The SriLankan Airline revenue is growing and it is on track to be a billion dollar company this financial year, said Capt. Suren Ratwatte, Chief Executive Officer, SriLankan Airlines.
In an interview he states that their cost base has remained untrimmed over the years. “In a market where the yields remain poor, but fuel prices are rising, this is no longer tenable. Reducing our costs while maintaining our standards and not compromising on the product, is a huge challenge that we must all focus on.”
The focus for 2018 must be consolidation and transformation. “Our shareholder, the Government of Sri Lanka, has recognised the need for the airline to restructure, as the burden on the national economy will become unbearable unless losses are contained. To this end, the services of world-renowned consultant to assist the management in this task, has been secured.”
“The high lease costs of our fleet, is something the consultant will assist us in addressing.”
“The government is committed to solving the cost of capital and the interest cost of our debt. Reducing our corporate costs and transforming ourselves into a much leaner, fitter and more nimble airline, which can respond quickly to changing market forces, is a task we must accomplish ourselves. Once these issues are addressed, we will be in a position to start growing again and assert our role as a major player in the Indian Ocean arena,” he predicted.We started the year with a challenge that the airline had never faced before, the closure of the only runway at Colombo’ recalling the early year of 2017 he said the year started with Bandaranaike International Airport for much needed resurfacing.
“The 8-hour daily closure over 90 days meant that the airport had to accommodate 24 hours of operations in 16 hours.”
The greatest challenge of this was for SriLankan as it meant that we had to cancel a large number of flights, over 600 in the three-month period, in order to fit into the reduced operational period. Needless to say, this resulted in a major loss of revenue. It also brought about cost complexities, as we had high cost assets, aircraft & crew– being under-utilised due to the cancellations.”
The onus was on SriLankan’s Ground Services division – who had to ensure that not only our own, but also all other airlines’ flights were serviced and that they departed on time.
As a result of adequate pre-planning and proactive management, SriLankan was able to conduct a very smooth operation during this period, for itself and all airlines serving Colombo, with nearly 100% punctuality. “However, the reduction in operations resulted in a severe loss of revenue which marred what could have been a stellar financial year for us.”
The major achievement of the year was the validation of the “Colombo Hub” concept. As part of this strategy, SriLankan implemented one of the biggest expansions of its route network in recent years.
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