Sri Lanka Aviation

UL gets 6 A330-300 & 7 A350-900

The Cabinet has approved two and half billion US dollars for a re-fleeting programme of SriLankan Airlines.

The programme, approved on April 18, entails the purchase of six Airbus A330-300 aircraft with Rolls Royce Trent engines. Also to be purchased are four state-of-the-art Airbus A350-900 with Rolls Royce XWB engines.



6 - A330-300




7 - A350-900

Such a major trade deal was given the green light when the cabinet met for its weekly meeting on April 19. This was when it was decided to offer a multi-billion dollar deal to Air Bus Industrie with British-built Rolls Royce engines in a major re-fleeting for the national carrier, the fledgling SriLankan Airlines. According to the annual report of the Central Bank for 2012, released just last week, “The total revenue of SLA (SriLankan Airlines) increased by 36.1 per cent to Rs. 107.4 billion, while the operating expenditure increased by 30.6 per cent to Rs. 128 billion resulting in an operating loss of Rs. 20.5 billion. Emerging competition from other international airlines and the volatility of fuel prices has adversely affected the profitability of SLA. Mihin Lanka recorded an operating loss of Rs. 1 billion in 2012 compared to the operating loss of Rs. 455.3 million incurred in 2011.”

Mounting SriLankan Airlines losses and a financial crisis prompting an electricity price hike notwithstanding, the Cabinet last Thursday approved a request by the Minister of Civil Aviation, for US$ 80 million (Rs 10.1 billion). It came on a recommendation made by Civil Aviation Minister Priyankara Jayaratne. The amount is just a part of the monies needed for SriLankan Airlines to purchase six Airbus A 330 aircraft powered by Rolls Royce Trent 700 engines. SriLankan Airlines will also buy four A350-900 aircraft powered by Rolls Royce Trent engines. In addition, three more A 350-900 will be obtained on lease by Sri Lankan Airlines. Minister Jayaratne has not told cabinet how the moneys required for the deal would be obtained nor explained how the US$80 million for which he obtained approval would be disbursed.

According to Jayaratne, the wide-body fleet of SriLankan Airlines which consist of 13 aircraft (six A-340s and seven A 330-200s) need to be replaced at the end of their respective lease terms which fall between 2014 and 2019. The age of the wide-body fleet, he has said, at present ranges from 13 to 18 years for the A-340s and from nine to 13 years for the A 330 aircraft. He has said that SriLankan Airlines requires new aircraft to replace the current wide-body fleet and this cannot be timed with the return of all existing wide-body aircraft to lessors upon expiry of lease terms.

The Board of Directors of Sri Lankan Airlines had appointed a team headed by its Chief Executive Officer Kapila Chandrasena to “provide expert advice” to the internal team in the selection process. Others included the Chief Operations Officer, Head of Finance and the Head of Engineering. A person described as an�“External Consultant” had assisted the team. They reviewed offers from the US based company Boeing which offered its new generation ‘Dreamliner’ either with Rolls Royce or General Electric engines.

Now that the decks are cleared for the Commonwealth Heads of Government meeting in November, arrangements will no doubt be stepped up from this week. That is notwithstanding a situation where the Government is cash strapped and is forced to raise electricity rates. Now, billions will have to be found to procure new aircraft for Sri Lankan Airlines. The critical question is whether the taxpayer would have to pay more for different goods and services in the weeks and months to come.

The aircraft are almost certainly going to be leased which means there shouldnt be such a large capital outlay as described. And anyway they have shown the list prices. The question at hand is should the government keep propping up an airline it quite clearly cannot maintain profitably. As someone said before, give Mahinda his own plane and eithe privatise or shut it down. Its likley to be the cheaper option.

Needless to say, I am sure there must be some middlman/men who are getting some hefty kickbacks.

http://www.lankabusinessonline.com/n...ses/1532896203
State-run SriLankan Airlines will acquire six Airbus A350-900 and seven A330-300 aircraft to upgrade its product and cut costs starting from October 2014, chief executive Kapila Chandrasena said.

SriLankan will acquire 10 aircraft from Airbus Industries through a mix of operating and finance leases in a deal which has a 'present value' of 1.2 billion US dollars and another three from an aircraft leasing firm, he said.

Cabinet approval has been given to sign a memorandum of understanding with Airbus for 10 purchase options and the first aircraft is expected to arrive starting from October 2014, he said.

Good choice of A330-300, it is a worthy successor to the A340-300s and will save fuel too.

Havent officially announced yet..

A330-300 range is around 12000 km which should be adequate to reach LHR from CMB.

The same article quotes "Airbus will also give 31 million US dollars worth tools, equipment and training to set up an aircraft maintenance and repair facility (MRO) for the new types."

It will make sense to open one of the first MRO facility for A35X types in the Asian region, thereby attracting new business.

UL going with Airbus also makes sense, but I hope they will negotiate some sensible pricing.

Hopefully this will not end up being one the most expensive mistake GoSL makes, trying to keep UL on life support, rather than pulling the plug!

You got conflicting information from two different sources..

Following article also says 6x A333 + 4x A359s. Best to wait till Airbus confirms though!

Personally I feel that buying Boeing aircrafts would be a better option....and they should also consider getting 2 to 4 small aircraft such as the ATR-72 for domestic flights and short haul international flights

Agree with the ATR's for domestic and short haul services, but switching to Boeing would incur significant crew and maintenance retraining costs

Good move, does not make sense commercially to have 50-50 Airbus and Boeings, would cost a lot more on maintenance and staff training..

SriLankan Airlines to get 13 Airbus aircraft

6 A330s & 7 A350s

SriLankan Airlines will acquire seven Airbus A350-900 & six A330-300 aircraft to upgrade its product and cut costs starting from October 2014, chief executive Kapila Chandrasena said.

SriLankan will acquire 10 aircraft from Airbus through a mix of operating and finance leases in a deal which has a 'present value' of 1.2 billion US dollars and another three from an aircraft leasing firm, he said.

Cabinet approval has been given to sign a memorandum of understanding with Airbus for 10 purchase options and the first aircraft is expected to arrive starting from October 2014, he said.

The aircraft are to be delivered over 7 years.

In the first phase six Airbus A340 aircraft which are up to 18 to 16 years old will be replaced by A330-300 aircraft.

Seven A330-200 aircraft which are around 13 to 16 years old will be replaced starting from 2017 with A350-900 aircraft. Three will come from an aviation leasing firm as there were no manufacturing slots available at Airbus in that period.

The balance four A350s will be acquired from Airbus Industries starting from 2019.

SriLankan was aiming to maintain a fleet with an average age of about five years. SriLankan has already modernized its A320 narrow body fleet of eight aircraft.

With several very old aircraft in the fleet, the airline could not give the same level of service to all passengers and operating costs were also high.

"If you look at our configurations we could not standardize service," Chandrasena said.

"With the new aircraft everyone will get the same experience.

"Fuel is 50 percent of our operating costs. With newer aircraft fuel is about 40 percent. That is a huge quantum of savings."

Even after accounting for acquisition costs, a net gain of 7 to 10 percent could be made with new aircraft, he said.

The aircraft will be financed with a mixture of finance and operating leases. Industry practice was to have about 30 percent on finance leases, Chandrasena said.

Last year the airline made an operating loss of 20.5 billion rupees, according to published data.

The new aircraft would also be able to carry a full load of passengers without sacrificing cargo over long haul destinations, he said.

Airbus will also give 31 million US dollars worth tools, equipment and training to set up an aircraft maintenance and repair facility (MRO) for the new types.

"We are also targeting the regional airlines that will be an additional revenue stream for SriLankan as well."

Sri Lankan Engineering is already servicing A320 aircraft for a number of regional airlines at its facility in Katunayake. A second facility is to be set up in Mattala.

http://www.lankabusinessonline.com/n...50s/1532896203

Fuel is 50 percent of our operating costs. With newer aircraft fuel is about 40 percent. That is a huge quantum of savings."

What a joke??

So this 10 % saving make everything fine according to Mr Chandrasena.