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SriLankan Airlines reversing plans to discontinue or reduce European flights

Feb 21, 2016

COLOMBO, Sri Lanka - SriLankan Airlines, looking for ways to cut huge losses and debt accumulated during the last regime, this week decided to continue flying to key European destinations, barring Rome, reversing earlier plans to discontinue or reduce these flights. The move drew welcome relief from all sections of the travel industry. Separately the airline, according to its main top official, was in serious discussions with lessors on how and whether it was possible to exit from a contract to purchase four Airbus 350s.

Ajit Dias, chairman of the national carrier, told the Business Times that the government has decided not to proceed with the purchase order. When asked whether this means the airline won’t be buying the four aircraft, he said: “It all depends on the negotiations our team is having with lessors since contracts have already been signed and to ascertain what needs to be done (to exit),” he said. Prime Minister Ranil Wickremesinghe told Parliament last week that though a deposit has not been paid for any Airbus 350, any default means a penalty payment of US$12 million.

With reference to uncertainty over flights to the European sector, the airline had been considering pulling out of Europe barring the UK but had been under pressure from the tourism industry not to do so. Other than London, most European sectors were not bringing the required returns, other sources at the national airline said. According to this week’s, long-awaited decision, the airline is discontinuing flights to Rome from May but will continue flying to London, Paris and Frankfurt, the latter of which would have a fifth weekly flight added from July.

Mr. Dias said the new travel frequencies have been prepared with the existing fleet. “We have not accounted for any new Airbus 350s (in this computation),” he said. He denied reports that the airline was in discussions with others on a possible management contract, similar to the earlier one with Emirates but noted that the airline has been talking to other airlines on code sharing arrangements (to cover sectors that the airline doesn’t fly to). ”We are delighted,” said Hiran Cooray, President of the Tourist Hotels Association of Sri Lanka (THASL) when asked to comment on the route changes.

“This is a very positive move and shows the Government is listening to the industry. They have listened to our pleas.” Travel Agents Association of Sri Lanka (TAASL) President Devindre Seneratne said they were pleased that Frankfurt has been consolidated with an extra flight too and Paris will continue to operate as usual. ”The French market has become one of the most important markets and grown to be one of the most wanted markets for Sri Lanka Tourism especially when Sri Lanka is considered one of the safer and better destinations to travel,” he said.

Also welcoming the move, S. Paramanathan, Managing Director of Atlas Lanka Travels, said arrivals were rising even though it’s the off season and hence this was not the best time to reduce flights to Europe. According to the airline’s 2014/15 annual report, in order to replace the wide-body fleet, in June 2013, the company entered into Purchase Agreements with Airbus for the purchase of six A330-300 and four A350-900 aircraft for delivery between 2014 to 2021 and also entered into lease agreements to take delivery of further three new A350-900 aircraft in 2016.

SriLankan Airlines reversing plans to discontinue or reduce European flights

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