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Wednesday, 7 March 2012

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SriLankan on strategic plan for profitability



CEO Kapila Chandrasena

SriLankan Airline while playing the important role as the national career and supporting the national economy will embark on a pathway to enhance both top line and bottom line in keeping with its five year strategic plan. “We see a huge growth opportunity in Asia. All market indications by International Air Transport Association (AITA) point out Asia being the future in the aviation industry. We are well placed to exploit the emerging opportunities,” SriLankan Airlines Chief Executive Officer Kapila Chandrasena told Daily News Business.

“There is a strong co-relation between growth in population and gross national income. Our neighbouring countries China, India and Indonesia are in the growth phase of this circle. Our business plan is to target these countries to realize country’s aspirations,” he said.

The rapid fleet modernization efforts and to increase the fleet from 14 to 23 aircraft under the five year plan which at present stands at 21 will support rebuilding efforts. The additions will be of brand new or near new aircraft which gives the leverage in replacing old fleet. Two more will join within next month.

With the expanding fleet airline will also focus on network expansion where there are future opportunities concentrating on direct connectivity.

“Our strong focus will be on Asian countries especially China, India, Indonesia and Far East Asia. The efforts to achieve 2.5 million tourists will supplement our business drive. We are looking at strengthening the number of flights and destinations. However, due to economic slow down in Europe measures will be taken to scale-down operations to minimizing losses,” he said.

SriLankan Airlines has taken many initiatives despite testing times and where profitability is concern we are moving on with our plan. It is making a loss mainly due to the fuel crisis which is not limited to the aviation industry. There had been a 30 to 40 percent increase in aviation jet fuel where fuel cost accounts for 50 percent of the operational cost.

“As a nation we are still not oil rich and we depend on imports resulting in relatively high losses. We will take possible measures to minimize the impact. Modernizing the fleet to have twin engine aircraft will be a key step in this direction where it give fuel burning saving of 15 to 20 percent.We have shift our focus from bottom line only approach to two facet top and bottom line approach. We will progressively track the movements and take necessary action as per business plan. The recent upgrading will boost the income from the front cabin as the total product on offer will given a new look in an enhanced cabin ambience.

“The destinations and frequency will be depended on a stringent selective process. While the key focus will be on Asia including India to expand we also will reduce capacity to Europe especially London operations will be streamlined,” he said.

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