SriLankan Airlines to boost cargo, cut costs with new Airbus aircraft

SriLankan will replace six A340 aircraft which are up to 18 years old and seven A330-200 aircraft with six A330-300 aircraft and seven A350-900 aircraft. Four will be acquired from Airbus and three from a leasing company. The newer aircraft will be more fuel efficient allowing costs savings in the region of 7 to 10 percent even after financing costs of acquisition, depending on the route flown, he said. As an aircraft gets older they become more expensive to operate and maintain but new models also incorporate technology that cut costs. Airbus has said the maximum take-off weight of the A330 has also been increased from 2012. The A350-900 aircraft in particular promises a 25 percent cut in operating costs according to its manufacturer Airbus. It is made of 53 percent composite material with a carbon fiber reinforced plastic fuselage. SriLankan has been boosting passenger factor, or the amount of seats filled as a share of total available, but at the expense of cargo on long haul flights. With the new aircraft no compromises on cargo would be needed. The A350 will be deployed on long-haul routes to Europe and Japan. "On a ten hour flight to London or Paris we will be able to carry a maximum payload of passengers and cargo," Chandrasena said. In the year to March 2012, SriLankan's passenger factor rose to 79.1 percent from 76.7 percent a year earlier, according to its annual report. In calendar year 2012, according to the central bank data its passenger factor had risen further to 81 percent, but cargo factor had fallen to 53 percent from 55 percent. Chandrasena said in some parts of the network the airline was seeing passenger factors of 95 percent and they had also been able to increase yield. Last year yields rose 12 percent, he said but costs were higher compared to competition. The new aircraft will also standardize the service across different aircraft, Chandrasena said. Pricing can be improved with a better product. The A330s will be deployed on medium haul destinations such as the Middle East Thailand and China, which are high passenger volume destinations, he said. Sri Lankan has newer fleet of eight A320s which are deployed on short-haul routes. Sri Lankan made operating losses of 20.5 billion rupees 2012, according to published data. Full service airlines have seen heavy competition especially on short-haul routes in Europe and East Asia from budget carriers, though they still fare well on long haul routes.