1. BA-303
HOSPATILITY MANAGEMENT
Turnaround of Srilankan Airlines
An Effort by:-
AnirudhBhandegbaonkar
PGDBA III Sem
G.S.B.A, Greater Noida
2. Introduction
Srilanka is one of the most popular destination for international
travelers .
Srilankan Airlines (SLA) is the national carrier of Srilanka
.
Srilankas tourism industry has suffered by two major problems
* The two decade old ethic conflict * The tsunami disaster in Dec.
2004.
SLA had run up losses amounting to Rs. 6.5bn as on march 31,
2001.
SLA lost almost half of its fleet due to :-
* The LTTE attack on Colombo airport in 2001.
In 1998 SLA has privatized.
Through the series of initiative taken by new management, SLA
achieved a turnaround and posted a profit.
3. History of Srilankan Airlines.
Aviation is Srilanka began with the establishment of Ceylon Airways
in 1947.
When it expanded to other destinations then its name was changed to
Air Ceylon's.
It ceased its operation in 1978.
Airlanka was setup by the government in 1979.
Two Boeing 707 were leased from Singapore airlines & flown in
Airlanka s bread name.
In 1980s the airlines increased the no. of destinations.
LTTE war drastically affects the Srilankan economy.
4. In april 1993 govt. of Srilanka Privatize the
Airlankan.
Govt. sold 40% its stake to Emirates Airlines (EA).
EA has got full management right for the next 10 years (up to 2008)
and also airlines catering operation.
Airlinka was renamed as Srilankan Airlines (SLA) in
1998.
5. Why SLA was in Trouble
Though there was 25% increase in revenues, the airlines losses
increased from Rs. 750mn. (as on March 2000) to Rs. 6.5bn(as on
March 31, 2001).
4 civilian aircraft were destroyed and two more badly damaged in
LTTE attack July 2002.
Many govt. cautioned their citizens against travelling to
Srilanka.
Increase fuel prices.
6. The premium for war risk insurance increased and SLA had
increase its fare.
Reduced tourist traffic.
9/11, 2001 attack on WTC in Newyork affected the global airline
industry & tourism.
7. Marketing Mix
Product :-
Govt. sold 40% stake to EA.
SLA expanded its fleet 14 new aircraft, with five A320 &
A330.
Value Added Services
Upgradation of skywards loyalty program.
Srilanka Exotica & Srilankan adventure.
Air taxi program.
Improved its services on the parameter link punctuality, in-flight
& entertainment.
8. Place
The first step was SLA cut down on its long distances flights and
operated on routes that
could be sustained with its remaining aircraft.
SLA focus on the far East, Middle East & three specific region
in Europe (France, Switzerland, UK).
Airline has dropped six of its profitable destinations.
SLA expanded its reach by code sharing flight with EA, Malaysian
Airlines, Oman Air & Swiss Air.
In May 2004 there was code sharing agreement with British
Midland.
9. People
Almost 1500 employees were laid off. In order to cut the
cost.
SLA s human resource development centre offered course to the
employees to upgrade the skills.
10. Promotion
SLA focused on promoting Colombo as a regional hub for bug and
tourist travel in South Asia .
Bounce Back Srilanka program and it was $ 320mn international
marketing & promotional campaign.
A separate website www.bouncebacksrilanka.org launched for
campaign.
SLTB, SLA & USAID launched a $ 3.1mn global advertising
campaign.
SLTB sponsored The World of Music, Arts & dance Festival an
international event.
11. SLA expanded Srilankan Holiday program and setup an office
in Mumbai, India.
SLA leveraged sporting events to attract tourists and promote its
brand.
It sponsored tri-nations cap in Srilanka 2005.
It also sponsored British Professional Surf Association
(BPSA).
SLA sponsored the airline tickets or prize money for these
competitions.
Srilanka is favorable for adventure sport and SLA has capitalized
in its promotional activities.
12. Process
It means the actual procedures mechanism and flow of activities by
which service is delivered .
The introduction of online ticket booking, payment, telecheck- in
and CRM help to make the process simple.
SLA has increased its destinations in China, India, Abu Dhabi,
Doha, Dubai.
13. Physical Evidence
The environment in which the service is delivered and the firm
& customer interact.
SLA improved the airport infrastructure.
SLA opened its new Serendib Lounge- A business class
lounge.
14. SAP Analysis
15. ETOP Analysis
16. STP of Srilankan Airlines
It segment on the basis of business class , economy class and
supersonic club.
Now it is targeting to Indian continent, Arabian Countries, Europe,
South East Asia, China etc.
Srilankan airlines positioned itself as a premium brand airline
that would compete best in the world with strong domestic and
international operations with unparallel and unique in-flight
entertainment options.
17. Marketing Strategy
Upgradation of Skywards Loyalty program
Srilankan Holidays Program
Air Taxi Program
Fly Smiles Program
18. The New Initiatives
Child Care
Sathkara Services
Transfer services
MICE
Baggage Tracing
Entertainment
In-flight Shopping
Reserve your meal
19. Awards
Best airlines in Central Asia and Indian subcontinent-
2001,2002,2003,2004
Most efficient operator of Airbus A330- 2002,2003
Friendliest cabin crew-2003
Best in-flight entertainment-2003,2004.
Skywards, SLAs frequent flyer program, won six awards including
best program of the year-2003.
8th place in global ranking list under best cabin staff category -
2004.
Second position in the best airline (South Asia) category -
2005.
Best Airline Turnaround of the year -2004 .
20. Challenges & Issues
Competitors
Increased fuel prices .
Political unrest.
Increased Aircraft prices.
Increase operating revenues.
Challenges at management level.
Tsunami and Cyclone prone area.
21. Worldwide Destinations
22. Suggestion
It is very difficult for any airlines in the world to revive back
such a difficult situation.
Srilankan airlines should keep eye on their competitors & their
offers.
They should cut their operating cost.
They should also focused on LCC.
They should provide concession to regular passengers.
