SriLankan Airlines has seen its network being reduced dramatically in recent times – but is this exactly the right thing to do ? Airline Industry Review finds out.
The exit of Emirates from SriLankan saw the Chief Executive post being transferred from Peter Hill to Manoj Gunewardena, who is the brother of Presidential Advisor Sajin Vaas that drove the LCC Mihin Lanka to bankruptcy. Manoj however is a 25 year veteran with the airline having served in many positions and his takeover of the CEO post was seen as a natural progression by many. The new CEO launched a refleeting exercise for the narrowbody fleet and embarked a turnaround project for the airline to make the core operations profitable.
SriLankan Airlines Group, which consists of the airline, ground handling and SriLankan Catering, has most of the time being profitable, the core airline operations has not always been so and I fully agree with the Mr. Manoj in his belief that the airline should break even on its own – but should this come at the cost of cutting operations ?
To make the said operation profitability a reality – SriLankan did one thing majorly – CUTTING . From fleet to frequencies to onboard service and ontime performance, all are now in a lower level than they were while under EK management, however the reports for the last quarter is not out yet.
Indian Operations
© Sean D Silva
While under Peter Hill’s management, the airline was the largest foreign carrier into India, operating in excess of 110 weekly flights to 11 destinations – it is now down to a mere 46 to 6 destinations. Some quote this as a result owing to the fleet renewal – but in my opinion, it is NOT. SriLankan’s A320 fleet is now down to three from the previous five, but the aircraft can be much more utilized and the current fleet is well enough to operate daily flights to two to three more destinations under a 2.5h flying time.
New Destinations
The new management has so far launched one new destination – since they took over on 1st April 2008 – Rome . But not really a new flight though. The airline now uses Rome as a tag on to its Paris route, but on a rather inefficient routing, as CMB-CDG-FCO .
But the number of cancelled destinations outnumbers this single new route launch.
Codeshares
Prior to ceasing of the management contract, Emirates was UL’s biggest codeshare partner with flights to more than a dozen destinations including the US and the ceasing of management contract saw the end to this codeshare deal too. To fill the gaps, SriLankan soon joined with Etihad, which is now one of SriLankan’s biggest codeshare partners.
However, UL was still lacking access to the US and Australia under the Etihad deal and to void this hole, it entered into a codeshare deal with Malaysia Airlines. The deal took a long time to be completed since UPS, the express freight service based in US, fully opposed this deal as they were once not allowed by Malaysia to operate flights to Subang (IIRC). After so many appeals, MAS and UL however finally were allowed and UL now codeshares on MAS’s heavily loss making KUL-TPE-LAX flight. But has this been successful ? Definitely not.
As opposed to quick connections at Dubai with EK, now UL’s passengers have to wait for 7-8 hours at Kuala Lampur in order to connect to MAS’s flights and inspite of direct flights to US, now they have to experience two stops, which is also not on a so comfortable 777-200ER.
Frequent Flyer Programme
Yet another thing that UL lost with EK’s departure was Skywards, the frequent flyer programme the two had built since late 1990s. To replace this, SriLankan created FlySmiLes, a programme with identical tiers but lesser benefits and you have to manually redeem points by providing your boarding pass – long gone are the days of automatic Skywards miles.
The customer response has been very poor, with only 3% of previous Skywards customers signing up.
When asked about this by a local newspaper sometime ago, the management had however responded that “It took Emirates years to make their frequent flyer programme popular”.
CUTS
The highlight of this article – CUTS.
Fleet : From 16 to 12
Freighter services : Fully suspended
Indian flights : From 110 weekly to 46 weekly
SIN flights : From 14 to 7
KUL flights : From 14 to 7
DXB flights : From 14 to 7
KWI flights : From 9 to 7
NRT flights : From 3 to 2
CDG flights : From 5 to 3, and coupled with FCO
TRV flights : From 14 to 7
BLR flights : From 7 to 4
Flights to CCJ, COK, HYD, GOI and GAY fully suspended.
Notice that most of these cuts took place well before the global decline in demand. Nevertheless, most other airlines have increased flights to Colombo, specially following the end of war. A good example is Emirates, where it now operates 18 weekly flights from DXB instead of the previous 8 or 9 weekly flights.
The solution
The point of this article however was not to personally attack on anybody at SriLankan, but instead to discuss what can be and should be improved. SriLankan has a superb workforce which has done some unbelievable stuff – back in 2001, when the Tamil Tiger terrorists destroyed a half of its fleet, the engineers repaired the attacked aircraft in a suprising three months – which Airbus had estimated to take at least nine months and the airline has been through some of the worst crisis of recent times including, but not limited to SARS, the 2004 Tsunami and terrorist attacks. So they truly have the power to overcome all these and succeed . What can be done to can be done to achieve this ?
This is what I propose.
* Taking advantage of the newly dawn peace in Sri Lanka, UL should expand again and reinstate Colombo as a major hub and a gateway to South Asia. Its strategic geographical location and second-to-none tourist attractions will help make this a reality.
Fleet overhaul
©Thomas Ernst
I would suggest UL to add 2 A330-200s, two A321-200s and two DHC 6 Twin Otter aircraft along with an A310 freighter. The A321s will be used for regional travel and the Twin Otters will be used to relaunch its highly popular domestic tourist flights. The favorable lease terms in the market right now will help reap the harvest of this essential investment.
The Business Class on certain A340s and A330s should be refurbished with the installation of 18 flat bed seats.
– SriLankan’s newly added narrowbodies should be good enough for a few more years and their widebody fleet ( of five A340s and four A330s ) should be replaced by either a mix of 787s or A350s, both of which have the capability to replace both A330 and A340 fleets. Since neither A350 nor 787 delivery slots are available till at least 2014, I believe that SriLankan should add more A330-200s to its fleet.
- One might argue that the A340s would be a better fit to SriLankan, but UL simply does not have that many routes to be used by an A340-500 or A340-600 and CMB’s runway is not lengthy enough to permit a fully laden A340-600 departure to LHR at noon hours too. Hence the only suitable aircraft would be A340-300. But since there simply is not much of a difference in terms of performance between A340-300 and A330-200 and because of a better resale value, the A330-200 emerges as the clear winner here.
Network
- I would suggest the following changes
LHR – up to twice daily from current 12 weekly
SIN & KUL – relaunch of the twice daily triangular flights
CDG – to be delinked from FCO. Two weekly flights to be operated nonstop with one going via MLE. To be operated solely by A330s.
FCO – to be relaunched as UL585/6 with twice weekly flights continuing onwards to MXP. One weekly flight to be operated as UL583/4 on a CMB-MLE-FCO-MLE routing.
PEK – to be increased to five weekly flights with two new flights going via MLE on a CMB-MLE-PEK-MLE-CMB routing.
KWI – to be increased from 7 to 9 weekly with addition of two new nonstop twice weekly flights.
BLR – to be increased from 4 weekly to daily using A321s and A320s.
BKK – to be increased from 7 to 9 weekly with UL424/5 evening flight on days 4 and 6 using A330s.
FRA – to be increased from 4 to 5 weekly flights.
New destinations to be launched
MAN ( Manchester ) – thrice weekly aboard A330s. The demand certainly is there.
SYD ( Sydney ) and MEL ( Melbourne ) – The largest Sri Lankan community outside Sri Lanka resides in Melbourne, but however the bilateral agreement between Sri Lanka and Australia calls for four weekly flights to be in place once an air service is launched between the two countries, since the yield to MEL cannot justify four weekly flights, the flights would be launched in the following manner.
UL678/9 CMB-SYD-CMB 0500-2000-2120-0330+1 1,4 332
UL666/7 CMB-MEL-SYD-CMB 0255-1730-1835-2000-2120-0330+1 2,6 332
All times local
HYD ( Hyderabad ) – Should be relaunched with four weekly A320 flights.
COK ( Cochin ) – Should be relaunched with four weekly A320 flights.
CGK ( Jakarta ) – Twice weekly A321 flights.
KTM ( Kathmandu ) – Thrice weekly A320 flights.
ISB ( Islamabad ) – Twice weekly A320 flights via BOM
ZRH ( Zurich ) – ZRH will be launched with initially twice weekly flights on CMB-MLE-ZRH-MLE-CMB route and once weekly nonstop CMB-ZRH-CMB using A330s.
MXP ( Milan ) – Twice weekly CMB-FCO-MXP-CMB as mentioned above.
SriLankan SkyChain Freighter network.
Although global freight market as a whole is not in a much good climate, the South Asian region appears to be less affected and thanks to CMB being a popular cargo port – UL will be able to make a sizeable presence on regional freight by capitalizing on these advantages. When the market returns to normal, these investments will reap back their harvest.
DXB ( Dubai ) – 2 weekly
TRV ( Trivandrum ) – weekly
MAA ( Chennai ) – 2 weekly
MLE ( Malé ) – 2 weekly
BKK ( Bangkok ) – 2 weekly
BLR ( Bangalore ) – weekly
SHJ ( Sharjah ) – weekly
Marketing
SriLankan needs to take its message to a wider audience and should make the best use of its website and social networks. They should also influence more Sri Lankans to fly by using innovative methods such as mobile advertising and enabling innovative methods to book flights – eg: using a bank centre.
The idea of this business plan is to make investment at the right time and to have become a leading player in the regional market by the time market recovers. This certainly can be done.
SriLankan already has a very high inflight service standard with a great crew which is sure set to make anyone want to fly again with them. But the above mentioned steps are not enough to make SriLankan a leader in the region again – the government shall stay away from the airline and let the management take independent decisions. They should not be afraid to try new things and should make the best use of CMB as a hub, although it is a long way to go – CMB certainly is a far better connecting point to South East Asia and Australia than DXB, AUH and DOH are.
Emirates sure did some good to SriLankan, but in many people’s belief – Emirates was benefited from the deal much more than tiny UL did. It is said that EK took away landing slots of UL at some major airports and it was a popular fact that they did not want UL to resume flights to Australia and some other destinations. It was also said that EK did not allow UL’s plan to purchase A321s for Indian routes. Now that SriLankan is free, they should nomore remain lost in time – SriLankan, now is the time for you to grow !
What do you think ?
Please leave a comment and let me know.
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SL should look at code-sharing with KQ if India allows SL to fly pax from southern Indian cities to Colombo to Nairobi then onwards to various African destinations.
Nairobi can feed traffic via Colombo to various Indian destinations.
KQ flies NBO-BOM but that requires connecting flights elsewhere.
It is a good idea, but I do not think it is economically viable. There simply is not much traffic between the sub-continent and Africa. However, KQ could have tried a route similar to NBO-MLE-CMB-NBO, but still it would not be a good yield. In the past, UL flew to Durban and Johannesburg .
Nicely written article. Displays time and effort to get the big picture and then drill down to specific solutions. In UL hires from outside the “political family” I strongly advocate they appoint you as a special consultant.
Great job and congrats.
Thanks a lot for your compliments Devesh ! But I do not think they will, ever.
KFLYER, Excellent Article. Welldone,
But I think there is no point for UL to operate CMB-KTM nonstop flight. Instead of that flight can be operate as CMB-KTM-PEK. BKK flights could be operated as CMB-BKK-HKG- 3 times and CMB-BKK – 4 times.
I would suggest the UL routes as below.
CMB-NRT———2 times -A333
CMB-MLE-NRT—–2 times -A333
CMB-KTM-PEK—–1 time -A333
CMB-YAN-PEK—–1 time -A333
CMB-BKK-PEK—–2 times -A333
CMB-BKK-HKG—–3 times -A333
CMB-BKK———4 times -A333
CMB-KUL———7 times -A333
CMB-KUL———4 times -A321
CMB-SIN———7 + 3 times -A333
CMB-SIN———2 times -A321
CMB-CGK-SYD—–2 times -A333
CMB-CGK———1 time -A321
CMB-MEL/SYD-CMB-2 times -A333
CMB-DAC———2 times -A321
CMB-DEL———7 times -A321
CMB-BOM———7 times -A321 (nbr of flights will be increased in the future)
CMB-HYD———4 times -A321
CMB-BLR———7 times -A321
CMB-MAA———7 + 7 times -A333
CMB-TRZ———7 times -A321
CMB-TRV———7 times -A321
CMB-COK———7 times -A321
COK-CCJ———7 times -A321
CMB-MLE———7 + 7 times -A333
CMB-MLE/GAN-CMB-1 time -A321
CMB-KHI———2 times -A321
CMB-MCT———3 times -A321
CMB-AUH———7 times -A321
CMB-DXB/KWI-CMB-5 times -A333
CMB-DXB———7 times -A321
CMB-KWI———2 times -A333
CMB-KWI———2 times -A321
CMB-BAH———3 times -A321
CMB-DOH———4 times -A321
CMB-DMM———3 times -A333
CMB-RUH———2 times -A333
CMB-JED———2 times -A333
CMB-LHR———7 + 7 times -B777
CMB-MLE-LHR—–2 times -A333
CMB-CDG———2 times -B777
CMB-CDG———2 times -A333
CMB-FRA———2 times -B777
CMB-FRA———2 times -A333
CMB-FCO/MXP-CMB-3 times -A333
CMB-ZRH-CMB—–3 times -A333
A321 – C/Y – 185 Seats -6
(Airline should use the full capacity of the seats)
A333 – C/Y – 313 Seats – 8
B773 – F/C/Y -353 Seats – 3 aircrafts
Only need 17 New aircrafts.
New Routes
CMB-NBO-JOH -2 times
CMB-MAN-YTZ – 3 times
CMB-BEY-AMS – 2 times
Help!! Airport codes: http://www.world-airport-codes.com/
Banuthev,
I appreciate your ideas, but
A KTM-PEK or YAN-PEK route simply does not have sufficient yield, nor UL at all has the relevant bilaterals.
Flights to Africa are the same.
A330-300 is not much useful in the current economic climate ( in contrast to what I’ve said earlier ) and moving to a different aircraft type involves a lot of investment. Hence the only suitable new addition is A321, which carries on the same systems as the A320s. Nor can an A330-300 fly nonstop from CMB to Europe.
I am sure UL would have loved it if they could start a fourth weekly NRT flight, but unfortunately, no slots are available. Zilch. Zap.
A route like FRA or CDG already have the possibility to go daily.
17 new aircraft are a daydream for an airline like UL, nor does it need 17 new aircraft for your plan. But the 5 aircraft I’ve suggested are feasible under current lease rates.
Second-hand Aircrafts should be fine to UL. I know airline like SQ, 9W .. already started to give the B777s on lease, hence decomissioned. UL could get 3 or 4 of B777s from them. I could understand getting A333 in this situation wouldnt that makes sence, therefore UL might get 4 more A332s.
Ok, UL may continue serving BKK-PEK 3 times. Alternatively for KTM, UL should be serving like CMB-DEL-KTM – 2 times. Still CMB-KTM – 3 times is not possible as of unsufficient yield.
185 seater A321s are the best option for UL instead of A320s. Glad to hear that atleast GOSL has got new A320s for UL. Now changes must need for the A340s as three of the A340s are serving since the Airlanka time.
If you don’t mind my saying – 777s simply do not fit UL. It involves a lot of cost to switch to a different aircraft type and to train the crew and other employees. But a 777-200LRF would be worth the investment for UL. This is the perfect freighter for an airline of UL’s size.
[...] take any responsibility if SriLankan opts to change the plan. Not sure if they read my article on how to take SriLankan to next level yesterday , but it is always nice to see SriLankan [...]
Miyuru @18yrs writes mature articles like this about aviation? Unbelievable for a veteran like me and would give the shivers down some management types currently at UL as to what you would do at 35yrs! Great stuff, whatever your age keep up this great stuff as our managers could learn from you mate, no jokes because I know something about the current setup there and do not see any progress with that bunch. Sorry but it true as many would know but would not openly declare.
The suggestion for domestic ops using Twin Otters is super. May I suggest reviving the float ops and giving todays travelers a complete package as a bonus instead of free hotel accommodation that’s been thrown in today? What better way to introduce Sri Lanka to a foreign or local traveler? A domestic/Float ops would revive local travel and also give the excess SLAF pilots of today a very good career opportunity too. No one knows Sri Lanka from the air better than those blokes.
Getting more aircraft in todays cheaper market is another good suggestion. We should ‘march on’ in this climate than retract to the shell as Sri Lankan had done lately.
Flying appu, thanks for your compliments. Twin Otter of course, can be used as a floatplane. However, I do not think the sightseeing feature as a bonus would be profitable at all since this involves a lot of cost than offering a hotel stay. In every consequences, the best would be to offer optimum connections so you need to offer free stays at all. I strongly agree that UL should get new aircraft – hands down, but if I’m not mistaken, they seriously need a powerful investor. Feel free to forward this to anyone at SriLankan if you like.
Its better that UL’s 7 of the 12 aircrafts are new.
UL must need to replace at least 3 of the A343s because they are in service since Air Lanka time. Notsure if the remaining 2 x A343s needs to be replaced as they joined in the fleet in 2000 & 2002. However, two of those must need to be replaced once the oldest fleet replaced.
Banuthev, in my opinion, UL does not need to replace any of the A340s. Because, the A340 is an aging type and can be replaced by either A350 or 787 in the future. And, the three lovely birds 4R-ADA, ADB and ADC (msn 32, 33 and 34 respectively ) are the first three A340s of Asia ever – so it hurts a bit to let go of them. They are the true flagships. UL already had 6 A330s which were brand new and all circa 2000, two of which were destroyed by the L.T.T.E and EK had to buy the remaining three that were on order ( one was already pending to be registered 4R-ALG ). I believe that if UL is to add widebodies, it should be A330-200s as they will have a better resale value.
That is really touchy when we get rid of 3 of those A340s. UL may use those until they introduce the A350..B787.. May be even after A350, b787 have been introduced our A340s may can be used for routes like DXB, SIN…
I have just checked the price of B787 and B777. I couldnt believe B787-9 (from $194.0) is cheaper than B777-3 (from $257.0)
I have to accept as UL better wait until B787…
You shouldn’t be suprised. 787-9 seats around 300 in a 2 class configuration with a MTOW of 245000kg, while 777-300ER will seat around 410 in a 2 class config with a MTOW of 352000kg.
a splendid article…
the problem with the 320 operation is that they are short of captains but excess of first officers.
dont forget that these same pilots are also used to operate for the mihin lanka operation. mihin has started expanding and now operate to four destinations including bodhgaya and varnasi.
with the shortage of captains and the temporary freezing of upgrades it will take some time for the 320 operation to expandand.
however this cannot be said for the wide body operation as the pilots are in excess.
its funny how at sri lankan we end uo being severly over staffed and in a matter of months severly understaffed.
once again an amazing article. keep it up.
Thanks. Of course I’d have liked more to see UL expand instead of Mihin. But why would Mihin want to fly to KWI, up to 7h ? And why can’t they turnaround by at least 45mins instead of 1h ?
the kuwait- dubai sector is one of the most profitable sectors for sri lankan. mihin has realised this is where the money is and basically wants to join in. its intresting to note that the mihin and ul dubai flights leave within alomst 30 min of each other.
im sure they will carry more passengers than ul since their fares are much lower.
unfortunately they should realise that either way we are both on the same side and there should be some understanding. its no use undercutting each other.
mihin has further plans of operating to bkk and maybe singapore.
as for the turn aroud time i agree with you that the time an acft spends on the ground is a waste. but sometimes even an one hour turnaround isnt enough. i remeber with EK a delay was a serious matter. how ever now it really a blame game. blame it on atc, immigration etc. i dont think the company cares much abt delays and punctuality. also it depends on the efficiency of the ground staff. lot of the senior guys gave left to greener pastures and the new guys arent really upto the task.
Yes, but for a serious LCC, it shouldn’t be an issue. MJ is behaving more as a legacy carrier than a LCC. They have to realise the difference. Have they at least now removed the Business class ? If I were the CEO, I however will never use it for sectors longer than 4h. I don’t think there yield justifies the cost for the KWI sector. They should have focused on India and other regionals. Why eat up to UL’s share ? Btw, which position are you holding at UL ? Feel free to contact me via email.
A good article, but where on earth would UL find the money to finance fleet expansion and business class refurbishments? I’m willing to bet any manager at UL would jump at the opportunity to do even one of the two, if it were financially possible. UL has three shareholders all of whom are quite happy to reap dividends, but not invest in the future.
I personally feel GOSL should try to get the EK shares and sell them to another airline that could be a strategic partner in the trans-atlantic routes. This would give the airline a cash injection to invest in the fleet, as well as provide a better network.
Expanding the network is required but going into a new destination, the airline would incur a loss for the first 12 months until the route is well and truly built. So the expansion isn’t as simple as adding fleet and then capacity.
Additionally, having lived in Africa, I can tell you that there IS a market to hub through to both India and China, provided it is marketed properly. Dubain and Johannesburg failed due to not building the Air Lanka brand in South Africa.
All in all, good article. I enjoyed the read.
I fully agree with you that UL seriously needs investment. EK wanted to invest, but the GoSL rejected it, and now the GoSL doesn’t have money for investment and EK does not want to invest too.
If UL thinks it can stay afloat by avoiding expansion, they soon will be limited to an airline of the level of Indian Airlines. Like I’ve often said, UL has a much bigger potential market that they can achieve. I personally believe that it is the only way to avoid the undercutting of some subsidied Middle Eastern carriers.
However, it should be noticed that UL does not need ANY new aircraft to increase frequencies to regional destinations – the current A320 utilization is at a very low level.
[...] using A330-200s or a thrice weekly CMB-FRA-MXP-CMB flight aboard A330-200s. Like I have always been pushing, they should have built a sizeable presence on the Europe – South Asia/ Australia traffic by [...]
[...] more detailed take on how SriLankan’s network should be shaped could be found here [...]
[...] Lost in Time : SriLankan Airlines [...]