One of the most popular airlines in South Asia, it connects 113 destinations in 51 countries – SriLankan Airlines is the national carrier for Sri Lanka. It is the largest airline in Sri Lanka in terms of fleet size and destinations. SriLankan Airlines was established in 1978 following the closure of Air Ceylon.
The first state-owned airline established by Sri Lanka post-independence from the British Empire was Air Ceylon. It is one of the first airlines in South Asia to start long haul operations connecting Europe on one end and Australia on the other. In the 1950s, Australian National Airways acquired a 49 per cent stake in Air Ceylon. Consequentially, Air Ceylon leased two Douglas DC-4s and started operations to Darwin via Singapore. Douglas C-47 Skytrain was used to fly to London with stops during the trip.
However, in 1953 when British Overseas Airways Cooperation introduced the British-made de-Havilland Comet between London and Colombo, Air Ceylon suspended its operations to London. Over the years, Air Ceylon upgraded its fleet buying jets in line with its European competitors. In 1978, although the carrier filed for bankruptcy, the government approved to start Air Lanka later renamed as SriLankan Airlines.
Emirates investment in SriLankan
In 1998 as part of modernisation and rebranding, Emirates bought a 43.6 per cent stake in SriLankan Airlines. It paid $70 million in 1998, making it Emirates only ever investment in another airline. In the next few years, following the renaming of Air Lanka to SriLankan Airlines, the airline grew rapidly. It introduced Airbus A330 along with A340 and A320. It increased its footprint in India and connecting destinations close to Sri Lanka. From a mixed Boeing and Airbus fleet, the SriLankan Airlines today is an all-Airbus fleet.
In 2008, Emirates sold off their stake in SriLankan Airlines accusing the SriLankan government of interfering in its day to day operations.
Since the 1990s, terrorism in Sri Lanka impacted its aviation industry massively. But as the government increased its resources to fight against local terrorism, tourists started flowing into the country. After Emirates bought a stake, SriLankan Airlines witnessed increased passenger load factor, revenues and fleet size. The airline was able to produce positive balance sheets. However, after Emirates sold off its stake, the airline has been posting losses ever since. Increased fuel price, unprecedented depreciation of crucial currencies, political instability and intense competition are key factors contributing to the airline’s losses.
Notwithstanding, the airline is making a futuristic plan to develop its revenues by expanding its footprint globally. During the last three years, SriLankan Airlines posted an increase in passenger load factor by effectively deploying aircraft based on market dynamics.
The airline currently operates an all-Airbus fleet comprising Airbus A320, A321 and A330. It earlier operated the Airbus A340 but ordered A350s to replace them. However, in 2017 the carrier cancelled the order for Airbus A350 citing losses. But as per the April 2020 Airbus order statistics, four A350s are currently on order for SriLankan Airlines.
Effect of Covid-19
SriLankan Airlines cancelled all its passenger operations to control the spread of COVID-19. However, the airline currently is deploying aircraft to export cargo. The state-owned carrier is operating A320 and A330 as cargo flights to 27 destinations globally to help the country reeling under the impact of the pandemic. Repatriation flights are underway to bring back Srilankan citizens from the US, UK and Australia.