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SriLankan air taxi grounded as a loss, flies anew with Cinnamon Air
View(s):By Namini Wijedasa
SriLankan Airlines has stopped its unprofitable air taxi operation, just 28 months after it was re-launched amidst much fanfare.
“We will not operate our own aircraft,” confirmed SriLankan’s Chief Marketing Officer G.T. Jeyaseelan. The company’s costly lease agreement with the Canadian Kenn Borek Air for float planes, lapsed last month, and was not renewed.
The airline is in negotiations to operate a code-share with a private firm, Cinnamon Air, as an alternative. Cinnamon Air has three aircraft, all Cessna 8-seater float planes. Under the agreement, which is likely to be signed within a few days, one of these will sport SriLankan Airlines livery.
Cinnamon Air is managed by Saffron Aviation (Pvt) Ltd, a joint venture between MMBL Leisure Holdings (Pvt) Ltd, John Keells Holdings PLC (JKH) and Phoenix Ventures Ltd. SriLankan Airlines 2011-12 Annual Report admits that its air taxi service was a “loss-making operation”.
The float planes were reintroduced in December 2010, after a lapse of several years, caused by the unstable security situation. Mr. Jeyaseelan said the new arrangement with Cinnamon Air was “an opportunity to work it (air taxi service) better”.
There had been insufficient bookings from international markets to make SriLankan air taxis sustainable on their own. “We felt overseas tour operators were not keen to sell the air taxi product,” Mr. Jeyaseelan observed. “Instead of making the air taxi an integral part of their packages, they made it an option. To operate the service, we have to sell this product in the international market.”
“In the Maldives, the air taxi product is paid for by the resorts and not the passengers.”
Other industry sources said SriLankan’s schedule had not been sufficiently structured to allow air taxi departures to coincide with international arrivals. “It also required a road trip to get to the air taxi base,” they said. “Meanwhile, the aircraft they leased are in pretty high demand the world over, so they would have paid steeply for the leases. Sustaining the operation was a problem.”
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