Sri Lanka Aviation

I think this is extremely premature to even discuss. SL politicians and press jumps to conclusion even before a bid is submitted. I met minister in charge of UL and few SL politicians recently on my recent visit to SL...there view is that they going to completely write off SL debt. My view is how Treasury/Ravi K is going to support that right off. There is a clear disagreement between Minister Hashim and Ravi K.

Just to add...Most of my Canadian flights had to transit via Indian airport. I must say I was really impress with Transit facilities in BOM and BLR...CMB looks like a cattle shed compared to Indian Airport.

Chinese are not in a charity business Aercap/UL deal come with lease commitment for 12 years.

Do you think Azul has the same lease agreement and terms as UL??? (12 Years)

I thought CMB- SIN and VV was always running at 70% or more.

Interesting if an off load lead to squabbles. However, EK was fully exploiting their freedom right, so I don't see any reason for them to whine.

And, if, as Cayman says, EK listened to their Med team (heck, I would too if a passenger asked for Oxygen on board), they are not wrong.

Btw, Hainan, if I recall, is privately held.

IIRC EK did temporarily cancel the CMB-SIN route previously when DXB was resurfacing the runway.

UL taxiing for reform



Taxiing to take-off on its restructuring plans, SriLankan Airlines will hand over its European route-plying A330 aircraft to Pakistan International Airline (PIA) with the crew and delivery of the first one already finalised for next month, top Government officials said yesterday.

Public Enterprise Development Minister Kabir Hashim along with his Deputy Eran Wickramaratne, outlining a host of new measures to turn around the fortunes of the debt-ridden national carrier, told reporters that the aircraft currently flying to Paris, Rome and Frankfurt would be diverted to PIA.

SriLankan officials are presently in Islamabad ironing out the details of the handover, including possible logo changes and crew security, they said, with the first aircraft to be handed over in August on a wet lease. Last month SriLankan announced they would be pulling out of the Frankfurt and Paris routes by October while Rome was dropped in February.

“PIA will use these aircraft to fly their London-Lahore-Islamabad route and we hope to eventually handover three more aircraft once negotiations are finalised,” Minister Hashim said. “The costs of the leases have not yet been finalised but we hope to hand over the rest of the aircraft on wet leases or on the best possible terms.”

Hashim insisted the step was taken because the European routes have “low yields” and expressed confidence the tourism industry would continue its robust growth without direct flights from these destinations. The duo insisted the airline would concentrate its resources on increasing regional flights; that are shorter, have more passengers and higher profit margins.

“If you want to fly to Rome would you fly SriLankan or would you book the cheapest possible ticket?” questioned Wickramaratne. “You would pick the cheaper ticket and other travellers are no different. There are plenty of Emirates, Etihad and Qatar flights to the Middle East and we plan to increase SriLankan flights to Dubai, Abu Dhabi and Oman to funnel these tourists to Sri Lanka.”

SriLankan is losing the price war waged by the well-heeled Middle Eastern airlines that combine strong marketing campaigns with good service to attract customers, the ministers stressed. However, SriLankan cannot afford to let its aircraft flying to Rome, Paris and Frankfurt sit unused, resulting in the agreement with PIA.

“Currently operational losses of SriLankan is $ 993 million but with liabilities it increases to $ 2.1billion, making it a hard sell. Just this week the Treasury released $ 88 million for debt payments. At the moment the Government has given the option of absorbing this loss if an international partner can be found but it all depends on the negotiations. At the moment no formal application has been made by any carrier,” Minister Hashim said in response to questions of whether popular Hainan Airlines Company Ltd. of China has made any overtures.

However, the ministers confirmed that a Chinese company had expressed interest in managing the Mattala International Airport during Prime Minister Ranil Wickremesinghe’s visit to Beijing earlier this year and discussions were ongoing.

“The only condition imposed by the Prime Minister is that any company taking over must be willing to absorb the loan and interest payments on Mattala.”

Both ministers were extensively critical of SriLankan management under the previous Government headed by former President Mahinda Rajapaksa and were emphatic that investigations would intensify once an ongoing international forensic audit report is finalised.

“This is a national crime and we have no intention of protecting anyone. There is no question of the crime but finding evidence and following due process is time consuming but we are determined to do things right,” said Wickramaratne.

Govt. pays $ 15 m fine to cancel new Airbus A350, keen to offload rest
The Government is scrambling to save millions of dollars in lease payments for three Airbus A350 aircraft, which the previous Government ordered, after paying a fine of $ 15 million to cancel the first one.

The Government of former President Mahinda Rajapaksa in 2013 ordered eight Airbus A350 and seven A330 aircraft in a $2.3 billion deal. SriLankan Airlines has already taken delivery of all seven A330 aircraft but the eight A350 aircraft were to be delivered in two batches with the first arriving in 2016 and the second from 2019-2020.

However, in April Prime Minister Ranil Wickremesinghe announced the cancellation of four A350s that were to be delivered as the second batch leaving SriLankan Airlines to deal with four A350 aircraft. By the time the new Government re-examined the deal three A350 aircraft had already gone into production but they were able to cancel one after paying a $ 15 million penalty.

Of the three remaining A350 aircraft one is nearing completion and is expected to be delivered in October. Public Enterprise Development Minister Kabir Hashim acknowledged the Government was working hard to find other carriers willing to take on the A330s and new A350 aircraft as the lease payments were astronomically high.

“The leases for these aircraft were clearly artificially inflated. Just for one A350 aircraft we are paying AerCap $ 1.4 million per month. Even the highest lease would have been about $ 1 million. For each A330 aircraft the Government is overpaying $ 385,000 to $ 400,000 every month. Given that the lease for the A350s is for 12 years we will end up having to pay $ 230 million,” he said.

AerCap is the world’s largest airline leasing company with 1,640 owned, managed or on order aircraft in its portfolio and serves approximately 200 customers in 80 countries. The Government promised payment to Airbus and, following international practice, Aercap made payments to Airbus and then the Government leased the aircraft from AerCap.

- See more at: http://www.ft.lk/article/556620/UL-t....rCw1O92m.dpuf

UL to take over MJ destinations & aircrafts end of this year. MJ aircraft to be rebranded as UL http://www.dailynews.lk/?q=2016/07/22/business/88251

Agreed - the whole thing sounds like another Fairy Tale.

Just like the Megapolis and the new Terminal - it's just more Big Talk.

What possible benefit is there for Hainan?



As I've stated before - it's not the ME3 that are to blame for the losses. It's pure incompetence by UL Management. Very surprised to see this in print.

Numerous brave people and I have provided more than enough information to the Weliamuna Commission. There is a case for Treason against these people.

However Druvi Perera, Pradeepa Kekulawala and others continue to be employed by UL.

Just more talk imho.

This site has now changed the customer name from Sri Lankan to AerCap but the final customer is still unconfirmed.

Looks like the first 3 A350s have almost been cancelled by Sri Lankan.

This is temporary from January to March during the runway re-surfacing work. The flight will resume in April.

EK will still operate 5 DXB-CMB-DXB flights during evening and night during this period. The exact schedule has to be finalised.

http://www.sundaytimes.lk/151122/bus...17-172304.html

What's this? We are getting the A350 again?

Hey folks what are the benefits and cons of today's government and past government in terms of aviation and tourism?

It mean they are looking someone to take these lease payments/A350 otherwise (by October) they need to take the hit.

http://www.sundaytimes.lk/160724/bus...la-201874.html

“Open Sesame” for Mattala

View(s): 47

"One thing you cannot grudge against the Government! Things are happening: Committees (too many?) are appointed; taxes are imposed, disposed or suspended; mega development projects like the Megapolis are on the cards, etc. Among these are some significant developments in the travel and tourism sector. While Sri Lanka this year marks 50 years of organised tourism in the country (the flagship event being a UN organized ‘peace and tourism’ conference in Passekudah, two weeks ago), the costly Mattala airport it appears is finally going to get the business it desperately needs while the Bandaranaike International Airport (BIA) is not only getting a facelift (under an earlier regime schedule) but is being closed for three months next year.

Exclusively reported in the Sunday Times last week, the closure of the BIA during daytime from January 6 to April 6, 2017 to undertake urgent (and required by international regulations) renovations to the 30 year-old runway and the management of the flights would be one of the most challenging and critical exercises to be handled by the airport management. While the airport handles an average 170 flights a day, around 60 flights operate during the period 8.30 am and 4.30 pm (the times the airport is scheduled to be closed during January-April 2017), all or most of these day flights which would be rescheduled at night.

However all these day flights will be rescheduled at night is still under discussion by the authorities. Also under discussion is whether Mattala airport needs to be co-opted in an emergency and/or whether some flights may take off from there with a shuttle bus and/or whether a shuttle flight between Ratmalana and Mattala is necessary. The biggest problem that airport authorities would face is whether they have the capacity to manage the congestion at the airport. Already the airport is bursting at the seams, annually handling more than its capacity, while a new terminal is coming up for which construction is to start in November.

Sometimes the airport is congested with long queues outside ticket counters with check-in taking as much as 30 minutes, despite efforts by airport authorities to speed up the process. With extra flights during a 16-hour window (when all flights operate), airport authorities and airline staff would be taxed to the hilt. Furthermore ,sections of the airport are likely to be sealed as the renovations get underway in November. Delays in flights will exacerbate the situation, particularly in the case of SriLankan Airlines which is facing a crisis of sorts at the moment. However by January 2017 a new partner would hopefully have been found and the airline brought under new management.

All these require efficiency to rise to a never-before level at the airport. It calls for smooth coordination between airline staff and airport staff, particularly ground staff, precise coordination between the control tower, incoming and outgoing flights and other connected agencies, among other matters. Efficiency levels at the airport would be tested to the maximum and success would not only benefit the country but also place Sri Lanka as a well-managed international airport in crisis situations. In the meantime, Mattala is also likely to be up and running (by next January) as an active and bustling airport.

The Government has called for international expressions of interest in investing and managing the airport with some significant concessions which even BIA doesn’t have. These concessions are however applicable only for Mattala and not the BIA. For instance, Mattala investors would be entitled to all ‘9 freedoms in the air’. This is much more than the ‘open skies’ policy. Under international aviation covenants, ‘9 freedoms of the air’ gives an airline the freedom to fly over Sri Lankan airspace, pick up passengers from an airline’s home base (example Dubai in the case of Emirates) to Sri Lanka and back, carry passengers to any destination outside Sri Lanka and for pick up passengers from another country (other than the home base) and land in Sri Lanka.

In the case of the BIA, foreign airlines are restricted to carrying passengers from Colombo to another destination other than the home base. For example Emirates can carry passengers from Colombo to Dubai only and passengers have to take a connecting flight to another destination. It cannot operate a direct flight from Colombo to another destination (other than Dubai), a concession permitted only for the national carrier – SriLankan Airlines. Such a freedom (called the ‘Fifth Freedom Right’) is in most cases reserved for the national carrier of a country. However, in a desperate bid to get the costly Mattala airport, for which the Government is in debt to a Chinese bank (over $200 million loan), working to at least half capacity, the authorities have offered the “9 freedoms of the air” concession to make it more attractive to investors.

This means that any airline operating through Mattala can carry passengers direct to any destination in the world and in the same context bring passengers from any country (outside a home base) into Mattala. This is a significant development and needs to be managed carefully to ensure SriLankan Airlines, which is already losing customers when it pulls out of Frankfurt and Paris in November in addition to battling competition withcheaper flights from West Asian carriers, doesn’t get the short end of the stick. This is particularly so if some day flights at BIA are rescheduled to operate from Mattala.

This is also in the context where the government has, rightly and based on public opinion (also confirmed by a poll by the Business Times and its polling partner Research and Consultancy Bureau), decided to retain ownership of the airline and only allow a new manager. At the end of the day, the closure of the BIA needs to be managed carefully to ensure the least amount of congestion and inconvenience while the ‘open doors’ policy at Mattala also needs to be managed judiciously, so as not endanger SriLankan Airlines which is already “in the ‘doghouse”"

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I wonder who write these type of garbage in a broadsheet newspaper. No wonder SL press is a garbage. The writer says EK can carry pax only between DXB and CMB. EK has 5th plus freedom flights and operates to MLE, SIN and previosly to CGK
https://en.wikipedia.org/wiki/Freedoms_of_the_air.

Reporter says West Asian airline are operating cheaper flights. Well Reporter does not know ME3 are professionals and they are not responsible for mismanagement & overstaffed UL. Reporter also says to protect UL. For what ???government should protect the paying customer not overstaffed good for nothing company. Reporter points to public opinion of SL and says Government should retain the ownership and gives someone else to manage the airline. What a load of nonsense. again Government should get out of the aviation business government only duty is as a regulator and prtotect the paying customer and thats it. Finally 9th freedom mean any foreign airline operating domestic service. sorry dude no foreign carrier is interested in that business in SL