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Turnaround Of Srilankan Airlines

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Turnaround Of Srilankan Airlines

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