The aviation market is in deteriorating conditions and an airline cannot commit to any large scale expansions. But SriLankan’s ( IATA: UL ) long-haul network and fleet is in desperate need of an expansion since a long time and UL could use the current market conditions for its benefit .
Currently, UL’s fleet comprises of five Airbus A320s, four Airbus A330-200s and five Airbus A340-300s and the long haul network comprises of only five true long haul destinations, London, Paris, Frankfurt, Rome and Tokyo. However, you may add Beijing and Hong Kong to the list too.
Due to lack of aircraft, UL often uses its A340-300s on trunk routes to India and often to SIN and BAH, thus limiting the potential of its A340s to be used as true long haul aircraft and expanding its network.
In my opinion, currently the best choice for UL is to lease two to three A330-300s and to take out the A340s ( and occasionally A330-200s ) from regional routes in order to effectively use the freed up aircraft to increase frequencies to key destinations and to resume old destinations ( which UL was forced to terminate after the separatist L.T.T.E terrorists destroyed half of its fleet ) and also to expand into new destinations .
Why is the A330-300 the best ?
( US Airways A330-300 pictured )
Using A340-300s on short haul routes simply because of its capacity is a total waste of fuel and scarce resources. The A330-300 offers the same capacity and cargo load with unbeatable economics in its class. In short, the A330-300′s two engine economics bring in large scale cost savings to the airline.
Why so many cost savings ?
The A330-300 is an aircraft made specifically for short to medium haul high density routes and this is exactly what UL uses the A340-300 too. In a comparison between the A330-300 and A340-300, the A330-300 emerges as the clear leader with lower seat mile costs, better RPK and more fuel efficiency and more cost savings.
But that is not the strongest point, the A330-300 is currently in a recent time low of lease rates and since both the Boeing 787 and Airbus A350 programs are experiencing delays, there will be a better resale value for this aircraft as opposed to the A340-300 which is going to fade off soon. Since the lease rates of A330-300 and A340-300 are almost the same and as the A330-300 has a lower list price of around, $200m, this makes the A330-300 the best for UL.
And the current UL CEO, Manoj Gunawardena, being upbeat about fuel savings would make more sense to add the A330-300.
Conclusion
The world economics and the airline industry is expected to recover from the current downturn in sometime around 2010. SriLankan cannot simply sit by and see the world go by then. SriLankan would also need to expand and undoubtedly, markets like SYD have the potential to play a nice part in SriLankan’s bottomline. Although SriLankan’s current widebody fleet needs to be replaced in a few years time, this would not be the best time for it. So it is better to take some intermediate alternative measures for expansion and as described above, the A330-300 would simply be the best candidate for it. As SriLankan already flies the A330-200, there won’t be the burden of adding a new fleet type and the current pilots could also fly the A330-300 with Airbus the MFF program.
Adding the A330-300 would enable SriLankan to fly to the regional high density destinations such as MAA, BLR, CCJ, BAH, RUH, AUH, SIN and KUL much profitably and help expand the long haul network to far horizons with the freed up A340-300 fleet.
So that, this would not incur any additional costs to SriLankan and would truly be an investment for the future of SriLankan. It is something to go at for sure.
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8 Comments
correct, A333 is also the best aircraft option for UL. UL can mixed this range on any routes like LHR, TRZ (which is capable for widebody landings), DXB, DEL …
Not to LHR.. Lol. But of course to DXB,DMM,RUH,KWI,DOH,BKK,HKG,SIN,KUL,MLE and MAA this would be a perfect aircraft.
As the latest statistics of UL hits the papers today ( ‘Lakbima’), along with some corrupt practices being highlighted on ‘The Nation’, we see no future for this Airline anymore so there’s hardly any point in discussing expansion or re-fleeting plans. Sad but true.
If only GoSL had tackled the mess at UL the way they did act collectively and won against terrorism this could have been avoided – but let’s not forget that Sri Lankans have to have their backsides to the wall before they would start to react !
Truly it is. I think they will be in the red for the next fiscal as well. And you know what, EK does not have even a slight interest in UL. They did not participate to any board meeting since April 2008 and it is one reason why politics could play this much with the airline, but even if EK did it wouldn’t make a difference since GoSL has the board majority.
Whats the point of participating in a board meeting which you cant do anything ? Besides if they came to the meeting and brought up any real issues, their work permits will be revoked and sent back to Dubai.
Tim
I fully agree with you. It is the government’s usual way of doing things. No democracy. No freedom. It is why I have stopped writing about UL as well, because it might lead to arresting me.
However it is good to notice UL will utilize their fleet a bit more in Winter. But a route like CMB-CDG-MXP-CMB and the proposed CMB-CDG-ZRH-CMB can really not be recommended. Can they be ?
Miyuru, I would think that all flights to Italy should operate via MLE as that’s the attraction for the locals(Italians) and that’s the high spending market that UL should target, what do you think ?
During off peak seasons UL should perhaps consider combining FRA/CDG. Similarly ZRH too could be a combined flight during the said periods.
UL has a bigger problem with their structuring of ticket prices – their prices seems to ASCEND as the service and reliability DESCENDS. Inversely proportionate ! It is time that they realize that the LCC boys are taking big bites off their bums on many other sectors (eg. Indian sectors are down from 110 per week to about 46; KUL, SIN and many others too are reduced ). LCC has come to stay and with open skies, all under performing National Carriers are under threat.
RETHINK, INNOVATE, PERFORM OR DIE is the message that is loud and clear.
You are correct, there is a big market between Italy and Malé. But it is not a good idea at all to enter this market as it is already heavily crowded.
Combining flights is not good at all. Only exceptions would be FRA/ZRH and FCO/MXP. In all other cases it will incur too high operating costs and I do not think they will break even.
UL needs to set a business turnaround effort and do it right.