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Old June 24th, 2006, 05:06 AM   #21
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UL's gain is that it is an airline with great service and cheap fares, which make most of the Indian travelers want to transit via Colombo than pay much higher than for ex. for a direct, higher priced flight with British Airways.

Though in the future, SriLankan might have trouble getting passengers with the middle class growing rapidly and being able to afford direct flights
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Old November 27th, 2007, 06:02 PM   #22
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SriLankan Airlines aims for new deal with Emirates: official

NEW DELHI, Nov 27, 2007 (AFP) - SriLankan Airlines wants a new management contract to be signed soon with Dubai-owned Emirates, chief executive Peter Hill said Tuesday, forecasting a "tough" year for the island's carrier.

The Colombo government is holding another meeting on January 8 with Emirates to discuss the renewal of the 10-year management contract of SriLankan Airlines that runs out next March, an airline official said.

"The negotiations between the government and Emirates have been going on for 18 months. I would have liked to have seen them resolved by now," Hill told reporters in New Delhi.

The Sri Lankan national carrier, in which Emirates holds a 43.6 percent stake, needs a decision to push ahead with its business plans that include expanding its fleet to 30 aircraft by 2013 from the current 14, he said.

Hill was in the Indian capital to announce that SriLankan Airlines had become the first foreign carrier to operate 100 flights a week to India and hoped to boost that number to 150 in five years.

SriLankan Airlines entered into the strategic partnership with Emirates in 1998 in which the Colombo government retained a majority stake, but gave full power to Emirates to run the airline.

Media reports say the Sri Lankan government wants a bigger role in managing the carrier and that Emirates opposes such a move. The reports have also said that the government has complained the contract is "heavily tilted" financially in favour of Emirates, which has declared it is keen to have a new deal.

Hill declined to comment on the reports.

He said he expected the airline's profits this year would be better than in 2006-07. But he added it would still "be a tough year" for the airline with the escalation in Sri Lanka's ethnic separatist conflict deterring foreign tourists and fuel costs nearly one-third higher than initially expected.

As new tourist destinations open up, any country that suffers civil unrest is bound "not to be on the top of everybody's popularity list," said Hill.

SriLankan Airlines Group posted a post-tax profit of 862.18 million Sri Lankan rupees (7.8 million dollars) for the financial year to March 31, 2007, a drop of 50 percent from the previous year.

Hill said Emirates and Colombo were discussing a five-year contract as another 10-year contract would be too long in a fast-evolving aviation market.

Aviation experts say the two sides' codesharing and other links meant that dissolving the partnership would cause big headaches for both airlines.

"We (the airline management) don't get involved in the negotiations," Hill said, but added that "all our plans are based on a new deal being agreed."

The airline's fleet expansion was likely to involve a "50-50" mix of narrow-bodied and wide-bodied aircraft, he said.

The decade-long tie-up with Emirates had vastly improved the catering, punctuality and overall reputation of the Sri Lankan airline, Hill said.

"We have a new brand, a new level of service. We are now taken very seriously by all our competitors."
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Old November 28th, 2007, 06:34 AM   #23
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Sighs. Can't they see Emirates is hindering their expansion plans?

I think SriLankan should hop on the Kangaroo route bandwagon seriously. Then sell fares cheaply so Australian and SEAsian customers will fly...

Right now, it is unattractive to fly UL-->>EK, because I have to fly to Europe via Colombo and Dubai. It would be better to fly EK, via Dubai, or airlines that will give me nonstop service...
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Old December 22nd, 2007, 05:25 AM   #24
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Emirates in spat with Sri Lanka govt over airline management

COLOMBO, Dec 21, 2007 (AFP) - Dubai-based airline Emirates said Friday it was standing by the chief executive it had appointed to run Sri Lanka's national carrier, just days after the island revoked his work permit.

"Peter Hill will remain CEO of SriLankan until the contract expires in March 2008," Emirates, which owns 43.6 percent of the company and has the right to manage the airline for 10-years up to next March, said in a statement.

The Sri Lankan government on Wednesday withdrew Hill's work permit, but his visa was not withdrawn. Sri Lanka, which controls 51.05 percent of SriLankan Airlines, wants a bigger say in the running of the national carrier.

The 62-year-old British national is currently based in Colombo and has been the head of the national airline since 1999, after joining as its chief commercial officer in 1998.

His virtual expulsion from the airline was because he had failed to "look after the interests of the majority shareholder," the head of Sri Lanka's investment regulatory authority said this week.

The government is due to hold a meeting next month with Emirates to discuss plans to renew the management contract of SriLankan. Discussions have so far been inconclusive.
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Old November 29th, 2010, 06:55 PM   #25
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Turnaround for Sri Lankan Airlines
18 July 2010
Sunday Observer

Sri Lanka, July 18 -- The National carrier SriLankan Airlines became a total government owned venture from July 1. With the backdrop of the global economic crisis, air line businesses the world over still face a challenge. While the State mechanism is struggling to bring domestic transport institutions such as the CTB and CGR at least to break even level, how does the government run an airline business profitably?

In an exclusive interview with the Sunday Observer, Chairman of SriLankan Airlines and the budget airline Mihin Air, speaks of business plans that make these institutions competitive ventures.

Q. What were the objectives of buying back 43 percent of SriLankan Airlines the shares from Emirates?

A. In 1998 the Government of Sri Lanka sold 43 percent of SriLankan Airline shares to Emirates and also entered into a 10-year management contract, handing over the management of the national carrier to Emirates. After the management contract ended in 2008, the Government decided to manage the airline and since then SriLankan Airlines has had its own management.

However, we faced various issues in management, such as entering into contracts and underwriting agreements, because 43 percent of the shares were owned by Emirates. Therefore the Government decided to buy back the 43 percent shares from Emirates.

Q. Did you get the shares at a reasonable price?

A. Yes, we bought them back at a very reasonable price, after negotiation.

The shares were sold at US$73 million in 2008 and initially Emirates offered them at the same price. But after valuation of the shares the Government said that the maximum price that could be paid was US$ 55 million. After negotiating, we closed the deal at US$ 53 million.

Q. How do you look at the handing over of the management of SriLankan Airlines to one of its main competitors. Was this a reason for its losses in the recent past?

A. Emirates ran the business in its own way. I don't agree with the argument that says Emirates made money at our cost. Because the majority of the director board was ours.

Q. Do you think SriLankan Airlines can make profits?

A. Yes. We have confidence and we have a business plan that is linked to the overall Government development program. For instance, tourism is a key sector that the Government has targeted to develop, in the post war era.

Tourist arrivals are increasing and we see big prospects for the future. Our business plan is to cater to these new opportunities.

There are airlines that are successfully operated by governments. Malaysian Airline and Singapore Airline are government owned institutions and they earn profits.

Q. But in the past 30 years SriLankan has proven that this is not realistic. Top business people of the country headed this institution but it earned losses continuously?

A. Yes, we run at losses. Especially the last two years were a very difficult period not only to SriLankan Airline.

Many airlines of the world suffered due to the global economic crisis. Though we earned losses still we survive.

It is difficult to earn profit only from an airline business. We have different sections such as catering, cargo handling and engineering services that already earn profit. As well, there are huge opportunities to expand business.

One issue for making losses was that we are not competitive. SriLankan Airline is a small airline and the advantage of economies of scale was not with us. As a result our cost was high. President Mahinda Rajapaksa has a clear plan and he wants to double the fleet by 2015 and make SriLankan Air a competitive airline.

We have already started this expansion and have leased two flights. We are increasing destinations and frequencies.

Our cost will come down and our business volume will increase. On July 01 we started flying to Shanghai, our third destination in China. In the next few months we will start flying to Moscow.

Q. Is political interference a main reason for SriLankan Airlines to run at a loss.

A. Today SriLankan Airlines comes directly under the President and there is no Political interference that adversely affects the business.

We are doing a competitive business. We are privileged because SriLankan Airlines is exempted from some government regulations that are critical to our business.

For instance, all government institutions should insure their properties with Sri Lanka Insurance. But we are exempted from doing so.

Q. Recently the Government started Mihin Air-a budget airline. How does this affect SriLankan Airlines?

A. The budget airline Mihin Air is not a threat to SriLankan and there is no overlapping of business.

I am the Chairman of Mihin Air as well. The two airlines cater to different market segments. A low cost airline is needed to cater to low cost destinations.

Mihin caters to pilgrims with destinations such as Buddhagaya and Vellankanni and the Middle East migrant workers.

Many airlines have low cost partners to cater to this market segment. It is important to be competitive in the industry.

Q. What are the future plans of SriLankan Airlines?

A. SriLankan Airlines already flies to 49 destinations in 31 countries.

Apart from our traditional tourism market in Europe, our main focus is bringing more tourists to Sri Lanka from new markets together with the Sri Lanka Tourist Board (SLTB).

We have identified our markets and SriLankan Airline will increase destinations and frequencies. China is a huge market and we are sure of increasing high spending tourist arrivals from China.

We will open another destination in China this year. Russia is another market we will venture into this year. Middle East is another market where most wealthy people live.

We can promote tourism in India and already we have direct flights to several destinations in India. SLTB should lay the foundation by promoting Sri Lankan tourism in these markets and we can bring them to Sri Lanka.

We jointly organise various sports events in Sri Lanka to promote Sri Lanka and recently we organised a surfing event in Arugambay.

A lot of changes are taking place in the airline and we have changed the dress code of cabin crews and menus recently.

Two new aircraft have been added to the fleet.

In November we will launch a sea plane service from Katunayake to Bentota and Digana.

Catering and engineering services will also expand. SriLankan Engineering is faster becoming a provider of maintenance repair overhaul (MRO) activities in the region with its experience in Airbus aircraft, excellent facilities and experienced engineering personnel.

The Airline training facility will be expanded and it will be another main revenue source of SriLankan Airlines. SriLankan Airlines is constructing a full flight simulator centre at the Colombo airport in partnership with SIM Industries BV of the Netherlands, which is scheduled to be commissioned in early 2011.

Sri Lanka will become a regional hub for pilot training.
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Old June 20th, 2012, 03:55 AM   #26
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Sri Lankan Airlines to double capacity on Chinese routes
(WCARN.com, June 18)

Recently, SriLankan Airlines announced in Beijing that it will increase the frequency of the flights from Beijing and Shanghai to daily from July 15 this year.

It is learned that the additional flights from Shanghai will be operated on Wednesdays, Fridays and Sundays on the basis of the original flights on Mondays, Tuesdays, Thursdays and Saturdays. And the additional flights from Beijing will be operated on Mondays, Tuesdays, Thursdays and Saturdays on the basis of the original flights on Wednesdays, Fridays and Sundays.

Plus 4 flights from Guangzhou and 3 from Hong Kong, SriLankan Airlines will operate 21 flights every week from the 4 major Chinese cities.

According to the introduction, SriLankan Airlines is not only the nation's flag carrier, but also the largest airline that serves its next-door neighbor Maldives. Meanwhile, its business plays a very important role in South India.

"The additional flights from Beijing and Shanghai will greatly strengthen capacity to destinations like Thailand, Sri Lanka, Maldives, etc. At the same time, it is more convenient and smooth for SriLankan Airlines to get access to destinations in Europe and Middle East," said Dimuthu Tennakoon, Regional Manager (Asia Pacific) of SriLankan Airlines.

More than 16,000 Chinese people travelled to Sri Lanka in 2011, up 56 percent over the previous year, according to statistics.

Last week, SriLankan Airlines announced that it will officially become a member of oneworld Alliance. Since Sri Lanka restored peace 3 years ago, SriLankan Airlines has doubled its fleet size to 21 aircraft and handled up to 3.5 million passengers in 2011. The airline provides passengers with services between its base Colombo and 60 destinations in 22 countries covering Asia, Europe and Middle East.

Its destinations also include airline hubs of oneworld, such as Hong Kong International Airport, London Heathrow Airport, Kuala Lumpur International Airport, Moscow Domodedovo Airport, Tokyo Narita Airport, Bangkok Suvarnabhumi Airport and Singapore Changi Airport. SriLankan Airlines will continue to expand its aircraft fleet and route network in the future.
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