Sri Lanka state airlines to get $ 150 mn for further development: Budget 2015

Oct 24, 2014 (LBO) – Sri Lanka state airlines, SriLankan and Mihin air to get 150 million US dollars in year 2015 as the last phase for the development of its servicers, President said presenting a budget for 2015 at the parliament.

He said the two airlines have gained the capacity of handling 25 airlines catering to 44 countries with 90 destinations, through the capitalization and reform made over the past few years.
“The government believes the capital of the island are the government institutions and government assets.” President Mahinda Rajapaksa said.

He said 48 out of the total 58 government institutions have been turned to profitable establishment over the past years.

http://www.lankabusinessonline.com/news/sri-lanka-state-airlines-to-get-$-150-mn-for-further-development:-budget-2015/1571424731

I wish if he could name those 48 institutes.

First Guy wrote:
He said 48 out of the total 58 government institutions have been turned to profitable establishment over the past years.

When can these Airlines be self funding?

sashimaal wrote:When can these Airlines be self funding?

You mean issue shares ?

For that they have to reach profitable state. That is very difficult for a national carrier due to many factors. (other than popular mismanagement charges)

Return on capital invested is very low for an airline i.e. about 4-5 %
In contrast,  for pharmaceuticals it is 25%  and IT services is around  20%.

In related industries, when airlines ROIC is a very low 4% it is 44% for travel agents, 20% for GDS ticketing , 15% for freight forwarders and 6% for airports.

We have other reasons for bad performance in this industry.
1. We have low fuel efficient aging fleet.
2. When we dry lease air craft from outside we pump most of our revenue to other parties.
3. We have to compete with other airlines who get low cost funding and low cost fuel. Hence we can't increase ticket prices.

◙ Although we see a loss  , we have to consider indirect income  such as their efforts to  bringing more tourists to the country.

Low fuel prices and re-fleeting can  take SriLankan Airlines to sound position and ease affecting budget deficit in coming years

In 2013 SriLankan Airlines, the national carrier of Sri Lanka,  signed an MoU (memorandum of understanding) with Airbus Industries for six A330-300s and four A350-900s. The airline, an all Airbus operator, has chosen the highly reliable A330 and the latest generation A350 XWB (extra wide bodied) aircraft as part of its long-haul fleet renewal.

The delivery of new, fuel efficient, wide-body fleet  is scheduled  starting from Oct. 2014.
Arrival of six Airbus A330-300 begins from October 2014  and highly sophisticated , very high fuel efficient, bran new four Airbus A350-900 will arrive in 2017.

At the moment SriLankan has 6 high fuel burning A340-300   in its fleet , one time long haul favourites, quickly became obsolete due to arrival of fuel efficient 777 & A330s.
These 4 engined A340 s have been the headache for our airline due to its very low fuel efficiency and was one of the main reason for its high losses.  

Jet fuel accounts for 47% of SriLankan’s operating expenditure . In the financial year ended on 31 March 2013, SriLanka’s aircraft fuel cost was Rs. 63.75 billion.

They procure about 65% of the jet fuel locally at high cost (with the taxes and other levies) whereas some others operate from places where fuel is cheaper.  

Taking  fuel cost as at 337 USC/gal SriLankan  planned to become profitable in 2017 and at the moment the price has gone down to 270 range. If this price levels remains for next few years it will be an added bargain for our airline.



The first brand new A 330-343,   4R-ALL  is going to arrive this month as planned and it will start a new chapter in our air transport indusstry.  It is the 1564th of A330 production line and powered with two RR Trent 772B-60 engines.



-UL A330 computer generated image-

The brand new plane 4R-ALL was seen in France , took its inaugural test flight last month , on 4th September 2014.

The Brand new A350s for UL are in the assembly lines in France.

Thanks Chinwi fpr teh detailed explanation, +
Yes was referring to function without expecting the Govt to fund the Airlines.

chinwi wrote:

sashimaal wrote:When can these Airlines be self funding?

You mean issue shares ?

For that they have to reach profitable state. That is very difficult for a national carrier due to many factors. (other than popular mismanagement charges)

Return on capital invested is very low for an airline i.e. about 4-5 %
In contrast,  for pharmaceuticals it is 25%  and IT services is around  20%.

In related industries, when airlines ROIC is a very low 4% it is 44% for travel agents, 20% for GDS ticketing , 15% for freight forwarders and 6% for airports.

We have other reasons for bad performance in this industry.
1. We have low fuel efficient aging fleet.
2. When we dry lease air craft from outside we pump most of our revenue to other parties.
3. We have to compete with other airlines who get low cost funding and low cost fuel. Hence we can't increase ticket prices.

◙ Although we see a loss  , we have to consider indirect income  such as their efforts to  bringing more tourists to the country.

ශ්‍රී ලංකන් ගුවන් සේවයට A - 330 - 330 එයාර් බස්‌ යානයක්‌
Divaina, online Edition.


ශ්‍රී ලන්කන් ගුවන් සේවයට නවීන තාක්‍ෂණික යුගයක්‌ සනිටුහන් කරමින් නවීන තාක්‍ෂණික පහසුකම් සහිත A - 330 - 330 වර්ගයට අයත් එයාර් බස්‌ ගුවන් යානාවක්‌ ඊයේ 31 වැනිදා එක්‌විය. එම ගුවන් යානය බණ්‌ඩාරනායක ජාත්‍යන්තර ගුවන් තොටුපළ වෙත උදේ පැමිණි අවස්‌ථාවේ උත්කර්ෂවත් අන්දමින් පිළිගත් අයුරු.

සිවිල් ගුවන් සේවා නියෝජ්‍ය ඇමැති ගීතාංජන ගුණවර්ධන, ප්‍රධාන විධායක නිලධාරී කපිල චන්ද්‍රසේන, ශ්‍රී ලංකන්ගුවන් සේවයේ සභාපති නිශාන්ත වික්‍රමසිංහ යන මහත්වරුද එම අවස්‌ථාවට එක්‌ වූහ.

ඡායාරූප - නිශාන් එස්‌. ප්‍රියන්ත

The airline will configure its layout seating 297 passengers in two classes accommodating 28 in Business Class and 269 in Economy.

Travellers in Economy class too could now enjoy a similar range of comforts that include in-seat with audio-video on demand, access to PC power socket at seat, Wi-Fi connectivity and mood lighting

The aircraft introduces outstanding innovations in inflight entertainment (IFE) systems with Thales Avant Audio-Video on Demand (AVOD)

The new A330-300 (registration 4R-ALL) is to be utilised on the major Far East markets of Tokyo and Guangzhou in China with four flights per week to each destination by this December.




SriLankan is to take delivery of its second A330-300 by the end of this year, with the balance five aircraft to be inducted periodically throughout the year 2015.

The airline will also be acquiring eight A350-900s with SriLankan achieving a milestone being the first airline in South Asia to acquire this new generation of aircraft, with three due to be delivered in 2016 and a fourth in 2017.
The balance A350s are to be inducted to the airlines’ fleet by 2020.

The ageing fleet was last replaced after the attack.

UL is stretching itself with single stop long haul flights to Europe/China.