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    Vol. 13 No. 45                     THE AIR CARGO NEWS THOUGHT LEADER                          Friday May 23, 2014

 

SriLankan Looking Upward Is Chamara

When SriLankan Airlines was inducted as an oneworld member some time ago at Sri Lanka’s second international airport—the $200 million China Exim Bank-funded Mattala Rajapaksa International Airport (MRIA)—there was one person who had more than a smile on his face.
   He was Chamara Ranasinghe, Head of Cargo at SriLankan Airlines. The Mattala airport, named after the Sri Lanka President Mahinda Rajapaksa, not only has SriLankan Cargo but also Air Arabia and flyDubai, and now with the oneworld membership hopes to attract at least some of the other 14 members. While oneworld member British Airways would most likely start services to MRIA, others like Emirates Airlines, Korean Airways, Sichuan Airlines, and Etihad Airways have shown interest.
   Contributing around 13 percent of the airline’s total network revenue through passenger belly capacity, transshipment is a major source of earnings for SriLankan Cargo—hence the large smile on Ranasinghe’s face. He pointed out that almost 90 percent of the transshipments through Colombo hub is handled and moved by SriLankan. In fact, the average handled volume of transshipments per annum is 50,000 metric tonnes, which is approximately 25 percent of the total handled (200,000 mts/annum).
   The MRIA would be an added gateway for SriLankan Cargo. The cargo arm of SriLankan Airlines is responsible for the 5,000-sq. m. cargo facility at Mattala, with a handling capacity of 60,000 metric tonnes. It also has storage facilities for dangerous goods, temperature regulated goods, and valuable cargo.
   At Bandaranaike International Airport, Colombo, SriLankan Cargo uses its unique position in the Indian Ocean by bridging the commercial centers of East and West. In 2013, it saw a hike in both tonnage and revenue. Exports out of Colombo saw an increase of 33 percent in tonnage compared to 2012. That was an achievement indeed, since the competition came from the likes of carriers that operated freighters like Qatar Airways, Etihad, and Cathay Pacific.
   Ranasinghe also pointed out that Sri Lanka, one of the five fastest growing international freight markets over the 2011-2016 period, according to a forecast released by IATA, would see an average growth rate of 8.7 percent. The key markets that SriLankan Cargo would serve would be the USA, UK, Germany, France, and the Middle East. It is to these markets that SriLankan Airlines offers connectivity with direct flights, giving it a strategic advantage.
   However, one of the major challenges that SriLankan faces comes from the payload restrictions on the Europe-bound routes. In fact, Ranasinghe mentioned that the payload problems had been going on for quite a few years, but SriLankan had tied up a number of BSAs (block space agreements) with carriers to Europe and beyond via the Middle East. To overcome the capacity problem, the carrier had employed a dynamic pricing strategy and now with the membership of the oneworld alliance, it would provide ample opportunities for the airline globally. Also, SriLankan had embarked on a re-fleeting program by adding A330-300s and A350-900 aircraft to replace the old A340-300s and A330-200s.Chamara Ranasinghe, Head of Cargo, SriLankan Airlines, spoke about his plans to effectively use Mattala airport for cargo operations.
   “SriLankan Cargo recorded a revenue of USD 96 million in 2013, which is inclusive of PO Mail for the financial year 2013-14. The airline carried 94,410 metric tonnes of cargo for the said year. Indeed, it is a remarkable achievement taking into consideration an overall 82 percent passenger cabin factor and severe market conditions.
   “The main contributory factors for this achievement: customer satisfaction by offering a personalized service and high reliability coupled with aggressive marketing in the niche markets.
   In terms of maximum tonnages, of the 94,410 total carried metric tonnes, “garments accounts for almost 50 per cent of the total tonnage ex-CMB with the rest of tonnage being accounted for by perishables, courier cargo, etc,” said Mr. Ranasinghe.
   In the past, the cargo community spoke about Sri Lanka becoming a full-scale cargo hub, and with Mattala airport having finally become a reality, Chamara Ranasinghe is confident Sri Lanka will fulfill its caro destiny, even if that is in a supporting role.
   “Sri Lanka is already the hub for SriLankan Airlines Cargo. We are yet to see customer airlines making use of this facility in order to make Katunayake (Colombo) a full-scale hub in the region.
   “SriLankan Cargo being the sole ground handler is continuously making preparations to offer more handling facilities with updated equipment and IT systems.
   “Mattala Airport will be mainly focused for cargo freighter operations, in addition to currently belly capacity on the line flights. The Colombo airport will continue to be the main hub with almost 90 percent of the transshipment being moved by SriLankan.”
   Mr. Ranasinghe assures us that, next to China, “India is a key market and revenue contributor for SriLankan Cargo. In the last financial year, India was able to produce a tonnage of 15,000 metric tonnes with planned increase of 20 percent for the current financial year.”
   With several older aircraft scheduled to be phased out during this year and next, and no news of conversions, SriLankan has no plans “for inducting dedicated freighters, we have however tied up with FitsAir for an exclusive MD82 freighter to be dedicated to SriLankan Cargo,” says Mr. Ranasinghe. “With this MD82 freighter operation, we will be expanding current operations to Bangladesh and most parts of India, a noted key sector for SriLankan Cargo.”
   Other technological upgrades, however, are on the menu for SriLankan.
   “Steps have been taken to upgrade the current Skychain system with additional features in order to optimize the cargo revenue and allow for seamless cargo operations. We have also tied up with Techwings to utilize their Revenue Plus Budget tool in order to generate incremental revenue.
   “Currently, SriLankan Cargo has undertaken to launch E-AWBs in Sri Lanka. Already six percent of the shipments on SriLankan Airlines are being electronically handled and we have targeted this to be 25 percent by the end of this year. This will be a huge advantage for all the stakeholders in the air freight business in Sri Lanka.
    “2014 is going to be a much more challenging year for SriLankan, with an 8 percent increase on the revenue budget despite minimal favorable market variances over the previous financial year,” said Mr. Ranasinghe.

Tirthankar Ghosh




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