Sri Lanka Aviation

Don't confuse full flights with profitable flights. If you sell tickets cheaply enough you can fill all the seats no problem.

What's the price of a return ticket?

When I flew the CMB-LHR-CMB route these flights were also always full. This was still a money losing flight.

Lets see some figures.

It's incredible actually. I've bought DAC-CMB return flights ranging from $650 - $900! Which is insane considering it's a 3/3.5 hour flight with no IFE, minimal service, and a tiny meal. They have a monopoly on the route, and they're really milking it. I've heard that Mihin officials say that Jakarta and Dhaka are their most profitable routes, and I wouldn't be surprised if it were true.

They are transit to Middle-East I believe- so add in the onward sector, not bad I guess !!!

So does IXM. Its a 95% feeder for UL network especially middle east. This flight always gets good load round the year, but I cannot comment on yield. I think nobody has exact figures of it.

Service of Srilankan Airlines

As per recent skytrax comments, Srilankan does not have a good service rating. People have bad comments specially on the flights running to Europe. Bad seating, outdated flight entertainment systems, food, toilet facilities have been highlighted. Hope they will provide a better service with the introduction of new flights.They need to improve a lot to competed with EK,QR,EY,SIN etc.

SriLankan Airlines finalized agreement to lease four A321neos, two on lease from AerCap (Netherlands) and two on lease from Air Lease (US). 20FEB2015




Should've leased some more NEOs IMHO to replace the Mihin fleet (although I suspect this would now be negotiated separately after the merger).

At the end of the day its the people that make the Airline.

UL have lost so many good people in all departments since the GOSL took over the Airline. The Airline's reputation has been badly damaged. The Clowns at the top have only made things worse. Any form of people management is completely missing at the moment.

There is a culture of impunity and zero accountabilty. That needs to change before anything else gets done.

The management didn't count on the election results - they thought the party would never end. They are most likely frantically trying to avoid any accountability. Unfortunately there are e-mails and signed letters that prove otherwise.

The investigation will turn up a lot - I hope people have the courage to come forward and provide the necessary information.

The real tragedy is that none of this should have happened in the first place.

Mihin cancels Boeing deal; Airbus planes instead

Mihin Lanka has cancelled a deal for two Boeing 737-800 aircraft after convincing the international leasing company that the costs associated with changing its Airbus fleet to Boeing would cripple its finances. After protracted talks, the California-based Air Lease Corporation (ALC) has agreed to let Mihin have three Airbus planes instead, said Nishantha Ranatunga, the former Chief Executive Officer (CEO), who spearheaded the negotiations. Two of them are new-generation A320neo aircraft while the third is an A319.

Company sources said it had not been easy to reshape the agreement. Mihin had already signed up with ALC for Boeing before Mr. Ranatunga became CEO in April 2014. But it was found that the expense of operating Boeing aircraft (particularly the purchase of spare parts) would squeeze the struggling company’s balance sheet further.

Boeing initially adjusted or introduced some terms to make the deal more affordable. Even this would have required a heavy investment and was not sustainable for Mihin, which had adopted a new business plan. After ALC agreed to lease out Airbus aircraft instead of Boeing, the amended contract was closed in November.

ALC buys new commercial jets directly from manufacturers and leases them to airlines. The international jetliner market is dominated by the European Airbus and the American Boeing companies which are in intense competition with each other.

Mr. Ranatunga, who vacated the post of CEO earlier this month, said Mihin currently had three Airbus aircraft, of which one would be returned. With the addition of the new planes, the total fleet would be five. However, the new Government’s plans for Mihin remain unclear.

Presenting the interim budget in parliament on January 29, Finance Minister Ravi Karunanayake called Mihin “a loss making entity” and said it had incurred a cumulative loss of Rs. 15 billion over five years. He proposed a consolidation of Mihin and SriLankan as an interim solution.

But Mr. Ranatunga said the airline could recover if the business plan — which was produced by Mihin’s own staff and which aimed to make it self-sufficient in four years –was adhered to. The company suffered operational losses of US$ 1.2 million in April 2014. This dropped progressively until it made profits in August the same year. It suffered losses during the last quarter, rallying again in January this year.

The turnaround was a result of Mihin negotiating with its partners to reduce costs, Mr. Ranatunga said. For instance, the company secured a 35 per cent reduction on airport charges in Sharjah. Meanwhile, SriLankan Airlines gave paid access to its resources. The two companies shared country managers and arranged for secondment of cabin and safety crew. Incentive schemes were introduced for technical and cabin crew to facilitate optimisation of labour.

One reason for past losses was a failure by the Government to inject the required capital on time, Mr. Ranatunga said. The State spent Rs. 14.5 billion over eight years on Mihin. Of this, 45 per cent — or Rs. 6.5 billion — was allocated in 2014-2015. “This was a positive factor for us to do well,” Mr. Ranatunga said. He said much of the money was used to settle fuel bills and unpaid airport charges, both local and foreign.

A massive 43 per cent of Mihin’s expenditure goes towards aviation fuel, statistics provided by Mr. Ranatunga show. Only six per cent goes towards staff. Finance charges, at four percent, were “substantial,” he said. Mihin had been trapped in a “vicious cycle”, the former CEO held. When there was no funding to pay for fuel, the Ceylon Petroleum Corporation slapped penalties on Mihin. This caused the airline to borrow from banks, and so it continued.

Mr. Ranatunga said the key challenge administrators faced was to change perceptions. “My personal view is that if you manage this organisation well, you can run it on a commercially viable basis,” he said. He also said that amalgamation of the two airlines was “okay, so long as you run different profit and loss accounts”.

“Mihin’s costs are low,” he explained. “And its recent performance has been good.” The projected loss for this year was US$ 13 million. This has now been revised to US$ 11 million. “If this trend continues, Mihin can make profits in the first quarter of 2017,” he claimed.

http://www.sundaytimes.lk/150222/new...ad-137011.html

Nishantha thinks Mihin can be turned around and was on its way there.

Sounds just like Kapila stating that UL will become profitable!

These people have zero credibility imho.

Mihin Lanka adds a fourth aircraft to its fleet
Is Mangalore a new destination for Mihin Lanka?
Any pictures of 4R-MRF?

Good News.... Thought MJ was gonna merge with UL

Airbus A320 -232 2564 4R-ABJ Sri Lankan ferried 17feb15 CGK-CMB after paint into all white prior delivery to Titan Airways as G-POWM

UL must get some stored A320s on lease, many Airbus planes owned by defunct airlines under storage.

Bankrupt Spanair had 19 A320s and 5 A321s, still some under storage.

Global aircraft financing companies have begun to insist on leasing contracts of longer tenures — 08-10 years.

Even financing companies keen to release there stored planes.

There's really no such thing as an "A320" - they are all different.

Different Engines/weights/limitations/part numbers/service bulletins/modifications/interior.

Even Emergency procedures may be different between different aircraft.

There is no point leasing an aircraft that is different to the others in the fleet. It becomes very expensive. You need parts that can only be used by a single aircraft in the fleet. If nobody else in the region operates an aircraft with the same specification then even getting parts will be a big issue.

Interior modifications are also very expensive especially things like an upgrade of the inflight entertainment system. Sometimes the leasing company will not even allow this because of the effect on the re-lease of the aircraft.

I've had it happen that the wrong part (IRS) was installed on an A320 I was flying at UL.

The only way this makes sense is to lease an entire fleet where the aircraft all have the same specification.

All the issues outlined above will be present in the Mihin fleet. I believe the UL A320's are now all the same specification.