Sri Lanka state airline on yield maximizing drive

Mar 20, 2012 (LBO) – Sri Lankan Airlines is focusing on maximizing yields on its network and shifting capacity from Europe where competition is high to Asia, amid rising fuel prices, chief executive Kapila Chandrasena said. Mihin Lanka, a budget carrier, which shares some services with Sri Lankan is expected to lose around 15 million US dollars (about 1.6 billion rupees).

Chandrasena says the plan is to cut losses to about 80 million US dollars next year and the airline may have to take more action if oil prices continue to move up, including further re-working of routes and equipment deployment.

The most expensive to operate is the airline’s ageing four-engined long-haul Airbus A340 fleet, which are due to be replaced with twin-engined equipment by 2014.

“We will take proactive measures,” Chandrasena said. “It may be cheaper for us to keep the aircraft on the ground than operating and making a higher loss because of the fuel price.

“In that scenario we may decide to ground one or two aircraft so that we will reduce loss-making routes and deploy available capacity on opportunistic markets.

“That’s the kind of dynamic scenario we are looking at.”

Yield Management

The airline has