £1.5bn
• SriLankan Resumes Freighter Services

BAA today sold Gatwick Airport to Global Infrastructure Partners, who also owns the City Airport, for £1.5 billion. In case you missed our tweet earlier today, here is the full report.

LONDON (MarketWatch) — U.K. airports operator BAA on Wednesday reached a pact to sell London’s Gatwick Airport for 1.5 billion pounds ($2.5 billion) as part of forced divestiture to enhance competition.BAA, a unit of Spain’s Ferrovial (ES:FER), said it was selling the airport to Global Infrastructure Partners, a fund backed by investments from Credit Suisse (CS) and General Electric (GE), and with holdings ranging from waste management group Biffa to London City Airport.Of the sale price, 55 million pounds is conditional on future traffic performance and the buyer’s future capital structure.BAA had put Gatwick for sale in September 2008, before a final ruling from the Competition Commission that it had to sell the airport, as well as London Stansted and airports in either Edinburgh or Glasgow.Gatwick is the busiest single-runway airport in the world, handling 32.2 million passengers in the year to September.During the first half of the year, Gatwick earned 68.7 million pounds before interest, tax, depreciation and amortization, on revenue of 217 million pounds.BAA will use proceeds from the Gatwick sale to pay down debt. BAA carried 14.6 billion euros ($21.8 billion) of debt at the end of the first half. BAA’s crown jewel, however, is London’s Heathrow, which carried 65.7 million passengers during that time period. “BAA will focus on improving Heathrow and our other airports,” the company said in a statement.Ferrovial shares dropped 2.9% in early Madrid trade.

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What are the main inefficiencies of SriLankan ?

Over-staffing

SriLankan has a workforce of 6000 to serve a fleet of 12 aircraft . This means as much as 500 workers per aircraft whereas the industry standard is 100 workers per aircraft. This horrendous rate of overstaffing leads to an extremely low rate of labor productivity and is almost unaffordable for an airline of SriLankan’s scale.

Inefficient route network

I really respect SriLankan CEO Mr. Manoj as an expert and for trying to do his best for the airline. But I really do not understand why they keep creating more and more inefficient routes day by day.
Check these out:

SriLankan does not have 5th Freedom rights for any of the above intermediate sectors ( CDG-FCO, CDG-MXP, FRA-MXP ), this leaves the operation of these routes involving with high operating costs. Secondly, all of these routes are operated no more than twice weekly, which makes the flights less attractive for business and transit traffic. Third, you will be carrying your passengers some extra miles than they would originally need and pay for. On the other hand, passengers who want to fly to Milan will have to go to either Paris or Frankfurt and return. This will only help to increase the aircraft’s weight.

Unnecessary expenditure

Even while SriLankan is experiencing a $100m loss, the management has decided to change the airline’s uniform at a massive cost. Refreshing the brand is not a bad thing, but why would this become an unnecessary expenditure ?
1. There is no other rebranding effort being carried out
2. The airline is running on a loss and every single cent is important to keep the airline running
3. The airline’s previous uniform existed for 30 years and was almost an icon of the airline, just like the Singapore Airlines’ uniform. The change will include a colour change and this colour is representing the current government’s official colour. The new uniform is also believed replace the current Monara logo with the current government’s unofficial logo, the lotus. What actually happening is replacing the SriLankan uniform with Mihin Lanka’s uniform. This has received some well heated up criticism from the company’s employees.

A few dollar million loss is natural in airline industry and a $100 million loss is not rare either. But a $100 million loss for an airline of SriLankan’s scale – with just two owned aircraft and a fleet of 12 aircraft – is completely unacceptable.

What Will Happen ?

If the current course continues in this pace, SriLankan will soon run out of cash and will go under. The SriLankan government is in a cash strapped position and will not be able to bail SriLankan out. Emirates certainly will not spend a single cent to help SriLankan run a few extra days. The market is competitive and to stay afloat SriLankan needs to compete.

What Could be Done ?

SriLankan is an airline that is now 30 years old and in this time it has build quite a few strengths .

1. A Loyal and Captive Customer base
Thanks to an excellent service many customers tend to fly with SriLankan again and again and most SriLankans have a suprising loyalty at the airline.
2 . A Highly Trained Flight and Cabin Crew
SriLankan’s pilots are renowned to be the best of the class and SriLankan’s cabin crew has won a great reputation for their genuine smile – a factor that brought the airline many accolades including “The World’s Friendliest Cabin Crew” for many consecutive years.
3. Strong Other Businesses
a. Strong Technical Skills and MRO
SriLankan’s In-house engineering and maintenance unit is known to be highly skilled and has recently seen many new MRO contracts being handed from the likes of IndiGo and AirBlue.
b. Catering and Ground Handling
SriLankan has a profitable catering unit and it also is the sole airline catering provider at CMB. SriLankan is also the largest and dominant ground handler at CMB.
4. A Local Market Monopoly
Due to various political reasons, Sri Lanka has never allowed a single local player to enter the international passenger market and thankfully this has helped SriLankan to have a monopoly.
5. Low Labour Costs
Although SriLankan has a large workforce, being a third world country and one which has an extremely low wage rate, SriLankan enjoys substantially low labour costs. This will help SriLankan to have a very low ASK once they rightsize the workforce.

Strengths are Not Enough

Despite all these strengths and all the hard work that has been done to date, it is clear that SriLankan is not strong enough to weather the current storm. In this situation, SriLankan is in a much weaker position than many of its competitors.

SriLankan also experiences a lower yield on most of its routes due to a local market that has less business traffic ( although expected to significantly grow ) and a small premium cabin.

Losses keep mounting and SriLankan is not likely to recover from this downward spiral. This will totally cripple the company’s future and causes serious doubts on how long it will survive.

The Turnaround

To come back to life, SriLankan needs to embark on a serious turnaround programme. The actions will be no less than very tough. SriLankan’s mission needs to be stay profitable and to have a sustainable continuous profitability.

We shall take a look at how to solve the three aforementioned key issues.

1. Overstaffing

It is likely that any Government of Sri Lanka will not allow SriLankan to lay off any of its staff. However, there are certain actions SriLankan can take to overcome this issue.
i. Expanding the airline
SriLankan should expand its network and fleet to an extent that fits the current workforce. This does not mean SriLankan should expand its network fivefold, but instead to a reasonable extent. In contrast to what some may say and think, this is a perfect time for an airline like SriLankan to expand. How to do this will be discussed shortly.
ii. Expanding the MRO
SriLankan’s MRO has a great potential to become the South Asia’s leading MRO . There are a number of LCCs and full fare carriers in the region that will need heavy maintenance in the coming years and this will be an excellent business opportunity for SriLankan.
iii. Adjusting the staff of foreign offices
SriLankan will be able to save some expenditure through negotiating the contracts of the staff in foreign stations and some possible lay offs. This will not be as hard as laying off Sri Lanka based staff.
iv. Laying off expatriate pilots
SriLankan currently employs 35 expatriate pilots although there are enough local pilots available. This has turned into an on-going battle between the airlines’ Pilots Guild and the management. It would be worth replacing the expatriates with locals at least to some extent as locals need lesser wages and less extra expenditure such as accommodation.

2. Inefficient network

SriLankan needs to identify the key markets that it can profit from and create a niche for itself. Currently SriLankan is engaged in a battle to win a share of Europe to South Asia/ South East Asia traffic without having any competitive onboard product. To compensate it, the management is reducing its rates on long-haul routes. On one hand SriLankan simply cannot compete with the likes of Emirates and Qatar Airways in UL’s current situation, on the other hand reducing rates will only harm SriLankan’s yields further.
SriLankan needs to find its niche and focus on building its network on it. I would suggest SriLankan to relinquish its previous plan of becoming the leading airline to South Asia. SriLankan should avoid directly competing with the Middle Eastern carriers, but SriLankan has a direct advantage in many markets and will be able to effectively compete with these carriers and gain a considerable market share. As we discussed in the strengths of SriLankan, its excellent onboard service is a key reason for many passengers, specially Indians, to fly with them instead of the Mid Eastern carriers.
Apart from this SriLankan needs to rationalize its network and sort out the current mess in its European network.
As I have mentioned earlier, SriLankan will certainly not be able to make a profit from flying routes such as CMB-CDG-MXP-CMB, CMB-CDG-FCO-CMB, CMB-FRA-MXP-CMB. As opposed to this, SriLankan should consider a network similar to the following.
CMB-CDG-CMB 3 weekly
CMB-FRA-CMB 3 weekly
CMB-FCO-MXP-CMB 2 weekly

This will not cause any reduction in frequencies or available seats and is achievable from the current fleet.

SriLankan should also launch tactical targeted campaigns to drive increased sales on its current network.

SriLankan needs to consider utilizing its A320 fleet to the maximum and launch increased frequencies to its regional network. In my opinion, slashing a half of its Indian network was not something they should have done as these markets will play an important part in the feeder base.

An overhaul of the current pricing and revenue management streams and strategies will be required to drive increased performance from the current network.

SriLankan should also seriously consider re-negotiating some of its codeshare deals, such as the one with Malaysia Airlines ( MAS ) which incurs long connecting times on certain flights.

A more detailed take on how SriLankan’s network should be shaped could be found here .

3. Unnecessary expenditure

SriLankan should completely stop all of its political vanity expenses. These will be of no use to the airline and it would benefit all the nation, the government and of course the management if the management instead opts to bring profits through better and strict financial management.
In SriLankan’s current state it would also be essential to renegotiate certain key supplier contracts and enforce quick reductions in most budgeted expenses.

Fleet

Apart from these efforts, SriLankan should consider maximizing the revenue from its fleet.
SriLankan should consider upgrading its business class product and increase the number of business class seats by at least 50% on selected widebody aircraft. There certainly is enough demand for this and it will help SriLankan immensely to increase the yield.
Although SriLankan needs to replace its long-haul fleet by 2013-4, there doesn’t seem to be any strategy towards it currently. The best choice would be using either the Boeing 787 or Airbus A350 to replace both A330s and A340s. However, with SriLankan’s current financial situation, it would be better for them to wait for sometime before making a large order.
It should also be a consideration to stop offering Airbus A340 aircraft for President’s official travel. Although the President might need an official aircraft for overseas travel and SriLankan has a responsibility as the national career to do so, the national career’s own financial stability should become the first priority at this moment. Any good government will agree with it and if the President still needs an official aircraft, the airline can offer one of the less utilized A320s.
However it will be well worth the investment if SriLankan could lease an A321 and use it to regional high density destinations as this will not only free up widebodies for the long-haul network but also help the airline achieve the maximum out of increasing tourist arrivals to Sri Lanka.
You can read more on how should SriLankan’s future fleet be shaped, here

Apart from these, SriLankan should consider the following actions as quick measures to be taken

Most of all, SriLankan MUST take the best use of the golden opportunity in front of them – the end of war and increased tourist arrivals coupled with capacity cuts by competitors – and achieve its true potential and the airline’s success.

SriLankan already has many strengths, the most valuable of all an excellent, skilled workforce, and it will not be a hard task to bring it back on to the track.
The management has already done some good steps such as moving headquarters from the Colombo World Trade Center to the airport premises, which should be appreciated.
But they will need a complete business turnaround plan and put it into effect quickly and completely. Tough and fast decisions will be needed, but they will bring a good effect at the end. The government should fully support the airline in achieving its financial goals and avoid it becoming another Air India story. If all the parties take interest in the airline’s succes, it certainly won’t be a hard task.

The full steps needed to bring an airline back to life cannot be written in an article like this. But I hope this gives a brief idea on which changes should take place.

This is solely my opinion . What should be changed or added ? Please leave your comments.
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• SriLankan Airlines Status Update
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• Lost in Time : SriLankan Airlines

Network Contribution

Many South Asian communities live in North America and Australia in large numbers, but these regions still do not have any proper air links to South Asia. As I already pointed in the article on demand, the largest Sri Lankan community outside their motherland resides in Australia and the largest Pakistani and Indian communities live in U.K and North America respectively. But due to the lack of enough capacity and in many cases direct air links, most of these passengers connect at larger hubs such as Dubai and Singapore. If your airline is able to provide a good and cheaper connectivity to many city centres in North America or Australia, your airline will certainly have a great chance in getting a large number of connecting passengers. However, often due to undercapacity, many South Asians connect to many other destinations throughout the world via other airlines even if there are direct air services. Because of this your flights to and from South Asia will have a good number of connecting traffic and there will be a considerable contribution to the network from your South Asian flights. The whole connecting market to Europe is served by a handful of Middle Eastern carriers and there is enough space for a new player and still many underserved markets.

South Asia is the world’s most densely populated region and has the world’s fastest growing air travel market for the next 20 years.
South Asians value service, but it does not mean you need to provide a first class service in economy class as well. Customer service and treating them well are the most important.
Since South Asians value image more than the brand, your airline is better prefer to create a good brand image than just promoting your brand.
Biggest challenge that you will face will be regulations and protectionism, but these things are slowly progressing at getting better towards airlines.
The region still lacks connections from many global centres, specially from North America, and hence the region generates a lot of connecting traffic.
If you work hard and fly right, you will be able to grab a good portion of the South Asian market. It is not a market that is so easy to crack, or to compete, but it certainly is not hand if you do it right and the main focus of the South Asia 101 series was giving you tips on some best and right ways to crack the South Asia market.
By executing similar practices, many airlines have found success in this region and I wish you all the best !
I hope this article series was helpful to you. I intend to release this article series as a whitepaper depending on the demand. I am also available for consultation work.
If you wish to have the whitepaper and/or got any ideas , please leave a comment and let me know. Your feedback is highly appreciated. Thanks !Similar Posts:

• South Asia 101 : The Secrets for Flying Profitably to South Asia
• South Asia : The Secret of Great Airline Demand
• Challenges for Airlines entering South Asia
• South Asia : The Value of Service
• South Asia : The 6 Markets You Should Focus On

Marketing has a much bigger picture behind it. Innovative marketing means using your creativity to make something influential, and then using that influence to making money from your product.

The innovative marketing techniques that I am going to introduce today will help your airline bypass your competitors and generate great sales, as well this kind of marketing will also be very economical and never hurt your bottomline. It costs the same for bad advertising as much as for great advertising.

Before moving on to the techniques, let’s keep in mind the following rule of thumb -

Stress The Benefits .
Yes. Sell with benefits and not the features. Instead use those features to support the benefits.
Never try to overstress your customers by showing the features in your product, instead show them what is in those features for them – the benefits. Use those benefits and always strike directly to your customers’ emotional root .

How to extract that emotional root ?
For example, consider marketimg your new Economy Class seat with a 34″ pitch.

Feature : 34″ pitch

Why is it there : Providing a bigger legroom

What’s in it for them : Lets you travel in comfort

Emotional Root: ” Travel in comfort with our new economy class seat and avoid getting packed in an airline with a small legroom ”

The following two extra factors will help increase the visibility in your product and will also help you to achieve the true potential of these techniques

1. A Unique Selling Point
– Why should someone fly with your airline ?

2. Guarantee an Offer
– Customers need an assurance that they will not be compromised by selecting your airline. Be it lower fares, better safety or guaranteeing their guitar will not be broken – you need to assure them so as to why it is better to fly with you. FedEx started by guaranteeing ‘Overnight delivery’ and the price did not matter.

We will be focusing on two key methods of marketing here – media and word of mouth.

Here are the techniques of marketing that an airline should consider.

Internet

i. Social Media – Social Media includes blogs and social networks such as Facebook and Twitter.

a. Twitter – Twitter is one of the world’s fastest growing social networks and can be considered one of the key ‘free marketing’ grounds.
Create a Twitter profile for your airline and set someone to update that Twitter profile continuously. Be personal, helpful and open. Talk like a person instead of a company. When you have a great number of followers you will have one of the greatest weapons of ‘free marketing’ to sell any of your products. Keep in mind, the right balance on Twitter is 95% personal and 5% sales. The complete Twitter process and a complete marketing guide on achieving the best from Twitter can be found here .

b. Facebook – Facebook is currently the world’s largest social network and your marketing on Facebook needs to be more fan oriented. Create a Facebook Fan Page instead of a profile and have more direct viral marketing than being helpful. This will add to your brand value and help pitch your product as one that is with the community.

c. Blogs – Blogs are the oldest and the most popular method of social media. Am I going to tell you to start a blog ?
No. Instead start a Blogger Relations Program. This could be called Word of Mouth marketimg 2.0 .
Why is it ?
Every blog serves to a unique readership of its own – a tribe, or a fan club – and this readership tends to always believe in, and trust in, what their blogger tells to them.
A Blogger Relations Program involves gathering a set of bloggers in your niche ( in our case – consumer airline bloggers. Blogs like FlightBlogger will not work despite how great their content is because they are aviation enthusiasts and professionals focused ) sponsoring this community and in return, getting loyal, genuine reviews on your product published at their blog. Their genuine reviews will create great brand awareness of your airline among the readers and will make your airline the first choice for those readers. This process will cost minimal, but the returns will be invaluable.
Nokia Corporation, the world’s leading phone manufacturer, has been doing this excellently for a few years and the results are exceeding expectations.

ii. Regular Websites – Advertising in regular websites was the previous Web 1.0 trend and is a slowly dying kind. It will cost a lot in some cases, but just these eyeballs will not bring you a great revenue as many people are using adblockers nowadays and even the very few who see them click on them rarely. Hence do not advertise at a big website unless it is a really good deal. Instead try to advertise at some popular blogs or travel magazine websites which have a bigger readership from your local region, which will only cost a fraction of what you spend for a ‘big’ website.

Mobile Advertising

i. SMS Advertising
SMS, or Text Message, advertising is a truly up and coming advertising phenomenon that has a great success in generating sales. The success of totally advertising supported mobile networks, such as Blyk, is an excellent example to this.
There are two ways you can advertise via SMS
a. Creating a database of customers’ mobile numbers and using a third party service to message the customers
b. Messaging directly via the mobile network

Method ‘a’ has the advantage of targeting a selected user base, but collecting the numbers could be a little troublesome. If you opt use method ‘b’, select a service which will use your advertisement as a sponsorship instead of a direct sales attempt, which could otherwise result in your messages being considered as spam by the receivers. A good example is the service called Budget SMS offered by Sri Lankan mobile network Dialog. In this service, users can send SMS at half the cost of a regular SMS and your advert will be added to their messages. AirAsia used this service prior to their launch of services to Sri Lanka and I am sure this advertising method did a good contribution to the 40,000 seats that had been booked even before the launch of flights.
There is also a great advantage in Text Message marketing as there is less spam. A recent research found that only 10% of texts were spam, compared with 65% for email.
Whichever of the above SMS advertising methods you may use, always make sure to include a phone number or a web address in your message, which will act as a ‘Call of Action’ to the readers because phone numbers and web addresses can be directly accessed from the message in most modern phones.

ii. Mobile Web Advertising
You might remember that I wrote an article on the value of a mobile website to your airline, this is where it becomes most important.
Mobile web advertising is is placing advertisements in web pages built specifically for mobile devices. This type of advertising has a higher clickthrough rate because the size of the webpage is usually created to fit a mobile’s screen size and hence users will never miss your advert.
There are many companies that will do mobile web advertising for you such as AdMob, but Google also does have a mobile version of its popular AdWords service. Always direct the links to a mobile website of your own.
It is no wonder that a recent study by IAB-UK showed the UK mobile market has grown by an astonishing 99.2% year on year.

Standard Media

Standard Media – ie Press, Radio and Television still have a big user base, specially in developing countries. In order to achieve the maximum out of marketing your product on standard media, just follow these few simple rules

1. Advertise your product in the local language – The most of airline advertisements I’ve seen here in Sri Lanka are in English, but the reality is that most locals do not have a sound knowledge in English. By promoting your product in the local language, you will not miss out on this large ‘chunk’ of potential customers.

2. Respect the local culture – This is of specific importance when you’re serving Asian countries. Having a bad advertisement that might seem to conflict with the local culture could have a bad effect on your brand. Being a brand that respects the local culture will naturally earn the respect of the local community.

Family Specific Marketing
The best marketing that you can get is genuine, word of mouth marketing. We’re going to target various age groups of a family here. The basic principle I’ve used here is that a family will always travel together .
We will target two specific age groups for this kind of marketing.

i.Kids – Kids can have a great effect in a family’s decision making and if a child repeatedly asks his parents to travel on a certain airline, the parents will rarely refuse. So how to do marketing for kids ? Simple. Offer them ‘toys’ they would like. This toys can range from some aircraft stickers to lunch boxes to small model planes. You can also ask your crew to pay a little special care and love for kids. The loyalty that you get from young travellers will last long as we all tend to be loyal to characters and products we fall in love when we’re small.

ii. Elders – The other influential age group in a family is the elders. They always tend to travel with people who respect and value them. If you can offer these elderly travellers with some extra care and make them feel special – you can have a group of passengers who will always prefer to travel you and do a great job in spreading that word of mouth among similar age groups. The most rewarding part is they will always prefer to travel with you even if their family travels with a different airline.

Finally,
Keep it Simple

Make your complete marketing procedure simple. Simplify your products so that your customers will never be confused. Simplify your advertisements so that your customers will clearly understand the call to action. Simplification is the next cornerstone of effective marketing.

When you successfully follow the above marketing techniques, you will transform your brand’s image into a respected and close-to-heart entity in your customers’ hearts . It will help you achieve a great number of loyal passengers, so much so that you will not need a frequent flier programme to tie up your customers. The tactics are also really very economical as I promised early on .
They might seem simple, but they are yet so powerful. Good marketing is about making a good relationship.

This is the fourth installment in an article series called South Asia 101, a tutorial series on how to achieve successful airline operations in South Asia. Today’s article was written in a more global manner since these tips really apply to a global audience and can be effectively used in any market, by any kind of airline, be it legacy or low fare.

P.S : The above article has been solely compiled from my mobile phone. I would really appreciate to hear your feedback. Since I am still learning, I would really appreciate to learn my mistakes too. Please feel free to leave a comment. You can contact me hereSimilar Posts:

• How to use Twitter to Grow Your Airline’s Sales – Miyuru’s Guide
• South Asia : The Value of Service
• 7 Tips for Great Airline Website Design
• Free Advanced Twitter Mobile Mirror for professionals from AIR
• How To Create a Great Airline Website

Imagine there are two taxi drivers in your neighbourhood.
One has a brand new car, with very comfortable seats and offers the service at a moderate price. But he always hesitates to stop for a few extra minutes till you get ready and even when he rarely does, he would ask you for a few more dollars.
The other one has a good car, but it is neither new nor comfortable as much as the first one’s. His rates are also equal to the first one. But he is really easy going and never forgets to relate a funny old experience of him while driving. Whenever you have a few large bags to carry, he always carries them himself from your home to the car and never lets you have the hassle. He never minds waiting a few extra minutes for you and never asks any extra money for it.

Which one will you prefer to travel with ? Undoubtedly, the second one. Why ? Because his service is excellent. This same theory can be applied to airlines – you only need to replace the car with an aircraft.

This is key when you’re flying into South Asia. Because South Asians value service a lot more than anyone else. But unfortunately, some airlines appear to have misunderstood service as in-flight services.

In-Flight Service is an important part, to which I will agree hands down. But, if you have a Service that beats your ( and other airlines’ ) In-Flight Product, this will be your winning niche and a Unique Selling Point. It is the prime Value of your airline. And it can highly increase the Value of Service Offering, which is your In-Flight Product, even if you have a not-so-great product.

What can you do to increase the Value of your airline ?

Be Personal

Treat your customers as to friends – not ‘plain customers’ both on ground and in flight. A simple smile can change the total perspective. This makes a big difference. Always be human and never forget that you are in a service industry. Read this excellent work by Southwest in ‘being personal’ at FlyingWithFish .

Find Your Niche

Find your airline’s unique selling point and do not be just another me-too. This makes your customers find a unique value in your airline and it will keep them loyal to your airline. This is why Southwest leads when JetAmerica got bankrupt even before launch of operations. I will be covering this in more specific detail in the ‘Marketing’ section of this series.

Advertise the Reality

This does not mean you should stop promoting what you have on offer – but you will have to be realistic. You will get no benefit by over-promoting and under-delivering. Instead, under-promise and over-deliver. It really works and will make your customers love your airline for a long time.

Provide Options

Not all the South Asians are same. They come from different backgrounds and different economy levels. If you can provide Options to suit any of them – you will have a great value in service offering.
Price and fare segmentation is something that will work well in South Asia due to the varied economy scales of South Asian.
This is why I specifically mentioned Premium Economy in the last part of this series.
Premium Economy can become a phenomenon in South Asia, because..

The above steps might appear simple and basic. But they are not. There is a big value in them. Because, there is a real value in passengers who will come to fly with you again.

Expect my next installment of the South Asia 101 series on Airline Marketing for South Asia.

This is the third installment of the South Asia 101 series, you may find the full table of contents here .Similar Posts:

• South Asia : The Secret of Great Airline Demand
• The Big Picture of the South Asian airline market
• South Asia 101 : The Secrets for Flying Profitably to South Asia
• Challenges for Airlines entering South Asia
• Etihad to go Cattle Class ?

Let’s have a little exploration about to where does a good demand exist from some South Asian airports. We’ll keep our research limited to a few markets for the clarity of this article.

Colombo ( CMB ) Sri Lanka
From Colombo, a good demand exists to London, the Middle East and Australia.
Currently SriLankan Airlines is the only carrier operating flights between London and Colombo. Flights to Middle East are on a rather competitive edge with SriLankan, Emirates and Qatar Airways all operating a large number of frequencies being second to none.
The demand to Australia is completely unmet. There exists a demand of around 35,000 seats to Melbourne from CMB. Which is even larger than the demand to Frankfurt or Milan from CMB and larger than the demand to both Paris and Rome together from CMB. To Sydney, there is a demand of around 18,000 seats. In fact, the largest community of Sri Lankans outside their motherland live in Melbourne.
The real reason for SriLankan in not operating to Australia is that the bilateral air service agreement requires four weekly flights to be in place at the beginning of services and that SriLankan does not have enough aircraft to facilitate this.
However, the demand certainly is there and there are many creative routes that could connect Australia and Sri Lanka such as
CMB-SYD-MEL-CMB
CMB-MLE-SYD-MLE-CMB
or even
LHR-CMB-SYD . All three of the above will have a good demand and the last one will be specially successful if you can get regulatory approval as both of these destination sectors have an excellent demand from Colombo.

Dhaka ( DAC ) Bangladesh

Dhaka has a very strong all year demand to the Middle East largely because Bangladesh being a Muslim nation and the large number of Bangladeshi employees working in the Middle East. However, like in Sri Lanka’s case there is a strong competition in the Middle East – Bangladesh market with more than six airlines vying for a larger market share, including but not limited to EK,QR and EY.
In particular to Europe – there is a strong year around demand to Rome, of around 30,000 seats. The national airline, Biman, operates to Europe, including Rome, with its fleet of DC10 aircraft and the lack of a good inflight product will make it easy for any foreign competitor to compete on these routes. There is also a good demand to Manchester and Milan.

Islamabad (ISB) and Lahore (LHE) Pakistan

The strongest demanding sector from ISB and LHR is Manchester.
The demand from both ISB and LHR to MAN is around 230,000 seats which is even bigger than the year around demand between MAN and New York.
Apart from this there is a big demand again into the Middle East.

Most of other markets have their own niche ‘key demand markets’, but most of the time these are destinations from either UK, Germany or Italy and clearly the above are a selected few from destinations that are still untapped to a great extent but have a great potential.

Freight Demand

Thanks to an export driven economy in most of these countries, there is a good freight demand to these South Asia countries. The key freight points can be identified as
Mumbai, Chennai, Colombo, Karachi and Dhaka .
The recession did not hurt these markets much badly as well. However, freight would be advisable to giving a try only if you have a good hub network or serve any good export/import market.

Stimulating the Demand

There is a lot that can be done to highly increase the demand from these markets but still only a few airlines appear to be doing so.

1. Encourage them to fly
It may seem simple, but there’s a big meaning behind it. People do not just fly – or to be precise, fly with you. You have to make them fly. This is what AirAsia has been doing for years and they have reaped great harvests from it. But you really do not need to lower your price to encourage them for flying, there are much easier, cost effective and profitable ways – I’ll be covering this more specifically in ‘Marketing’ section of this tutorial.

2. Show them the benefits of flying and guide them
Believe me, there are lots of people in South Asia who have enough money – but have never taken a flight. This is not because they have are not interested in travelling – they really love to. But they never had the guiding to fly. They do not know where to buy an air ticket or even where you can fly from your local airport. The key reason for this is that the existing airlines were never able to reach these prospective customers. But you can certainly overcome this by using simple and effective marketing tactis that reach them.
Most of these wealthy locals are less educated. Why not advertise in their local language ? It really works.

3. Fare Segmentation and Higher Yield
One very timely and very innovative solution to this is – Premium Economy .
Most South Asians are not comfortable enough to spend money on First class or Business class. But they really want better comfort too and I can safely assure you that Premium Economy is a phenomenon that will work extremely well in this part of the world.
Most of your South Asian passengers will never hesitate to pay a small premium for better benefits and specially, to personally show the others that they fly in a better class . But yet, there is only a handful of airlines that offer Premium Economy class to South Asia.
I will cover this section specifically in ‘Value, and Value of Service Offering’ part of this series.

4. Partner with a Local Outlet
Partnering with a popular local outlet and having your brand name printed on, their takeaway food packets, shop front door or even on the floor, really works. Airline brand awareness is really low in South Asia and when they are aware of you, they will come to you before trying anyone else.
This is a great way to have a more effective brand awareness cost effectively.

5. Offer a Bribe
This is a word that often goes with South Asia. But, relax. We’re talking about an ethical bribe and it’s nothing illegal.
The tactic of offering an incentive still works in South Asia.
But your ‘bribe’ must be differentiated according to the prospective customer group.

For example:
If you’re an airline flying from Katmandu to Dubai, your prospective customers would really appreciate a free coupon for shopping.
If you have more elderly couples flying with you, they would be really glad on a discount offer at a holiday resort.

If you can afford it, offer the little kids flying with you with some nice little ‘your-airline-branded’ toys or stickers. This will have a great and long lasting effect as this little ‘bribe’ is something that will reap you harvest for generations to come.
Just imagine this – you have a choice of three airlines to fly who offer almost the same fare. When you were travelling the same leg six months ago, Airline A offered your three year old son a paper airline model and some stickers last time you flew. Airline B and C offered him nothing and he traveled with you on a flight that had nothing to make him happy. When you are about to book the ticket online, your little one screams ‘Daddy I want to fly with A, I want to fly with A’. Which airline will you fly ?

As I mentioned above, there is a special ‘Marketing’ section for the South Asia 101 series and I will be revealing more niche and effective marketing tactics in it.

So forget not to Subscribe to the free article updates by email or RSS .

The next installment to theSouth Asia 101 series will be on Value and, the Value of Service Offering.

The photo of passengers boarding the wonderful AirAsia Oakland Raiders A340 was provided by Reuben Whitehouse .

Thank you for reading and stay tuned !Similar Posts:

• The Big Picture of the South Asian airline market
• South Asia 101 : The Secrets for Flying Profitably to South Asia
• South Asia : The Value of Service
• How to Make Colombo a hub like Singapore
• South Asia : The 6 Markets You Should Focus On

Let’s first have an introduction to the region of South Asia.

South Asia, is the southern region of the Asian continent, which is positioned between the Southwest Asia and the South East Asia and mainly comprises of the sub-Himalayan countries.

South Asia is home to well over a one fifth of the world population and is also the most populous region of the world.

South Asia mainly consists of Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka.

Air traffic within South Asia is expected to grow at an astonishing 8.7 percent annually over the next 20 years, a higher growth rate than any other air traffic market in the world, including China.

The region has been a popular attraction to tourists although it has been seeing conflicts for some time, which mainly composed of the Sri Lanka’s based terrorist group Tamil Tigers and Afghanistan based Taliban terrorists.
However Sri Lanka Armed Forces’ recent victory against the Tamil Tigers which ended a three decade old war and insecurity in the country has brought a considerable peace to the region and has limited the conflicts only to a part of Pakistan. This is expected to highly increase tourist arrivals not only to Sri Lanka but also the neighbouring states and the resulting economical stability will help increase the VFR, O&D traffic from these nations.

Boeing’s Current Market Outlook predicts that in 20 years time, Asia Pacific region, which includes South Asia, will achieve a 41% share of the world travel market, up from the current 32%.

The Market Outlook also predicts the following air traffic trends in the next 20 years

Europe – South Asia
– RPK to grow from 53.6b to 174.6b , at a 6.1% annual growth rate .

Middle East – South Asia
– RPK to grow from 58.2b to 188.1b, a 6.0% annual growth .

South East Asia – South Asia – RPK to grow from 22.2b to 100.9b, a 7.9% annual growth .

As I have mentioned earlier, air traffic within South Asia is to grow at an 8.7% annual rate, which will increase RPKs in the region from 44.2 to 236.4 in the next 20 years.

Let’s take a look at each of these South Asian countries seperately.

Bangladesh

Capital: Dhaka
GDP: $224.889b ( 48th )
Per capita: $1,389 ( 153rd )
Population: 162,221,000 ( 7th )
Major airports: Dhaka, Chittagong
National airline: Biman Bangladesh
Local international airlines: 3

Airport annual throughput:
Dhaka – 5m pax, 150,000t freight

Bhutan

Capital: Thimphu
GDP: $3.442b
Per capita: $5,238
Population: 697,000
Major airports: Thimphu – Paro
National airline: Drukair
Local international airlines: 1

Airport annual throughput:
Data N/A

Note: Bhutan is a kingdom, a constitutional democratic monarchy ( where the King acts as the head of state within the parameters of a constituion ). It is a landlocked nation, but is one of the most scenic in South Asia. However, the government is very cautious in exposing the nation and as a result, tourist arrivals into the country are highly restricted. The only airline is Drukair, which operates to regional destinations with two Airbus A318s, and the only airport is Thimphu – Paro which is accessible through restricted VFR approaches.

India

Capital: New Delhi
GDP: $3.288 trillion ( 12th )
Per capita: $2,762
Population: 1,198,003,000 ( 2nd )
Major airports: Mumbai, Delhi, Chennai, Bengaluru
National airline: Air India
Local international airlines: 5

Airport annual throughput:
Mumbai : 25m pax, 533,593t freight
Delhi : 23m pax, 432,961t freight
Chennai : 12m pax, 270,608t freight

The Maldives

Capital: Malé
GDP: $1.708b
Per capita: $4,950
Population: 309,000 ( 176th )
Major airports: Malé
National airline: Maldivian
Local international airlines: 1

Airport annual throughput:
Malé : approx 1.9m pax, 46,000t freight

Nepal

Capital: Kathmandu
GDP: $33.024b ( 115th )
Per capita: $1,183
Population: 29,331,000 ( 40th )
Major airports: Kathmandu
National airline: Nepal Airlines
Local international airlines: 1

Airport annual throughput:
Data N/A

Note: Nepal is the only other land locked South Asian nation, again with one of the most scenic environments and is currently the world’s youngest republic.

Pakistan

Capital: Islamabad
GDP: $439.558b ( 27th )
Per capita: $2,738
Population: 180,808,000 ( 6th )
Major airports: Karachi, Islamabad, Lahore
National airline: PIA Pakistan Airlines
Local international airlines: 3

Airport annual throughput:
Karachi: 6mn pax, approx 182,000t freight

Sri Lanka

Capital: Colombo – Sri Jaywardenapura Kotte
GDP: $92.018b ( 67th )
Per capita: $4,581
Population: 20,238,000 ( 53rd )
Major airports: Colombo – Bandaranaike
National airline: SriLankan Airlines
Local international airlines: 3

Airport annual throughput:
Colombo – Bandaranaike: 2.5m pax, 102,000t freight
Note: Sri Lanka, one of the most scenic South Asian countries with both hill side environments, and sunny beaches, has the highest per capita of all South Asian nations.

As the above facts reveal, most of these countries have a high population and a growing a economy – and most important of all, a growing air travel market.

There are also a large number of migrants from these countries that are living abroad and a large number of expatriates from these countries who are working abroad. This makes operations into these countries heavy on not just O&D traffic, but also in connecting traffic. The tourist appeal into these countries will stimulate that traffic further.

There are 7 countries here – so what is the exemption ? Bhutan. Because there are only eight pilots in the whole world who are certified to operate into VFR. And any passengers who would want to fly to Bhutan will connect from your flights to India and Bangladesh. All the six other markets offer excellent market opportunities.

This is why airlines like Emirates, Qatar Airways and Singapore Airlines have banked on South Asia to make their operations successful and why airlines like Etihad and AirAsia are trying to bank on South Asia to make their operations even more successful.

Not just for the existing and established operators, but also for the new and future operators as well, South Asia is and will be a huge source of traffic and income . The advantages will not only be in the passenger front but also in the cargo front.

From here, I’ll be starting a series called “South Asia 101″. We’ll examine the core principles and elements that will help make your airline to have a successful operation in South Asia and how to make South Asian passengers fly with your airline.

In the next installment, I will be examining about the Demand for air travel in South Asia and how to stimulate it and make the passengers fly with you.

And if you still haven’t subscribed to our email updates, make sure you do, so you won’t miss out on the series.

Meanwhile, if you wondered, how I managed to post all the facts of Boeing’s Current Market Outlook while not having a computer, simply, I have the CMO pdf in my phone, always.

The wonderful photo of the KLM MD-11 and 747 is by Tim De Groot .Similar Posts:

• Challenges for Airlines entering South Asia
• South Asia 101 : The Secrets for Flying Profitably to South Asia
• Why Should Sri Lanka abolish Weerawila and Develop Trinco and Jaffna airports instead
• The Big Picture of the South Asian airline market
• How to Make Colombo a hub like Singapore

The Airport

Colombo Bandaranaike International Airport ( CMB/VCBI ) is the only international airport in Sri Lanka with a single 3350m long runway and a passenger terminal with a capacity of a little over 3mn passengers annually. Being a part of traditional sea trade roads, and being one of the most popular tea and clothing exporters, it also has a sizeable amount of cargo activity making it one of the top 100 international cargo airports.
The airport is home to three airlines – SriLankan Airlines ( UL ); the national carrier, Mihin Lanka ( MJ ); a state owned low fare carrier, and Expo Air ( 8D ); an all cargo operator.
Two main traffic banks can be identified in the airport’s daily operations. The first is from 6-8 am, with a number of arrivals of Middle Eastern carriers and the complete South and South East Asian departure bank of SriLankan Airlines. This is the highest peak of the airport’s daily operations with no less than 30 movements and most of them with widebodies.
The next bank of traffic comes into effect from 2-4pm with many flights of airlines from India and all of SriLankan Airlines’ Middle Eastern departures. Mixing into this flow are the second daily flight of Qatar Airways and Emirates’ DXB-CMB-SIN flight.
There is also a good number of movements at midnight, with all the redeye flights of South East Asian airlines such as Singapore Airlines, Malaysia Airlines, Thai Airways and Cathay Pacific – all of which are again widebodies.
The most active carrier at the airport is SriLankan Airlines, which operates an all Airbus fleet of A320s, A330-200s and A340-300s to 44 destinations in Europe, Middle East, South Asia and South East Asia.
The next most active carrier at the airport is, unsusppisingly, Emirates, with a total of 18 weekly flights, all of which are operated by Boeing 777-300ERs. This is closely followed by Qatar Airways with 14 weekly flights and plans for a third daily flight pending regulatory approval.

On the cargo front, the most active carrier is Expo Air with its fleet of Western and Russian freighters and some of the other cargo operators to the airport include Midex Airlines, China Airlines, MASkargo and Etihad Crystal Cargo. The airport also has three cargo villages with sizeable warehouses .
Landing and parking fees are not the lowest of the region, but also not the highest. The landing fee is $4 per thousand kilograms and parking fees are free for the first three hours. Air bridge charges begin at $75, but airlines can also opt to use a different apron and transport passengers via buses to the terminal.

What is in a hub ?

Sri Lanka is situated just below India and it certainly is no mistake to call it as being in the middle of global cross roads. It is the middle point whether you consider flying from Johannesburg to Tokyo, London to Sydney or Dubai to Singapore.
Sri Lanka is also the home to the M3 air corridor which is one of the largest air corridors of the region and the country also has many major connecting points of main airways such as G465, A463, P570 and B340 in its airspace which makes Colombo a favourite transit stop to long haul flights.
Colombo also has a catchment area of around 1.5bn population within three hours of flying time .
These reasons makes Colombo an interesting transit point.

However, it is not realistic for Colombo to plan of grabbing a share of the Kangaroo route as this route is tightly held up to a large by Emirates and Singapore Airlines at their respective hubs. -
But there are many markets that Colombo can tap which are still largely untapped.
Africa and Australia will play a large part in Colombo’s potential transit market.

India – Australia
Currently the sole air link between India and Australia is Qantas’ flights between Sydney and Mumbai. But this certainly is an underserved market and most of the time travelers between Australia and India transit at either Singapore, Kuala Lampur or Bangkok adding a few more hundreds of miles to their trip. This is where Colombo becomes a great option. It is an uncongested airport and also a direct route to India.

Australia – East Africa
East Africa is a popular holiday destination not just for Australians, but many other global travelers. But there is currently not a single air link between East Africa and Australia. Passengers will always have to take the long route and connect at Dubai, Singapore or occasionally, Johannesburg. Why not Colombo ?

Far East – East Africa
Ethiopian Airlines and Kenya Airways offer some flights from Beijing, Guangzhou and Bangkok to their respective hubs. But there is still a large share of the market untapped and being directly in the middle of this route, Colombo can certainly offer a good connection.

But none of these markets are the most lucrative. That is..
Rest of the World – South Asia
Many South Asians reside in countries such as UK, Australia and the USA. Few good examples are Sri Lanka having the largest Sri Lankan communtity outside its home country in Melbourne and India having very sizeable Indian communties in Manchester, London and the USA. But most of the time, sufficient air services are not available and most of the passengers transit at larger hubs such as Dubai and Singapore. With its strategic location and close proximity to anywhere in South Asia ( with both Kabul and Dhaka – the farthest corners of the subcontinent – less than 3 hrs away ), Colombo can certainly become the gateway to South Asia.

Another added advantage is Sri Lanka’s popularity as a holiday destination, which will greatly enhance Colombo as a destination and will also make it a first choice for stopover packages.

The Reality
However, the reality is that the national carrier SriLankan is not financially sound enough to spoil Colombo’s strategic location as a hub. Being pressured by the largest loss in its history and having no investor to bail it out, SriLankan is not in a position to expand and make Colombo the gateway to South Asia.

This makes Colombo an interesting hub for one airline in the region – AirAsia .
I personally do not see any other airline that can exploit Colombo’s potential as a hub, to the maximum as much as AirAsia.
Although AirAsia X has already chosen Abu Dhabi to be its next hub, Colombo certainly has even greater potential than Abu Dhabi with some ‘fine tuning’.
Colombo can become an excellent entry point for AirAsia to India and the rest of South Asia, while AirAsia X can restlessly feed passengers from all over the world into Colombo for connecting on AirAsia.
The A330-300s that AirAsia X has on order can easily fly up to Sydney, Johannesburg, Beijing or Rome from Colombo without compromising on the payload and needless to say tourist traffic to Sri Lanka will certainly fill a third of the flight.
None of the region’s local airlines can match either the fares or the unit cost of AirAsia and it will certainly be a success story for AirAsia.
But like I mentioned earlier, this will need some fine tuning. And this fine tuning will be none other than a Low Cost Terminal and lower airport charges. And this fine tuning certainly will easily become a reality if AirAsia can educate the government on how beneficial a Low Cost Terminal is to the country and how it can also help government’s LCC Mihin Lanka.
It is a long way to go, but is for sure doable.
What do you think ? Please leave a comment.

All the photos on this article are extracted from Flickr and are fully copyright reserved to their original authors.Similar Posts:

• South Asia : The 6 Markets You Should Focus On
• South Asia : The Secret of Great Airline Demand
• Etihad Airways to resume Colombo flights
• AirAsia to Launch Sri Lanka Soon !
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