Head of Cargo Chamara Ranasinghe said that SriLankan Airlines was hit by a drop in passenger and cargo throughput from China.
Ranasinghe said this at the Ceylon Chamber on February 24 at an event to educate the public on the offerings of air freight as supply chains have been disrupted by the coronavirus. The national carrier will shortly be expanding its fleet and in doing so its capacity to handle cargo.
On arrivals from China, he said “We have zero bookings and we have been going with very low cabin factors. I don’t see it improving shortly.” “We have halved our operation into China. We operate in Beijing, Shanghai, Canton, and we have decided to operate only 50 percent. It is not good in passenger terms and not for cargo. It is a very challenging environment. The Chinese account for 30 percent of travel. We have seen a drop in air freight volumes not only from China but other connected countries,” he said.
“There is almost a 40 percent capacity cut and there has been a rise in demand and yields have gone up in China as the demand for capacity is more than the supply. It is going to be difficult for a passenger airline to benefit from this as there are so many restrictions in operational patterns. If your crew is exposed to the Chinese you need to have 14 days in isolation.” “When we lost our European footprint in 2017 for obvious commercial reasons we lost a chunk of business and revenue and a big opportunity. There is a lot of work being done to get us flying back to Frankfurt and Paris by next winter. We will soon add flights to Sydney and expand some of our regional footprints like Vietnam, Ho Chi Minh, and a few points in India with narrow bodies.”
The fleet of Sri Lankan is expected to increase shortly from the current 26 with additional cargo space on sale as well.
Sri Lanka has the region’s best infrastructure for the transport of dangerous goods. Sri Lanka carries various items as cargo from pets to luxury sports vehicles.
In the medium term, the cargo area for terminal 4 is to split into an area for perishables and a courier center for imports and exports. The trusted agent model will be implemented to prevent additional screening when dropping off goods at the airport. The government has informally agreed to the changes. The airport will look to get international accreditation to facilitate hub activity in the medium term. He said the airport and airline are separate companies but that the bureaucracy has pushed through all relevant documentation.
He cited cargo as an important business vertical for Sri Lankan Airlines contributing 9-10 percent of revenue which is in line with the global average of 9 percent for the airline business.
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