Since privatisation in April 1998, SriLankan Airlines, formerly Air Lanka, has shed its torpor and established itself in the market.
The new management team from strategic partner Emirates Airline, which now has a 40 per cent equity stake in the company, has quietly transformed the airline. The government's laissez-faire policy has undoubtedly helped, and though it still holds 51 per cent of the equity, nine per cent has been given to employees.
"'You have given us the mandate, let us run the business,' we told the government", said CEO Peter Hill. "We will show you the results." Hill is pleased the government has been supportive.
As for the results, he points to the changes in the fleet: the name change to SriLankan in 1999, a complete image change, new logo, new aircraft interiors - including seats - and exteriors, plus the introduction of IT in all areas of airline operation.
As a strategic partner, Emirates decided to change the fleet composition by bringing in six Airbus A330s and an additional A340. It sold the aging Lockheed Tristar's to give the airline an all-Airbus fleet. The airline already had two A320s and three A340s.
Cargo formed part of this broad strategy with a brand name and a separate budget. Even before this change took place, cargo made its mark with a 45 per cent revenue growth in 1999-2000 to US$43.8 million, roughly 14 per cent of the airline's revenue. The home base contributed 35 per cent to this total and a further 28 per cent came from the Far East. The airline carried a total of 41,670 tonnes in 1999-2000 at a load factor of 57 per cent.
SriLankan's route network stretches from the UK and Europe to the Middle East, South Asia, Australia and the Far East, covering 34 destinations.
"We want to make Colombo a gateway airport," said Naveen Gunawardene, senior manager of cargoThe airline's A340s carry 32 LD3 containers, while the A330s carry 20. The aircraft can also carry 317-by-254 centimetre pallets. The capacity to the UK and Europe is about 250 tonnes each week, 150 tonnes to the Middle East and 200 tonnes to Japan.
Finished garments, mostly bound for the UK and Europe, account for 30 per cent of the load, followed by another 30 per cent in fruits and vegetables bound for the Middle East. Each of the three flights to Tokyo carries an average of one tonne of flowers, five tonnes of fish and 500-700 kilograms of ornamental plants. In addition, the airline carries courier parcels on behalf of FedEx, TNT and DHL to Dubai and Singapore.
Last September, the airline wet-leased a Bulgarian AN12 freighter with a 15 tonne capacity for twice-weekly services to the southern Indian cities of Bangalore and Trivandrum, plus two more weekly services to the island of Gan in the Maldives archipelago, off the west coast of India.
The Gan services are meant to provide food and other commodities to workers in four factories set up by Sri Lankan businessmen. The aircraft flies about 90 hours a week.
The airline has a blocked-space agreement with its partner, Emirates, on its weekly Amsterdam-Dubai-Hong Kong service, which operates through Colombo.
"Imports are mostly fabric, garment accessories, computers and telecommunications equipment," said Gunawardene.
SriLankan's cargo traffic is well balanced with exports accounting for 55 per cent and imports 45 per cent.
A number of foreign carriers operate freighters into Colombo. Korean Air operates Boeing 747s between Seoul and Colombo via Singapore, Air China has a 747 service from Taipei, and Saudi Arabian Airlines operates three McDonnell Douglas MD-11 flights connecting Dhaka with Colombo and then onwards to the Middle East and Europe.
Lufthansa comes in with an MD-11, which goes on to Bangalore in India.
As a sole handling agent, SriLankan handles all the cargo traffic into Colombo, more than 110,000 tonnes each year, which is far in excess of the 70,000-tonne capacity of the warehouse it leases from Airport Aviation Services Limited, a government company.
The airline expects to conclude an agreement with the AASL to develop facilities at Colombo - to handle 250,000 tonnes of cargo annually - for completion by 2003. The total should to be reached in 2007 or 2008, according to the airline.
Cargo clearance is swift at Colombo where it takes a mere six hours, despite the slow pace of computerisation in Customs. Because the Customs computer is not directly linked with either airlines or agents, air waybill numbers have to be manually entered into the Customs computer.
SriLankan is connected to CHAMPS, which allows it to trace its consignments.