Sri Lankan Airlines is close to an agreement to switch and delay its remaining widebody orders, as part of the carrier’s broader restructuring efforts.
The carrier had an order for eight Airbus , but four have previously been canceled. Sri Lankan has been engaged in talks with Airbus regarding the cancelation of the remaining four orders, the airline’s CEO Suren Ratwatte told Aviation Week on the sidelines of the recent CAPA Airline CEOs conference in Sydney.
These discussions should be resolved soon, Ratwatte said. The agreement will mean that the A350 orders “will be replaced with something else more suitable” for the carrier, he said.
Ratwatte would not specify which aircraft will be ordered instead, but he noted that and are a good fit for the Sri Lankan fleet. The airline already operates both types. The A350s were to be delivered from 2020, but the arrival date for the replacement orders will be pushed back, said Ratwatte.
The airline’s restructuring plan is now “pretty much complete,” Ratwatte said. It must still be approved by the government, which holds a significant amount of the airline’s debt. A new board was installed at the airline in March. According to local media reports, Ratwatte has agreed to resign from the financially troubled airline.
Sri Lankan cut capacity in its current summer schedule season, and cuts for the winter season are being discussed. The airline is attempting to boost its yields in response to higher fuel costs, said Ratwatte. However, like other airlines it is faced with “such a competitive environment, with so much overcapacity.”
Ratwatte noted that Sri Lankan is “surrounded by carriers which have a really aggressive cost-base.” LCCs, such as Indigo manage to keep costs low even when fuel prices are high. Sri Lankan has a strong presence in the Indian market, but the LCCs have essentially “cherry-picked” the best of the routes into India, he said.
Except for in slot-constrained airports, such as Delhi and Mumbai, Sri Lankan must compete against “a whole bunch of very hungry LCCs” in India. That makes it hard to raise yields, said Ratwatte.