Analysing Challenges and Critical Success Factors<br />The Srilankan Airline Industry<br />Presented by<br />Saatviga S.<b...
Road Map<br />Vision & Mission<br />Introduction<br />Ten Year Review<br />Key Performance Indicators<br />The Business Tu...
Vision and Mission<br />Vision<br />“To be the most preferred airline in Asia ”<br />Mission<br />We are in the air transp...
Introduction<br />Srilankan Airlines began operations in 1979 as the National Carrier of Sri Lanka<br />Serves 45 destinat...
Introduction<br />Subsidiary - SriLankan Catering (Pvt) Ltd. is a fully owned subsidiary of SriLankan Airlines.<br />Workf...
Ten Year Review (2000 – 2009)<br />
Year 2008-2009 Under Review<br />Challenges faced<br />Arising global fuel costs<br />Struggle of the national tourism ind...
Total Loss in the Year<br />Huge Challenges Faced<br />
Key Performance Indicators<br />Fuel Surcharges by Competitors<br />Global Economy<br />Passenger Revenues (decreased by 5...
The Business Turnaround Plan<br /><ul><li>Key Aspects of the Plan - “Earn more, spend less and waste not”. </li></ul>Restr...
Challenges Faced<br />Optimising Revenue<br />Improving Service Delivery<br />Enhancing Srilankan Engineering<br />Increas...
Optimising Revenue<br />New services to Rome utilizing the market opportunities   in Italy<br />Temporary Suspension of Lo...
Optimising Revenue<br />“Srilankan Holidays” teamed up with Singapore , Thailand and Malaysia<br />Business Class range an...
Improving Service Delivery<br />Emphasis on Inflight Service<br />Training of cabin crew and increasing the no of instruct...
Improving Service Delivery<br />Recruitment of new Chinese passenger assistants for Beijing service<br />SMS alerts on fli...
Enhancing Srilankan Engineering<br />Marketing programmes to increase awareness of SriLankan Engineering’s capabilities as...
Increasing Fuel Efficiency<br />Use of diesel-operated Ground Power Units to power internal systems and air-conditioning o...
Increasing Productivity<br />Continuing to review company structure for greater effectiveness and productivity<br />Custom...
Technology Requirements<br />Consolidation of Data centers in Colombo and Katunayake<br />Maximizing the utilisation of ex...
Some World’s Successful Airlines<br />Singapore Airlines<br />Cathay-Pacific Airways<br />Qatar Airways<br />Thai Airways<...
Singapore Airlines- Strategies Used<br />Fully branded product/service differentiation strategy<br />First to introduce ho...
Singapore Airlines- Strategies Used<br /><ul><li>The famous Singapore Girl</li></ul>Rigorous training programs for the cab...
Emirates Airlines – Strategies Used<br />Operates wide-body aircraft and flies mostly long haul<br />lowers its per-seat-m...
Emirates Airlines – Strategies Used<br />Sporting event sponsorships  for promoting brand awareness<br />major events in f...
Thai Airways – Strategies Used<br />User-friendly website to book and confirm flight reservations<br />Development of cate...
Thai Airways - Strategies Used<br />Implementation of the Customer Relationship Management  system<br />Automated Self Ser...
Factors Influencing Success<br />People<br />Service Product/Promotions<br />Route System<br />Fleet Management<br />Reven...
References<br />Srilankan Airlines Annual Report 2008/2009<br />	http://www.srilankan.aero/aboutus/SriLankan_Airlines_Annu...
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Srilankan Airline Industry - Analysing Challenges and Critical Success Factors

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Srilankan Airline Industry - Analysing Challenges and Critical Success Factors

  1. 1. Analysing Challenges and Critical Success Factors<br />The Srilankan Airline Industry<br />Presented by<br />Saatviga S.<br />
  2. 2. Road Map<br />Vision & Mission<br />Introduction<br />Ten Year Review<br />Key Performance Indicators<br />The Business Turnaround Plan<br />Challenges Faced<br />World’s Successful Airlines and Strategies<br />Factors Influencing Success<br />
  3. 3. Vision and Mission<br />Vision<br />“To be the most preferred airline in Asia ”<br />Mission<br />We are in the air transportation business. We provide our customers with a reliable and pleasant travel experience. We provide our business partners with a variety of innovative, professional and mutually profitable services. We meet Shareholder expectations of profitably marketing Sri Lanka and contributing towards the well-being of Society. We are a competent, proactive and diligent team. Our contribution is recognized and rewarded.<br />
  4. 4. Introduction<br />Srilankan Airlines began operations in 1979 as the National Carrier of Sri Lanka<br />Serves 45 destinations in 25 countries in Europe, the Middle East, South Asia, Southeast Asia, and the Far East.<br />Codeshare partnerships with bmi (formerly British Midland), Etihad Airways and Malaysian Airlines<br />Shareholders <br />Government of Sri Lanka - 51.05% <br />Emirates Airline - 43.63% <br />Employees - 5.32%<br />
  5. 5. Introduction<br />Subsidiary - SriLankan Catering (Pvt) Ltd. is a fully owned subsidiary of SriLankan Airlines.<br />Workforce - More than 5000 employees in Sri Lanka and overseas<br />In-flight comforts – Business and Economy Class Seats <br />FlySmiles Flyer Program<br />Srilankan Cargo<br />Srilankan Engineering – Technical Arm<br />Ground Services<br />
  6. 6. Ten Year Review (2000 – 2009)<br />
  7. 7. Year 2008-2009 Under Review<br />Challenges faced<br />Arising global fuel costs<br />Struggle of the national tourism industry to survive in a wartime scenario<br />High interest rates<br />Major transition in management<br />Increased competition from subsidised airlines<br />Dropped prices fighting for market share<br />
  8. 8. Total Loss in the Year<br />Huge Challenges Faced<br />
  9. 9. Key Performance Indicators<br />Fuel Surcharges by Competitors<br />Global Economy<br />Passenger Revenues (decreased by 5%)<br />Cargo Revenues (decreased by 8.5%)<br />Overall Passenger Capacity (decreased from 12,599 million to 11,731 million)<br />Unit Costs (increased from Rs. 46.48 - 50.71 per TonneKilometre)<br />Average Staff Strength (significant decrease)<br />
  10. 10. The Business Turnaround Plan<br /><ul><li>Key Aspects of the Plan - “Earn more, spend less and waste not”. </li></ul>Restructuring of passenger and cargo revenue generation<br />Restructuring of route network<br />Savings through increased fuel efficiency<br />Reducing company’s fixed costs<br />Renegotiating of contracts with service providers<br />Optimising of sales channels<br />Reduced IT and Communication costs<br />Increase Productivity by focusing on People, Process and Technology<br />
  11. 11. Challenges Faced<br />Optimising Revenue<br />Improving Service Delivery<br />Enhancing Srilankan Engineering<br />Increasing Fuel efficiency<br />Increasing Productivity<br />Technology Requirements<br />
  12. 12. Optimising Revenue<br />New services to Rome utilizing the market opportunities in Italy<br />Temporary Suspension of Loss-Making Sectors<br />Hyderabad, Calicut, Cochin, Coimbatore and Goa<br />Increasing operations to key destinations<br />Increased frequencies to Middle East and South East Asian destinations<br />Direct services to increase convenience of passengers and reduce flying time (Karachi)<br />Expansion of route networks through increased Code share Partnerships<br />Increasing bookings through its Internet Booking Engine <br />Customer Loyalty Programme – FlySmiles<br />
  13. 13. Optimising Revenue<br />“Srilankan Holidays” teamed up with Singapore , Thailand and Malaysia<br />Business Class range and Platinum Range of holiday packages launched for the higher income market segment partnering with the top hotels<br />Event-based packages<br />Introduction of new products – eg. HOTSEATS<br />To promote advance bookings on the Airline’s website<br />SkyChain Cargo Handling System for customer convenience and operational efficiency<br />Increasing Cargo revenues that contributes to the 13% of the Airline revenue<br />
  14. 14. Improving Service Delivery<br />Emphasis on Inflight Service<br />Training of cabin crew and increasing the no of instructors from 4 to 20<br />Ensuring continuous on-site monitoring and evaluation of crew members<br />Improvement in Meal Services <br />Significant changes to inflight menus to suit a variety of customers<br />Reducing wastage and overall meal costs<br />Renegotiation of contracts with overseas caterers resulting in significant savings<br />Enhancement to inflight entertainment<br />Duty free sales on new range of 180 products including world’s leading brands and Srilankan items<br />Heart-start machines for medical emergencies<br />
  15. 15. Improving Service Delivery<br />Recruitment of new Chinese passenger assistants for Beijing service<br />SMS alerts on flight service<br />Uplifting the service standards of ground handling services for other airlines<br />Training of new airport staff and sky marshals <br />Innovation and cost control<br />In-house production of specialised vehicles and equipment especially with regard to airport airside activities<br />Modification to air-sickness bags to enable rapid identification of unused bags<br />Closing of airport offices overseas<br />
  16. 16. Enhancing Srilankan Engineering<br />Marketing programmes to increase awareness of SriLankan Engineering’s capabilities as an MRO, in order to attract new customers and enhance revenue<br />Major Contract with Indian Carrier IndiGoue to carry out maintenance checks<br />Training more aircraft engineers for Airblue, and to carry out maintenance checks for the Pakistani carrier<br />Continued emphasis on key areas like fuel efficiency and punctuality<br />Structural modifications to the fleet in-house resulting in cost-savings<br />
  17. 17. Increasing Fuel Efficiency<br />Use of diesel-operated Ground Power Units to power internal systems and air-conditioning on aircraft parked at BIA, instead of using Auxiliary Power Units of the aircraft<br />Reduce fuel burn while landing<br />Flying shorter routes whenever possible.<br />Re-evaluation of the choice of alternate airports<br />Stopping of over-fuelling of aircraft, to reduce weight<br />Focusing on having ‘clean’ aircraft to reduce drag while in flight<br />Tankering more fuel than required from cheaper points<br />
  18. 18. Increasing Productivity<br />Continuing to review company structure for greater effectiveness and productivity<br />Customising development intervention programmes to the requirements of user departments and business demands<br />No-Pay Schemes, to reduce staff costs<br />Continuous improvement of welfare facilities<br />Engaging employee unions in the decision-making process<br />Enhancement of recruitment processes for the future<br />
  19. 19. Technology Requirements<br />Consolidation of Data centers in Colombo and Katunayake<br />Maximizing the utilisation of existing systems to user departments<br />Creating a common customer database to integrate different sub business units which interacts with customer profiles<br />Revamping the Corporate website<br />Increase penetration levels for internet bookings<br />Rich features for customers and content management tools for internal users<br />Introduction of a CRM system<br />In-house developments of new systems for cost saving<br />Minimise IT risks through IT security audits<br />
  20. 20. Some World’s Successful Airlines<br />Singapore Airlines<br />Cathay-Pacific Airways<br />Qatar Airways<br />Thai Airways<br />Asiana Airlines<br />Malaysian Airlines<br />Emirates Airways<br />Etihad Airways<br />
  21. 21. Singapore Airlines- Strategies Used<br />Fully branded product/service differentiation strategy<br />First to introduce hot meals, free alcoholic and non-alcoholic beverages, personal entertainment systems, and video-on-demand in all cabins. <br />Maintains the youngest fleet of aircraft among all major air carriers<br />Low maintenance or replacement costs<br />New aircrafts are sub-branded further to distinguish from others<br />Invests heavily in R&D, innovation and technology as an integrated part of the business strategy<br />
  22. 22. Singapore Airlines- Strategies Used<br /><ul><li>The famous Singapore Girl</li></ul>Rigorous training programs for the cabin <br /> and flight crew<br />Strong Financial and cash position to <br /> internally fund purchases and limit interest costs<br />Continuous price-premium strategy and satisfactory passenger load factors<br />SIA carefully hedge up to 50 % of its fuel contracts 2 years in advance to avoid cyclical and often large volatility in fuel prices<br />
  23. 23. Emirates Airlines – Strategies Used<br />Operates wide-body aircraft and flies mostly long haul<br />lowers its per-seat-mile costs so it can be competitive on pricing<br />Newer fleets resulting in low maintenance and replacement costs<br />Attracts higher paying customers<br />latest in-flight amenities and entertainment systems<br />Distinctively uses Asian elements to create a premium product that appeals not only in its home markets but also to a Western audience.<br />High-level services provided especially for 1st class section<br />Latest technologies used to enable faster and more efficient handling of functions such as ticketing, baggage and cargo handling<br />
  24. 24. Emirates Airlines – Strategies Used<br />Sporting event sponsorships for promoting brand awareness<br />major events in football, horse racing, yacht racing, rugby, golf, cricket and tennis.<br />Recruitment from over 100 countries around the world and provide training to them to the highest standards <br />Invest millions of dollars to provide advanced engineering support<br />Huge investments on promotion campaigns<br />
  25. 25. Thai Airways – Strategies Used<br />User-friendly website to book and confirm flight reservations<br />Development of catering service<br />In the process of implementing e-ticketing to save time and reduces the need for check-in personnel <br />Established a Tourism Alliance to promote Thailand tourism and travel industry<br />Increased cooperation at the domestic and <br /> regional levels as well as with other global alliances<br /> to strengthen the airline’s competitive edge and <br /> expand market share<br />
  26. 26. Thai Airways - Strategies Used<br />Implementation of the Customer Relationship Management system<br />Automated Self Service System for domestic travel only to facilitate passengers’ demand in areas of reservations and check-in<br />Frequent Flyer Programs<br /><ul><li>Promotions through media, co-marketing efforts with hotel chains and credit card companies and travel agents</li></ul>Maintaining high safety standards - Compliance with ISO 9000<br />
  27. 27. Factors Influencing Success<br />People<br />Service Product/Promotions<br />Route System<br />Fleet Management<br />Revenue/Cost Control<br />Financial Management<br />
  28. 28. References<br />Srilankan Airlines Annual Report 2008/2009<br /> http://www.srilankan.aero/aboutus/SriLankan_Airlines_Annual_Report_2008_2009.pdf<br />http://www.brandchannel.com/features_profile.asp?pr_id=209<br />http://goliath.ecnext.com/coms2/gi_0199-6720187/CASE-STUDY-EMIRATES-Long-haul.html<br />http://www.hicbusiness.org/biz2003proceedings/Niti%20Dubey-Villinger.pdf<br />file:///C:/Users/Sudhahar/Desktop/Airlanka/facts_5242839_airline-industry-key-success-factors.html<br />http://gbr.pepperdine.edu/064/airlines.html<br />http://www.ehow.com/facts_5242839_airline-industry-key-success-factors.html<br />
  29. 29. Thank You<br />

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