to offer 'cheapest' tickets; mulls IPO in 3rd year
By Duruthu Edirimuni
HolidayAir Airways (Pvt) Limited, aiming to be Sri
Lanka's first low cost airline and awaiting approval from the Civil
Aviation Authority (CAA), will offer cheap tickets to lure travellers
and has ambitious plans for an IPO in the third year of operation.
Arjun Ruzaik, told The Sunday Times FT that the company's long-term
plans include going public. "It is fundamental in our business
plan and we will be seeking an IPO in our third year," he said,
adding the Colombo bourse is very healthy at the moment due to the
peace process, and going public is a great opportunity.
who is presently a Kenyan passport holder, said Bizone Ltd., a Nairobi
consortium running a poplar radio station in Kenya for Kenyan Indians
called East FM, and East African Safari Air, the second national
carrier for Kenya, will be investing in HolidayAir Airways.
are awaiting CAA approval on Delhi, Chennai, Bangalore, Cochin,
Trichy and Trivandrum initially," he said, adding other destinations
the airline plans to launch into include Abu Dhabi, Dubai, Male,
Singapore and Bangkok.
Director General, H.M.C. Nimalsiri said that he is optimistic the
airline's Air Operating Certificate (AOC) will be processed within
two months. "The HolidayAir team is very proactive, which will
make it easier," he added.
Ruzaik said the airline, presently in talks with five leasing companies
to lease five Boeing 737 aircraft, will be ready to fly in six months
after route approval is granted. "We are in talks with five
leasing companies; two in Ireland, two in Singapore and one in the
US," Ruzaik said, adding that it will cost US$ 12 million to
lease them. "If we decide to purchase the aircraft, which are
148 seaters, it will cost us US$ 50 million. Therefore we will take
the leasing route.,"
emphasised that HolidayAir aims to provide substantial savings on
the ticket prices compared to traditional airlines, while giving
only what the passengers need. "We will have nothing extra
such as complimentary giveaways and frequent flier programmes,"
basic concern of passengers is to get from point A to point B. They
will not need a toothbrush and other toilet accessories on a three
to four hour flight," he said, adding that HolidayAir wants
to provide low cost air travel in 'relative comfort' to people who
have never been on a flight.
said the airline hopes to capture a market between 20 to 25 percent
from traditional airlines, to all the destinations it flies within
a year. "We hope to create our own niche as well, because right
across the world, the entry of a low cost carrier generates a market
that has not travelled before," he said.
will not have posh offices with plush carpeting, because we don't
want to pass all these costs to the passengers," he said, adding
that their policy will be to sell tickets at the cheapest prices,
only through the Internet.
firm, keeping to its 'no frills' theory, will not have extra costs
such as Public Relations agencies to boost its image. "We will
not have a PR agency, but will be having a marketing team doing
essentially three jobs; PR, marketing and sales," he said.
said most airports the airline flies to will allow the first hour
absolutely free for ground handling. "We are quite comfortable
in turning around the aircraft in one hour," he said. "Where
possible we are looking to use secondary airports, so that our ground
handling costs will be cheaper," he added.
the company is in talks with SriLankan Airlines about their 'exorbitant'
ground handling charges. "I am literally fighting with them,"
he said, adding HolidayAir has submitted a proposal to SriLankan
Airlines, who will be taking it up at the Board level in the near
firmly believe that because Sri Lankan Airlines has had a monopoly
for so long, they have an undue advantage," he said, adding
that all other carriers using the Bandaranaike International Airport
complain of their 'horrendous' ground handling charges. "What
is it that SriLankan Airlines is doing different to other parts
of the world that they are charging so high? Are SriLankan Airlines
equipment made of gold?" he asked.
said that within 12 months everyone from the CEO to the tea boy
will be Sri Lankan, except for the captain and the first officers.
"We need a total of 30 first officers and 30 captains whom
Sri Lanka does not have," he said.
he said that at the end of four years, the company will be completely
Sri Lankan, because by then captains and first officers from Sri
Lanka will be trained. "We are hoping to train them in the
US, Hyderabad, Singapore or Dubai. "It may be a combination
of all these places or whichever place that gives us a decent contract,"