Validation of ‘Colombo Hub’ concept biggest achievement this year: SriLankan CEO

Reviewing the airline’s operation in 2017, which he termed a “tough year”, SriLankan Airlines CEO Suren Ratwatte said the biggest achievement of the year was the validation of the ‘Colombo Hub’ concept. 

“As part of this strategy, SriLankan implemented one of the biggest expansions of its route network in recent years – with the introduction of services to three new destinations, namely, Hyderabad, Coimbatore and Visakhapatnam in India and the launch of direct non-stop services to the existing destinations of Guangzhou and Hong Kong. 

This marked two key milestones, achieving firstly the highest number of destinations in the history of any Sri Lanka-based airline and secondly, SriLankan becoming the foreign airline to serve the most number of destinations in India. This is all part of our vision to transform the airline into a regional powerhouse, serving a market that has the potential to be the world’s largest,” he said.

“The strategy of becoming a key player in the South Asian region took another major step ahead when the airline launched daily non-stop services to Melbourne, Australia, in October. This marked the first time that direct air links were established between Sri Lanka and Australia after a hiatus of 16 years. 

Apart from creating business links, this move is expected to greatly contribute towards an influx of Australian tourists to Sri Lanka. The results are already bearing fruit, with the tourist arrivals from Australia up by 23.7 percent in the month of November alone. Healthy sixth freedom traffic to major Indian metros further confirms the use of Colombo as a key hub to the sub-continent,” Ratwatte said. 

“Now the challenge is to grow the hub, with the right fleet and cost structure which will ensure we can be profitable in this relentlessly competitive business. Low-cost carriers (LCCs) are the main players in this region and we too must become leaner and more efficient if we are to compete effectively with them. Sri Lanka’s main inbound tourism sources, China and India, are primarily served by the national carrier. 

With the direct Melbourne flight adding a new dimension to these markets, we continue to be the major source of tourists to the country. But threats abound, not only from the LCCs, which continue to add capacity while pushing down ticket prices but also the Gulf carriers, which seek more connecting passengers for their ‘mega-hubs,’” he added.  

Meanwhile, Ratwatte said the airline is on track to become a billion dollar company this financial year though the cost base has remained untrimmed over the year. 
“In a market where the yields remain poor but fuel prices are rising, this is no longer tenable. Reducing our costs while maintaining our standards and not compromising on the product, is a huge challenge that we must all focus on. The focus for 2018 must be consolidation and transformation,” he said.