Sri Lank an Airline Industry

8/8/2019 Sri Lank an Airline Industry

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Analysing Challenges and Critical Success Factors

Presented bySaatviga S.


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Vision & Mission

Introduction

Ten Year Review

Key Performance Indicators

The Business Turnaround Plan

Challenges Faced

Worlds Successful Airlines and Strategies

Factors Influencing Success


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Vision

To be the most preferred airline in Asia

Mission We are in the air transportation business.We provide our

customers with a reliable and pleasant travel experience.We

provide our business partners with a variety of

innovative, professional and mutually profitable services.We meetShareholder expectations of profitably marketing Sri Lanka and

contributing towards the well-being of Society.We are a

competent, proactive and diligent team. Our contribution is

recognized and rewarded.


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Srilankan Airlines began operations in 1979 as the National Carrier

of Sri Lanka

Serves 45 destinations in 25 countries in Europe, the MiddleEast, South Asia, Southeast Asia, and the Far East.

Codeshare partnerships with bmi (formerly British Midland), Etihad

Airways and Malaysian Airlines

Shareholders

Government of Sri Lanka - 51.05%

Emirates Airline - 43.63%

Employees - 5.32%


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Subsidiary - SriLankan Catering (Pvt) Ltd. is a fully owned

subsidiary of SriLankan Airlines.

Workforce - More than 5000 employees in Sri Lanka and overseas In-flight comforts Business and Economy Class Seats

FlySmiles Flyer Program

Srilankan Cargo

Srilankan Engineering Technical Arm

Ground Services


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0

10,00020,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Operating Expenditure Net Profit/Loss Revenue


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Challenges faced

Arising global fuel costs

Struggle of the national tourism industry to survive in a

wartime scenario

High interest rates

Major transition in management

Increased competition from subsidised airlines

Dropped prices fighting for market share


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0

1000

2000

3000

4000

5000

6000

7000

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Estimated Loss ss in Milli ns

Business

Turnaround Plan

& Restructuring

Global

Economic

Crisis

Huge

Challenges

Faced


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Fuel Surcharges by Competitors

Global Economy

Passenger Revenues (decreased by 5%)

Cargo Revenues (decreased by 8.5%)

Overall Passenger Capacity (decreased from 12,599 million to

11,731 million)

Unit Costs (increased from Rs. 46.48 - 50.71 per Tonne

Kilometre)

Average Staff Strength (significant decrease)


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Key Aspects of the Plan - Earn more, spend less and waste not.

Restructuring of passenger and cargo revenue generation

Restructuring of route network

Savings through increased fuel efficiency

Reducing companys fixed costs

Renegotiating of contracts with service providers

Optimising of sales channels

Reduced IT and Communication costs

Increase Productivity by focusing on People, Process and

Technology


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Optimising Revenue

Improving Service Delivery

Enhancing Srilankan Engineering

Increasing Fuel efficiency

Increasing Productivity

Technology Requirements


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New services to Rome utilizing the market opportunities in Italy

Temporary Suspension of Loss-Making Sectors

Hyderabad, Calicut, Cochin, Coimbatore andGoa

Increasing operations to key destinations

Increased frequencies to iddle East and South East Asian destinations

Direct services to increase convenience of passengers and reduce flying time

(Karachi)

Expansion of route networks through increased Code share Partnerships

Increasing bookings through its Internet Booking Engine

Customer Loyalty Programme FlySmiles


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Srilankan Holidays teamed up with Singapore , Thailand and Malaysia

Business Class range and Platinum Range of holiday packages launched for the

higher income market segment partnering with the top hotels

Event-based packages

Introduction of new products eg. HOTSEATS

To promote advance bookings on the Airlines website

SkyChain Cargo Handling System for customer convenience andoperational efficiency

Increasing Cargo revenues that contributes to the 13% of the Airline revenue


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Emphasis on Inflight Service

Training of cabin crew and increasing the no of instructors from 4 to 20

Ensuring continuous on-site monitoring and evaluation of crew members

Improvement in Meal Services

Significant changes to inflight menus to suit a variety of customers

Reducing wastage and overall meal costs

Renegotiation of contracts with overseas caterers resulting in significant savings

Enhancement to inflight entertainment

Duty free sales on new range of 180 products including worlds

leading brands and Srilankan items

Heart-start machines for medical emergencies


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Recruitment of new Chinese passenger assistants for Beijing service

SMS alerts on flight service

Uplifting the service standards of ground handling services for other

airlines

Training of new airport staff and sky marshals

Innovation and cost control

In-house production of specialised vehicles and equipment especially with regard toairport airside activities

odification to air-sickness bags to enable rapid identification of unused bags

Closing of airport offices overseas


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Marketing programmes to increase awareness of SriLankan

Engineerings capabilities as an MRO, in order to attract new

customers and enhance revenue

Major Contract with Indian Carrier IndiGoue to carry out maintenance

checks

Training more aircraft engineers for Airblue, and to carry out

maintenance checks for the Pakistani carrier

Continued emphasis on key areas like fuel efficiency and punctuality

Structural modifications to the fleet in-house resulting in cost-savings


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Use of diesel-operated Ground Power Units to power internal

systems and air-conditioning on aircraft parked at BIA, instead of

using Auxiliary Power Units of the aircraft

Reduce fuel burn while landing

Flying shorter routes whenever possible.

Re-evaluation of the choice of alternate airports

Stopping of over-fuelling of aircraft, to reduce weight

Focusing on having clean aircraft to reduce drag while in flight

Tankering more fuel than required from cheaper points


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Continuing to review company structure for greater effectiveness and

productivity

Customising development intervention programmes to the

requirements of user departments and business demands

No-Pay Schemes, to reduce staff costs

Continuous improvement of welfare facilities

Engaging employee unions in the decision-making process

Enhancement of recruitment processes for the future


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Consolidation of Data centers in Colombo and Katunayake

Maximizing the utilisation of existing systems to user

departments

Creating a common customer database to integrate different sub

business units which interacts with customer profiles

Revamping the Corporate website

Increase penetration levels for internet bookings

Rich features for customers and content management tools for internal users

Introduction of a CRM system

In-house developments of new systems for cost saving

Minimise IT risks through IT security audits


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Singapore Airlines

Cathay-Pacific Airways

Qatar Airways

Thai Airways

Asiana Airlines

Malaysian Airlines

Emirates Airways

Etihad Airways


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Fully branded product/service differentiation strategy

First to introduce hot meals, free alcoholic and non-alcoholic

beverages, personal entertainment systems, and video-on-demand

in all cabins.

Maintains the youngest fleet of aircraft among all major air carriers

Low maintenance or replacement costs

New aircrafts are sub-branded further to distinguish from others

Invests heavily in R&D, innovation and technology as an integrated

part of the business strategy


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The famous Singapore Girl

Rigorous training programs for the cabin

and flight crew

Strong Financial and cash position to

internally fund purchases and limit interest costs

Continuous price-premium strategy and satisfactory passenger load factors

SIA carefully hedge up to 50 % of its fuel contracts 2 years in

advance to avoid cyclical and often large volatility in fuel prices


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Operates wide-body aircraft and flies mostly long haul

lowers its per-seat-mile costs so it can be competitive on pricing

Newer fleets resulting in low maintenance and replacement costs

Attracts higher paying customers

latest in-flight amenities and entertainment systems

Distinctively uses Asian elements to create a premium product that

appeals not only in its home markets but also to a Western audience. High-level services provided especially for 1st class section

Latest technologies used to enable faster and more efficient handling

of functions such as ticketing, baggage and cargo handling


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Sporting event sponsorships for promoting brand awareness

major events in football, horse racing, yacht racing, rugby, golf, cricket and

tennis.

Recruitment from over 100 countries around the world and

provide training to them to the highest standards

Invest millions of dollars to provide advanced engineering support

Huge investments on promotion campaigns


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User-friendly website to book and confirm flight reservations

Development of catering service

In the process of implementing e-ticketing to save time and

reduces the need for check-in personnel

Established a Tourism Alliance to promote Thailand tourism and

travel industry

Increased cooperation at the domestic andregional levels as well as with other global alliances

to strengthen the airlines competitive edge and

expand market share


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Implementation of the Customer Relationship Management

system

Automated Self Service System for domestic travel only to

facilitate passengers demand in areas of reservations and check-in

Frequent Flyer Programs

Promotions through media, co-marketing efforts with hotel chains

and credit card companies and travel agents

Maintaining high safety standards - Compliance with ISO 9000


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People

Service Product/Promotions

Route System

Fleet Management

Revenue/Cost Control

Financial Management


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Srilankan Airlines Annual Report 2008/2009

http://www.srilankan.aero/aboutus/SriLankan_Airlines_Annual_Report_2008_20

09.pdf

http://www.brandchannel.com/features_profile.asp?pr_id=209

http://goliath.ecnext.com/coms2/gi_0199-6720187/CASE-STUDY-E IRATES-

Long-haul.html

http://www.hicbusiness.org/biz2003proceedings/Niti%20Dubey-Villinger.pdf

file:///C:/Users/Sudhahar/Desktop/Airlanka/facts_5242839_airline-industry-key-

success-factors.html

http://gbr.pepperdine.edu/064/airlines.html

http://www.ehow.com/facts_5242839_airline-industry-key-success-factors.html


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Sri Lank an Airline Industry

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