BA-303 HOSPATILITY MANAGEMENT Turnaround of Srilankan Airlines An Effort by:- AnirudhBhandegbaonkar PGDBA III Sem G.S.B.A, Greater Noida
Introduction Srilanka is one of the most popular destination for international travelers . Srilankan Airlines (SLA) is the national carrier of Srilanka . Srilanka’s 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 it’s 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.
History of Srilankan Airlines. Aviation is Srilanka began with the establishment of Ceylon Airways in 1947. When it expanded to other destinations then it’s name was changed to Air Ceylon's. It ceased it’s 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 1980’s the airlines increased the no. of destinations. LTTE war drastically affects the Srilankan economy.
In april 1993 govt. of Srilanka Privatize the Airlankan. Govt. sold 40% it’s 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.
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.
The premium for war risk insurance increased and SLA had increase it’s fare. Reduced tourist traffic. 9/11, 2001 attack on WTC in Newyork affected the global airline industry & tourism.
Marketing Mix Product :- Govt. sold 40% stake to EA. SLA expanded it’s fleet 14 new aircraft, with five A320 & A330. Value Added Services Upgradation of skywards loyalty program. “Srilanka Exotica” & Srilankan adventure. Air taxi program. Improved it’s services on the parameter link punctuality, in-flight & entertainment.
Place The first step was SLA cut down on it’s long distances flights and operated on routes that could be sustained with it’s 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.
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.
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.
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.
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.
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.
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.
Marketing Strategy Upgradation of ‘Skywards’ Loyalty program ‘Srilankan Holidays’ Program ‘Air Taxi’ Program Fly Smiles Program
The New Initiatives Child Care Sathkara Services Transfer services MICE Baggage Tracing Entertainment In-flight Shopping Reserve your meal
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, SLA’s 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 .
Challenges & Issues Competitors Increased fuel prices . Political unrest. Increased Aircraft prices. Increase operating revenues. Challenges at management level. Tsunami and Cyclone prone area.
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.