SriLankan Airlines' Vipula Gunatilleka delves into the future of the carrier

AVB recently got the chance to connect with Vipula Gunatilleka, group CEO of SriLankan Airlines, to discuss the carrier’s ongoing strategy and its role in restoring Sri Lanka’s reputation as tourist hotspot
Long favouring Airbus, the flag carrier’s fleet currently comprises of a mix of A320-200, A320neo, A321-200, A321neo, A330-200 and A330-300 aircraft.
Long favouring Airbus, the flag carrier’s fleet currently comprises of a mix of A320-200, A320neo, A321-200, A321neo, A330-200 and A330-300 aircraft.

It is difficult to discuss the current state of the country of Sri Lanka without touching upon the recent Easter Sunday bombings that took place back on 21 April 2019. The horrific attacks that cost the lives of 258 people and injured another 500, has had a significant impact on the nation’s  tourism market.

According to figures from the 2017 Annual Statistical Report produced by the Sri Lanka Tourism Development Authority (SLTDA), the country received 2.1 million international tourists in that year alone.

Contributing $3,924.9mn in foreign exchange earnings and 4.5% to Sri Lanka’s GDP for 2017, the country also saw the total foreign guests nights surpassing 23 million. The top tourist source markets to Sri Lanka hailed from the countries of India, China, UK, Germany and France.

While there isn’t much data on the current state of tourism in Sri Lanka following the attacks, the fact that travel advisories are still in place across the world, as well as reports from local media that paint a stark picture, things are not looking up for the Asia-Pacific nation.

In an effort to restore the country’s reputation as a premium holiday destination, the government of Sri Lanka and key players active within the tourism segment have stepped up their efforts in revitalising the nation’s travel industry.

One of those parties aiding the government’s efforts in this endeavour is SriLankan Airlines, the national carrier. Present at last month’s Arabian Travel Market 2019 (ATM), Vipula Gunatilleka, group CEO, reaffirmed his airline’s commitment to promoting travel and tourism to Sri Lanka.

Sri Lanka as the national carrier is working very closely with the tourist board and various industry groups to promote our online destinations through joint marketing programs and special promotions,” said Gunatilleka.

A familiar presence at the ATM travel and tourism exhibition held annually in Dubai, Gunatilleka highlighted the rising importance of the GCC market for the carrier. Though the number of GCC tourists travelling  to Sri Lanka has always been low, the value of the region lies with its sizeable expat population.

“I would say if you look at the total number of tourists arrivals and distribution from the GCC market, it has been about four to five percent.  But that is without taking into account the expats from India and others who are located in the Middle East, who come to Sri Lanka. If you take those, the numbers are quite significant,” explained Gunatilleka

“When we did up a business plan a couple of months back, we looked at enhancing the market, tapping into the Middle East traveller … With the incident that happened, the purpose was to come to ATM and give reassurance that we will bounce back very soon.”

In terms of what the airline has planned for the Middle East, the move now is simply to increase frequencies. Aiming to add at least 45 more flights to the region, the CEO shared that the frequencies will be added to destinations, such as Jeddah in Saudi Arabia, Muscat in Oman, as well as Abu Dhabi in the UAE.

While not covering the African market as a whole, the airline is looking to expand traffic to Nairobi, Kenya.

“From Colombo, it [Nairobi] is a one-and-a-half-hour flight. It is a good midway point for all the Chinese traffic and even Indian traffic, who can come to Colombo and then go on,” said Gunatilleka.

Of course, the Middle East is not the only region that the carrier is currently focused on. Back at the start of April, SriLankan Airlines unveiled a new five-year strategic plan aimed bolstering the airline group’s brand visibility and reputation within the global market.

A central focus of the plan is on the continued development of its route network, through the launch of new destinations, as well as strategic codeshare partnerships and alliances. And while the recent events in Sri Lanka will force the airline’s leadership to rethink some of their objectives, the plan to expand network reach is still in the cards.

“When we were looking at the strategy for the next five years, we looked at the growth in tourism as a major factor for Sri Lanka, so we were trying to capitalise and harness tourism,” said Gunatilleka.

“Once the situation settles down, we will revisit those all these things. We will then have to come out with a plan B or combination of new strategies, which includes maybe looking better use of our fifth freedom rights, which have not been exploiting in the past greatly.”

In terms of global destinations, SriLankan Airlines has set out to add Sydney, Ho Chi Minh, Frankfurt and Paris, in a phased manner. Additionally, the airline, through its codeshare partnerships, is also looking at gaining more traffic from North America, a market where 200,000 Sri Lankans live, according to the CEO.

He went on to add that the airline is also looking at expanding its share within the global cargo market.

Presently, cargo utilises the belly capacity deployed throughout the network in generating 10% of the airline’s air traffic revenue,” explained Gunatilleka.

“We are currently pursuing the expansion of cargo operations for potential destinations for freighter operations, to support exports on the home base exports into Europe and the United States, as well as connecting the key cargo markets in the Far East, Indian Sub-continent, Europe and Africa. This will help enhance the overall cargo revenue contribution to the airline.”

SriLankan Airlines’ five-year plan includes a provision to expand the carrier’s fleet, which currently numbers  27. The airline’s goal is to increase the size of the fleet up to 34 aircraft within the next five years. This will comprise of 19 narrow body and 15 wide body aircraft.

Long favouring Airbus, the flag carrier’s fleet currently comprises of a mix of A320-200, A320neo, A321-200, A321neo, A330-200 and A330-300 aircraft. With new A330-900 set to be added in the near future, one of the new features of the upcoming aircraft will be the introduction of a premium economy.

“If you look at all the wide body aircraft, they have modern business class. What we are doing on the new fleet, with the new order from Airbus, we will look at premium economy without reducing current considerations on the business class, because for the long-haul market, the premium economy is also in big demand,” explained Gunatilleka.

Other focus areas for the carrier includes an ongoing restructuring plan focused on improving overall financial performance and streamlining operations that are undercapitalised. While part of this includes pure cutting of $35m and renegotiations of leases according to the CEO, there has also been a big push towards digitalisation.

Exploring technologies that include fast travel systems, CRM-based service delivery, data security, system availability, as well as the automation of manual processes, the airline is moving to improve both operational efficiency and staff productivity.

Process improvement is also a top area for SriLankan Airlines, which looks to expand direct online sales and generation of revenue from new digital businesses. Additionally, the carrier is exploring novel digital payment options, such as e-wallets, online-mobile commerce and community-based selling. This, in turn, will encourage the development of a digital marketplace.

Another initiative is on driving the e-commerce. Our online penetration was very low compared to an airline of our size. Our online contribution was about 11% last year. Over the last six months, it has gone up to about 15%. So we will actively pursuit to increase the online revenue. That will also have direct benefits like reducing GDS costs,” said Gunatilleka.

“We have invested on several digitalisation projects to add value to the customers by streamlining our existing processes and systems in areas such as e-commerce, airport operations, social media platforms and SriLankan Holidays,” he added.

According to the CEO, technology will play a key factor within the global aviation market in the coming years. In addition to introducing new ways of approaching challenges and streamlining day-to-day operations, technology can also help airlines reduce their respective costs.

Equally as important, however, is the value of technology in transforming the passenger experience. Both in how they book and manage their journeys but also in evolving the inflight experience once the flight takes to the sky.

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