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SriLankan Airlines
- IATA/ICAO Code:
- UL/ALK
- Airline Type:
- Full Service Carrier
- Year Founded:
- 1972
- Alliance:
- oneworld
- CEO:
- Richard Nuttall
- Country:
- Sri Lanka
SriLankan Airlines’ senior management is set to appear before a parliamentary committee on April 25th to discuss the airline's performance. The country’s national carrier is expected to talk about, among other things, its plan to lease new aircraft for fleet renewal and expansion.
Summoned
SriLankan Airlines has been in the news lately for its plans to lease airplanes for future expansion program. While the airline has put forward its arguments about how bringing in new planes would help its business, it comes at a time when Sri Lanka is going through a never-before-seen economic crisis.
Now, a committee established by the Parliament of Sri Lanka called the Committee On Public Enterprises (COPE) will hold discussions with SriLankan’s senior management on Monday about the performance of the airline.
The chairman of COPE, Prof. Charitha Herath, is expected to question the airline about the bidding process for the lease of 21 aircraft and possibly the viability of such a move at times like these.
What is SriLankan’s plan?
Earlier this month, SriLankan Airlines announced its intention to lease up to 21 aircraft to support its long-term growth strategy. Deliveries could begin in December 2022 if lease agreements are signed successfully.
The airline currently has 24 airplanes – an all-Airbus mix of narrowbodies and widebodies. It has made a number of requests for proposal (RFPs) to lease up to 21 planes, some of which would cover the existing fleet type (A320 and A330 family of aircraft). The A350 has also been proposed for long-haul operations, and the A220 and Embraer 195 are being considered for regional services.
Around 60% of the deliveries would replace existing aircraft, and the remaining 40% would be used to grow the fleet to 35 aircraft by 2025, supporting the airline’s long-term expansion plans.
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SriLankan is already gearing up for a busy summer as restrictions around the world are being lifted. It is almost doubling the number of weekly flights to India to over 100 and increasing frequencies to other destinations in the Indian subcontinent, including Maldives and Lahore in Pakistan.
Daily flights have already been introduced to Kuala Lumpur, while daily flights will be operated to Melbourne by May and Bangkok and Jakarta by July of this year. The airline is also planning to match the weekly number of flights to Abu Dhabi, Riyadh, Muscat, and Seychelles in the Middle Eastern and African regions to its pre-pandemic level of operations.
Why the scrutiny?
Sri Lanka's foreign reserves have reduced by more than 70% in the last two years, dipping to $1.93 billion at the end of March. As such, the national airline’s decision to invest in more airplanes at a time when the country is facing acute shortages of fuel, food, medicines, and electricity hasn’t gone down well with many.
The meeting with COPE is a chance for SriLankan to justify the need for more aircraft and explain the financial aspect of such a move. SriLankan does help bring in significant foreign exchange for a country that depends heavily on tourism, but will that be enough of an argument?
Earlier this month, the airline's chairman, Asoka Pathirage, told Reuters,
"We are only looking at availability in the market. SriLankan Airlines will finance these leases and we will not depend on funds from the government. The airline has been making profits. We do have debt but we have to make money to repay them."
It remains to be seen whether the country’s parliamentary committee will be convinced of this argument.
What do you think about SriLankan Airline’s fleet renewal plans? Do share in the comment section below.
Source: Reuters