Economic crisis,need to generate foreign currency income and US$ 175 million sovereign bond default like the sword of Damocles hanging over the head in a thread over which the state-owned SriLankan Airlines (SL) is restructuring and expanding its network to strong markets.
SriLankan Airlines is looking to expand its network to parts of Asia-Pacific and Europe, as it makes progress on reducing financial losses under its turnaround plan.
These countries such as Australia, and China. India remains the flag-carrier’s largest market, though flights have been reduced from 125 to 90 each week.
With negligible domestic business, the airline is aggressively tapping the Indian market to fly via Sri Lanka to international destinations Dimuthu Tennakoon, SL’s head of worldwide sales and distribution, disclosed.
“Around 55 to 65 percent of our flights [in Airbus A330-300s] to Sydney with three dailies and a daily to Melbourne comprise passengers from Bangalore, Hyderabad, Delhi, Mumbai, and several secondary Indian cities,”he said.
SL flies to nine destinations in India, which before the pandemic accounted for around 15 percent of revenues, and plans to add three more soon.
It carries significant numbers of passengers to Middle Eastern countries from South India as its fares have been competitive with those of Indian and Gulf carriers. Many of the people on these flights are migrant workers in locations including Qatar and the UAE.
“The demand from India is so strong and growing,” said Tennakoon, as the airline continues to consolidate routes. In its quest for restructuring,
SL released a request for proposal for five A320 narrowbodies and five A330s on a six-year dry lease. The bids, which were opened on February 7 and are now under discussion, could add significantly to the present fleet strength of 17 aircraft.
Last year, Sri Lankan President Ranil Wickremesinghe, who was then Prime Minister, called for partial privatization of SL and the need for restructuring as it faces payment obligations to suppliers.
It has now been almost 15 years since the Sri Lankan government reacquired all the shares in SL from Emirates, which had partially purchased the carrier in 1998.
In August, the government said it would sell a 49 percent stake in its catering and ground-handling business units. The State-Owned Enterprises Restructuring Unit is currently working on recommendations for the cabinet.
Now, as China reopens its borders, SL is to restart operations in the first week of April with tri-weekly services to Shanghai, Beijing, and Guangzhou. It has also begun offering international flights to Paris; Frankfurt, Germany; Kathmandu, Nepal; and Seoul, Korea.