The national carrier has been going through turbulent weather due to escalating oil prices that has resulted in an unexpected increase in its operating cost by US$30 million in the past three months alone, SriLankan Airlines CEO Manoj Gunawardene said on Thursday.
Speaking with journalists onboard the new aircraft A320-200 at the BIA, Mr. Gunawardene said while the financial status and outlook of the organization remained stable the last quarter had proved to be “difficult” due to violent fuel price fluctuations.
It was pointed out that oil prices fluctuated from US$95 per barrel to US$125 per barrel thereby immediately adding US$10 million each month from January.
He noted that this distorted the airline’s “good performance” adding that once fuel prices settle or goes down it will be predictable.
The industry is apt to get affected when “violent” fluctuations occur but noted that SriLankan Airlines was not impacted much as since April, the airline imposed a fuel surcharge and right now oil prices are going down.
However, he noted they expected a better year going forward than the previous year as 2011 is the year of expansions.
Regional dominance
Focusing on its priorities the airline will be engaged in providing its customers with the most modern passenger services, Mr. Gunawardene said.
This (new) narrow body aircraft will be used on medium and short haul flights with its current priority being Delhi and Mumbai destinations, the CEO explained.
Mr. Gunawardene pointed out that once the full complement was available they would then use this aircraft within the South East Asian region in Kuala Lumpur, Singapore and the Middle East.
“We have a strong regional presence,” he noted adding that with the augmentation of the A320-200 aircrafts they hope to re-establish and dominate the SriLankan Airlines’ presence in the regional skies.
Currently the airline carries 3 million passengers per annum and in the medium term plans are to double this capacity by 2015.
He noted that currently they were running on a healthy load factor and with the acquisition of increased aircraft and the fleet moving upto 30 both wide and narrow body aircraft will be used on the destinations that is hoped to be increased from 45-50.This winter the airline will be hoping to enter another market in the Europe although the name of the city was under wraps.
Commenting on their priority based destinations, Mr. Gunawardene explained that first they would concentrate on destinations from where they could increasingly generate tourists, next destinations where a large number of expatriate Sri Lankans reside and connectivity within the emerging economies of Russia, India and China.
Marketing the airline
As part of the marketing concepts, the airline is currently seeing a change in its business model with priority given to ensure the product is upto date.
In this respect, it has been identified that the national carrier requires brand presence and brand recognition, he said.
He noted that when the need is there to anticipate for a high growth to get Boeing flights on larger aircraft these could be considered.
The airline also plans on replacing all its A340 aircraft by 2015, Mr. Gunawardene said adding however, that they were yet to decide as to what types of aircraft will join this fleet. The airline is yet to consider going in for a Boeing aircraft to join its fleet.
Sri Lankan Airlines operates a fleet of 17 aircraft including wide-bodied A340-300 (5 aircraft) and A330-200 (5 aircraft) and mid-range A320-200 (6 aircraft) in addition to two De Havilland Twin Otter floatplanes. |
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