Melbourne; Kunming, China on the cards
SriLankan Airlines is gearing to go to Africa, in a bid to leverage on Chinese transit passengers via Colombo, officials said.
“We’re looking to go to Africa primarily to support the Chinese transit passengers there,” Kapila Chandrasena, CEO SriLankan told the Business Times. He said currently the national carrier is doing the analysis and modelling on routes to Africa. “We’ll be taking a decision on this by next winter,” he said.
Kapila Chandrasena, CEO SriLankan. Pic by Mangala Weerasekera
He said they are eyeing the broader Asian region for further expansion. “We want to expand in China and Australia ‘rapidly,” he said, adding that December will see them fly to Kunming, capital of Yunnan Province, China and Melbourne is on the cards. According to the IATA (International Air Transport Association), the highest growth in the air transport will be centered mainly around the Asia Pacific region, fuelled by India and China. “This is why we aim our future expansions in the Asian region,” Mr. Chandrasena said, reiterating that this move will fetch critical mass into the airline.
He added that more than a year since last June, SriLankan has seen over a 10 per cent in yield. “At the same time we also saw higher budgeted expense growth due to high fuel cost, but the new wide bodied aircraft will facilitate fuel efficiency,” he said. Stressing that the biggest necessity now is to replace A340s and A200s as they’re ending their airframe life, Mr. Chandrasena said this is why the airline will source six A330-300s and four A350-900s in the next 10 years. “We chose the A330 and the latest generation A350 XWB aircraft as part of our long-haul fleet renewal. Three more A350s are to be sourced from the leasing market.” He said the carrier is awaiting the first A330-300s from October 2014 onwards and will phase out the 18-year-old and fuel inefficient A340s.
SriLankan raised a syndicated loan of US$150 million from a consortium of banks led by Standard Chartered Bank with a government guarantee for $50 million which was utilised to settle the outstanding loan of $112.5 million obtained from Mashreq Bank”In addtion we raised $ 175 million on a bond issue on a 5-year coupon rate of 5.3 per cent.” Mr. Chandresena said that the coupon rate they got at 5.3 per cent was the lowest obtained by a government entity. “It was 17 times oversubscribed,” he said, adding that next time when they raise international funding, the airline aims to go on its own steam without a government guarantee. “As we continually expand, we may return to the international market for re-fleeting,” he added.