Main Lankan Airlines

FRAEXIT & PAREXIT by SriLankan Airlines

After leaving Rome in May 2016, the domestic airline SriLankan Airlines recently made public its intention to leave Frankfurt and Paris for the next start of the next Olympic Games following many uncertainties. There is no mystery that all Europe's lines have suffered a loss in the last 37 years. SriLankan Airlines was overcome by airlines from the Near East in its continental market by the unscheduled ad hoc allocation of airside traffic licenses by GoSL to international airlines in 2005.

Were the flight to be cancelled in May 2016 and not November 2016, the carrier would have cut costs by billions of US dollar. May, June and September are traditionally low sales periods for Europe, while December, January, February and March show significantly higher sales. The original proposal, which recommends the closure of Europe with the exception of London, is well-founded.

Seven month later, during the Extraordinary General Assembly on 19 January 2016, the Chairman briefed stockholders on the proposed closure of the Rome, Paris and Frankfurt lines, which was still under GoSL authorisation. Stakeholders in the recreation sector, in particular tour operators and hotel operators, have voiced their disapproval of the move to withdraw from Paris and Frankfurt.

They consider that the domestic air operator should maintain loss-making itineraries. You still believe in the ancient idea of the "national carrier", which is part of a long gone time. Economically oriented advanced airlines run economically sustainable air services and shorter air services that nourish the long distance air services and help to improve viability.

Unsanitary tourist development agencies are not justifiable for domestic or other transportation companies to maintain their operational lanes, resulting in annual losses of $1 million. SriLankan Airlines' main rivals in Europe are airlines from the Near East with large carrier systems, a number of gateway services in each of the countries of Europe and several daily flights.

Operating from Europe railway terminals with its finite networks, a unique gateways in every continent and 3-4 flights aweek except London, SriLankan Airlines is too dependent on its main target Colombo and a few other targets such as the Maldives, some southern India and Bangkok.

The diagrams contained herein, which are based on MIDT (Market Intelligence Data Tapes), reflect the actual state of the company's position in the global data center. The MIDT is a softwares application that bundles together airline reservation sectors from single cities/countries to other cities/countries or so-called city pairs. Not included are the numbers of budgetary bearers and web revenues from airline reservation machines.

The majority of airlines, SriLankan Airlines included, use this analysis instrument for historic information collection and scheduling as well. Figures have been grouped into three categories: Sri Lankan Airlines; Emirates, Qatar Airways, Etihad, Oman Air, Kuwait Airways and Saudia as airlines of the Mid East and all other airlines as Other Airlines.

The graph shows the airline shares from France, Germany, Italy and the United Kingdom to Sri Lanka in 2014/15 and 2015/16. While SriLankan Airlines had a 50% plus segment from all these markets by about 2005, it has gradually been losing segment shares to rivals over the last decade.

SriLankan Airlines' present slice of the French, Geman and Italien post-Sri Lanka pie is an incredible 27. In each of the four cases, the airlines in the Near East have a joint domestic passenger transport penetration of more than 50 per cent and in Germany the highest of 72 per cent. The chart shows the shares of the airlines from Sri Lanka to France, Germany, Italy and the UK in 2014/15 and 2015/16.

Sri Lanka's very small and highly price-sensitive markets. In 2015/16, the airline's shares of the four EU member states' markets did not surpass 30% in any of the four states. A low subscription of the basestation Columbo increases the printing on the continental substations for higher subscription.

Turnover on four destinations in Europe fell by 20% in 2015/16 compared with 2014/15, despite a 43% drop in the cost of fuels for air services used. Managers at the domestic airline blamed the decline on intensified competitive pressure and the stronger US dollar. In this context, it should be noted that, despite a significant drop in the cost of fuels, in 2015/16 the loss on the Paris and Rome lines exceeded that in 2014/15.

This is a false name, as it only covers travel to/from Paris, Frankfurt, Rome and London to/from Colombo. The unavailability of day trips in the timetable of the flag airline other than London largely denies this benefit. In addition, for a traveller who travels from Nice, Munich, Berlin, Hamburg, Milan, Manchester, Birmingham, Glasgow or any other major town in Europe, it does not matter whether he changes his connections in Paris, Frankfurt, Rome and London when flying with SriLankan Airlines or in Dubai, Doha, Abu Dhabi, Muscat, Kuwait, Riyadh or elsewhere with other airlines.

In 2015/16, the incumbent carrier's overall airline penetration decreased compared to 2014/15. SriLankan Airlines' overall audience shares were easily surpassed by airlines from the Near East, both in the four continents and in Sri Lanka. Given the high level of penetration by airlines from the Near East, there is no justification why they should not close the gap left by the withdrawal of the incumbent from Rome, Paris and Frankfurt.

Significant reductions in line loss on the London 2015/16 line compared to 2014/15 are mainly due to a 50% decrease in the cost of fuels. Anyone who rejects ROMEXIT, FRAEXIT and PAREXIT from SriLankan Airlines must take into account the above described facts and must not resist the step out of self-interest.

Eighteen month into service, major shareholders GoSL and the airline's board of directors have made no progress in seeking a resolution to the deficit of the domestic flag carriers, with the exception of the call to transform the company into a public-private company and its plan to hand over the profitable ground services to Airport & Aviation Services Ltd.

Since January 2015, the absence of orientation and a consistent blueprint has been mainly due to the relaxed stance and absence of commitment on the part of those in charge of the carrier. Given GoSL's restraint in closing the carrier, it must be ready for all eventualities, especially if no appropriate investors are found.

In geographical terms, Sri Lanka is better situated than the Near East to serve such a large area. This would be a new product or service which would be deserving of in-depth investigation. Meanwhile, it is hopes that the company has worked out a "survival plan" to keep the business going beyond the time limit set by the Minister of Finance, and a way will be found for the staggering and dull company.