SriLankan Airlines has a lengthy historical past with India, particularly with cities within the south. It started companies as early as 1979, and has now operated in Chennai for over 44 years. In 2007, it turned the primary worldwide provider to function 100 flights a week to India.
Despite a number of setbacks, particularly these confronted throughout the Covid-19 pandemic and the nation’s financial disaster, SriLankan Airlines continues to function in 9 Indian cities, and now, has plans to broaden.Â
This is maybe in step with the nation’s imaginative and prescient: in October, in an effort to spice up tourism, the Sri Lankan Cabinet authorized the issuing of free vacationer visas to vacationers from India as a part of a pilot challenge, till March 31, 2024. India is Sri Lanka’s high supply market, and Indians constituted 20% of all vacationer arrivals to the island nation this yr, as of September.
In a chat with The Hindu, SriLankan Airlines’ CEO, Richard Nuttall, whose expertise within the airline trade spans three a long time and 5 continents, talks in regards to the airline’s technique for India, the present challenges it faces and the roadmap forward. Edited excerpts
What are your plans with relation to India?Â
India is the actual sport in the mean time. We carry three completely different teams of passengers: the Sri Lankan traveller, whether or not that’s the Sri Lankan in Sri Lanka or the diaspora; we now have inbound tourism to the nation after which we now have India, and India is a massive opportunity.Â
There’s three elements to the story: to begin with, we’re the closest worldwide seaside vacation spot to India. India is the most important supply of vacationers for Sri Lanka in the mean time, however the actuality is, the quantity is peanuts. We get 20% extra vacationers from India, which has 1.4 billion individuals and is subsequent door, than we do from the UK that is 11 hours flying time away: we must always be getting 10 occasions that quantity.
The second factor about India is that it is essentially the most populous nation on the planet. The financial system is rising quick and in broad quantity phrases, India has half a business plane per million individuals. China has three; even in Sri Lanka, we now have one, and the U.S. has 30. Now, the truth that we now have extra in Sri Lanka than India and we now have no home market – tells you ways huge the opportunity in India is.
When you have a look at India, the massive hubs in India are Mumbai and Delhi, west and north. And you’ve got all of these large cities that perhaps have LCC (low-cost provider) feed to close locations, however don’t have lengthy haul feed. Now, if you wish to fly from Chennai to Australia and there’s no direct flight, do you wish to fly again to Mumbai? Or do you wish to go to Colombo or perhaps some place else? The level is that we’re completely positioned for all of these cities. We already fly to 9 cities in India and we’ll add extra.
And the opposite benefit we now have is that due to cultural similarities, Sri Lankan crew are usually significantly better at offering service to Indians than perhaps different nationalities.
So what it means is the opportunity is large.
What are the markets you’re concentrating on? You have a sturdy presence in south India already.
We have a sturdy presence in southern India. I feel the obvious subsequent vacation spot is Ahmedabad. [It’s a] huge market, and an underserved market and a comparatively rich market. So that’s in all probability the subsequent huge one. But there are different cities that we’ve flown earlier than and different locations that if we will broaden the narrow-body fleet, I can see as being [big]. We had been the primary worldwide airline to [do] 100 flights a week to India. Now we’re again at about 60-70 as a result of we don’t have plane. But we ought to be again inside 5 years. I might like to be at 200 if we might get the plane in to offer the connectivity. One can’t be too exact on years as a result of it’s going to depend upon how briskly you may get plane and whether or not we privatize or not will make a distinction, however that is the objective.
What are the segments you’re looking at, with tourism being one?Â
Tourism to right here, however the huge opportunity is the connecting visitors. We can carry connecting visitors to Thailand, Malaysia, Singapore, however a lot of these locations can have additionally direct flights to many cities, so we are going to carry that opportunistically. But the larger opportunity is barely longer haul. So locations like Australia, Japan, the locations the place you aren’t going to have direct flights from Chennai, Cochin. And so whenever you’re that connecting visitors, it is mainly all segments on lengthy haul. It may be individuals going for work. In Australia, there’s a lot of VFR (visiting pals and kinfolk) and pupil visitors. Obviously there’s tourism. And it might probably work each methods. It may be individuals from these international locations who’re additionally coming to India for enterprise.
Tell me a little about your fleet.
With the fleet, we do have some challenges. Some of them are international challenges and a few of them are a little bit to do with the nation’s state of affairs. Because we don’t have a huge stability sheet and since the nation doesn’t have a lot of {dollars}, we will’t go to the market and put in an order for a lot of new plane. So basically what we do is that we lease used plane. The actuality is that whereas we do get second-hand plane, our common fleet age is very a lot in step with international averages.Â
The challenges that we now have with the fleet are twofold. One is that [with] a variety of these plane, their lease completed throughout COVID, and we now have a couple extra that completed as a result of they received to finish of life. So we’re now attempting to look for new plane or new second-hand plane. But if we had accomplished this early final yr once we first needed to, there have been many plane accessible at very low charges. Unfortunately with what occurred within the nation [economic crisis], no person would have given us an plane at the moment. So we’re now doing it this yr. But when you look now, all people is wanting for plane. So globally, if you wish to order a new plane from Boeing or Airbus or whoever, the ready time is perhaps 4 years or extra. So the shortage of plane and engines is a international problem.
Then we now have the native problem that when there usually are not that many plane accessible, the lessors that know us are very joyful to take care of us. But people who don’t know us, they’re saying, properly, I’ve six airways wanting for my plane. Am I going to place it in Sri Lanka that’s simply been via an financial [crisis] or nonetheless going via an IMF course of? Or am I going to place it into someplace that’s a mature financial system in Asia or someplace in Europe? So what it means is that it makes it tougher for us to get the plane.
At the tip of the day, we are actually flying 17/18 plane the place pre-COVID we had been flying 27. In a great world, given the place we’re situated subsequent to India, you understand we ought to be [at] 35 now and seeking to be 50 in, three or 4 years and perhaps extra.
The attention-grabbing dynamic that’s occurring is clearly the nation is going via an IMF course of and so they wish to privatise State-owned entities, of which we’re one. The first a part of that course of is restructuring the debt and we now have a lot of debt that is nothing to do with the airline at this time, which is earning money. But it’s a lot of debt, it’s at excessive rates of interest. Now if we will restructure it, then we will steadily begin to broaden. But it will likely be a a lot slower course of. If we’re capable of privatise and we get the precise investor with not large quantities of cash in aviation phrases, however affordable pockets, then we must always be capable of broaden hopefully a lot quicker.Â
If you’re speaking about connecting visitors in India, will your focus be on smaller cities?
I feel we’ll have the connections all over the place, however the cities which have the most important markets with the least service would be the ones the place we do greatest. The actuality is that we do very properly to Australia now out of Delhi and Mumbai as a result of there aren’t direct flights in the mean time. Direct flights are going to come back, so that can have an effect on us on that market. So then we turn into, perhaps the second participant. So we’ll nonetheless get some market from there, perhaps not fairly as a lot, however once more there are all of the cities in India, and when you consider the scale of India and the quantity of people that wish to go…
(The author was not too long ago in Sri Lanka on the invitation of SriLankan Airlines)
