August 1, 2008

SriLankan Adds Flights to Bangkok, Thailand

By Boonsong Kositchotethana, Bangkok Post, Thailand

Jul. 31--While most airlines are either cutting back on flights through Bangkok in response to the slowdown in traffic triggered by spiking fuel prices and sluggish low-season demand, one foreign carrier is doing the contrary.

Flag carrier SriLankan Airlines ramped up its Bangkok-Colombo operation on July 15 to 10 flights a week from seven previously. The increase represents about 900 additional seats per week.

"It's a totally out-of-the-box view if you look at it, but if you take the travel trends into Thailand and top it up with the Tourism Authority of Thailand's ongoing efforts in promoting the kingdom, you could see that it makes so much more sense (to raise flights)," said Amitabh Anthonypillai, the airline's manager for Thailand and Mekong region.

SriLankan has seen passenger volume on the route rise steadily, from 43,859 in the year to March 2006, to 58,294 to March 2007, 60,143 to March 2008 and 17,812 in the quarter to June 2008.

With the additional three flights a week, SriLankan is operating both A330 and A340 wide-bodied jetliners.

Nearly 50-60 percent of the airline's Bangkok-Colombo traffic goes beyond the Sri Lankan capital, with inbound movement generated mainly from Europe, the Indian sub-continent and the Mideast.

Through its Colombo hub, SriLankan operates up to 100 flights a week to India, serves nine cities in the Middle East and three cities in Europe (London with 15 flights a week, Frankfurt four and Paris three).

Though a good part of its passengers are businessmen, labourers, students and traders, SriLankan is predominantly a leisure carrier in and out of Thailand. It is quite confident that leisure travel from its core markets will not spiral downward as it portrays near inelastic characteristics.

The airline is not merely looking at producing extra traffic from the Thai market with outbound flights, but also focusing on the regional markets in the Mekong to supplement traffic on the flights, said Mr Amitabh.

"With load factors averaging 85-90 percent since December 2007 on the dailies, my expectations are to reach these figures on the new flights in approximately one 1/2 to two months at the most," he said.

"We took a gamble in May 2007 when we decided to terminate one of our Hong Kong flights in Bangkok. It paid off handsomely where net retentions were concerned; we hope to do the same with the three new flights as well."

Thailand was SriLankan's first international destination in 1979 and still continues to dominate visitor arrivals.

The airline views Bangkok as a service station rather than a revenue-generating station with high network contributions in terms of passenger numbers, revenue and yield.

With more Bangkok-Colombo flights, SriLankan has the largest capacity on the sector, compared to four frequencies being offered by Thai Airways International and three by Cathay Pacific.

Until July 1, the airline was not charging a fuel surcharge separately from its fares. But as crude hit uncharted territories, crossing the US$140-a-barrel mark, it was prompted to come up with a structure separating a fare component and a fuel surcharge element. Its fuel surcharge varies from $25 to $80 per sector.


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