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SriLankan Airlines to join Oneworld

 
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PostPosted: Mon Jun 11, 2012 7:09 am    Post subject: SriLankan Airlines to join Oneworld Reply with quote

http://www.flightglobal.com/news/articles/iata-srilankan-airlines-to-join-oneworld-372814/

SriLankan Airlines to join Oneworld

Oneworld will this morning unveil SriLankan Airlines as its latest member elect during the annual general meeting in Beijing.

Full details will be disclosed by Oneworld chief executive Bruce Ashby and SriLankan Airlines chief executive Kapila Chandrasena during a media event at the AGM today.

The Sri Lankan flag carrier is expected to join the alliance late next year, with Cathay Pacific Airways as its sponsor, guiding it through the implementation process.

The carrier already codeshares with Oneworld member designate Malaysia Airlines, which is itself due to join the alliance this year. It will soon also announce an agreement in principle to codeshare with fellow members Royal Jordanian and S7 Airlines.

"With the world airline industry increasingly focused on alliances, SriLankan has carried out in-depth analysis of the options open to the airline as we enter this latest phase of our development. Oneworld is very clearly the best option for us. Joining the alliance will help put SriLankan more firmly on the global aviation map and vastly improve our connections with the rest of the world," says airline chairman Nishantha Wickremasinghe.

SriLankan will add three new destinations in southern India - Kochi, Tiruchirapalli and Thiruvananthapuram - to Oneworld's network of 850 destinations in 150 countries. It operates 21 aircraft to 34 destinations in 22 countries.

After Air Berlin joined the alliance this year, Oneworld now has 11 active members.

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Nimish
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PostPosted: Mon Jun 11, 2012 11:11 am    Post subject: Reply with quote

Awesome news - should definitely help UL pick up steam and a lot of pax.
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PostPosted: Mon Jun 11, 2012 11:40 am    Post subject: Reply with quote

Nimish wrote:
Awesome news - should definitely help UL pick up steam and a lot of pax.
I disagree. I don't actually think it will make a big difference. Not much oneworld connectivity in CMB... It'll make a positive improvement, and probably pay for the costs of being an alliance member, but I don't think that this move is going to turn UL into a cash cow.
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PostPosted: Mon Jun 11, 2012 12:06 pm    Post subject: Reply with quote

OW was looking for a partner in South Asia. UL just seems to be taking the place of Kingfisher.
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PostPosted: Mon Jun 11, 2012 12:35 pm    Post subject: Reply with quote

aeroblogger wrote:
Nimish wrote:
Awesome news - should definitely help UL pick up steam and a lot of pax.
I disagree. I don't actually think it will make a big difference. Not much oneworld connectivity in CMB... It'll make a positive improvement, and probably pay for the costs of being an alliance member, but I don't think that this move is going to turn UL into a cash cow.


Well - I'm not sure about the quantum of revenue this might bring UL, but certainly they would expect it to bring enough that it's worth joining the alliance. Also perhaps as OW tries to bring on these smaller regional players, they might have a lower fee/ payment structure for such carriers?

Existing AA/ BA/ QF/ CX FFPs won't have to think twice on which service to take to South Asia and Maldives. That itself might bring on some traffic - along with code shares on routes to LHR/ HKG/ KUL and perhaps NRT?
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PostPosted: Mon Jun 11, 2012 4:00 pm    Post subject: Reply with quote

Nimish wrote:
Awesome news - should definitely help UL pick up steam and a lot of pax.


See the report below not much of an impact:


National carrier SriLankan Airlines is betting that joining the oneworld alliance in 2013 will further its revival as the carrier continues to expand following the end of Sri Lanka's civil war in 2009, which has permitted increases in tourism and GDP growth. It is this focus on Sri Lanka the carrier hopes to build, having served a decade ago as a de facto hub for India given the liberal access regime whereas India was more protective elsewhere. India's opening of its skies to the UAE and Qatar, home to powerful networks, had tremendous impact on SriLankan's network. While the carrier will grow to India, it sees its growth firmly planted in Asia and is planning a service to Seoul.

While oneworld discreetly acknowledges SriLankan is not its typical member, SriLankan does bring oneworld greater access to India, where oneworld lost out to earlier in the year with Kingfisher's prospective membership being suspended. The competitive landscape also works against oneworld's positioning in India, with Jet Airways likely to join Star Alliance in the near future.

SriLankan's entry – announced at the IATA AGM in Beijing – will be sponsored by Cathay Pacific, whose CEO John Slosar acknowledged that while oneworld prides itself on quality, SriLankan, a carrier that does not jump to mind as large and prestigious, has a “growing reputation for customer service”. SriLankan's history includes a period where it was managed by Emirates, a relationship that ended tersely – although relations are now smoother – and left Emirates with a view to generally pursue expansion on its own. SriLankan's addition to oneworld will shift 0.4% of current seats in Asia-Pacific.


SriLankan serves 34 destinations in 22 countries around Asia, Europe and the Middle East but new cities it brings to the oneworld map are few, and internationally include the Indian cities of Kochi, Trivandrum, and Tiruchirappalli. SriLankan's potential strength – if more oneworld members serve Colombo – is its short-haul frequency from Colombo. While British Airways for example serves many Indian cities, these services are not relevant for oneworld's Asia-Pacific members as accessing them would require backtracking through London.
SriLankan's addition to oneworld will boost the alliance's share of international seats to/from the country by 2.7ppt.


Currently only two oneworld carriers serve Sri Lanka: Royal Jordanian from Amman and Cathay Pacific from Hong Kong via Bangkok and Singapore. Mr Slosar says that with SriLankan joining oneworld Cathay will likely introduce non-stop services to Colombo. It currently has a daily service to Colombo (four frequencies via Singapore and three via Bangkok). oneworld member elect Malaysia Airlines (MAS) also serves Colombo. SriLankan codeshares with MAS and has announced an agreement in-principle to codeshare with Royal Jordanian and S7 Airlines. SriLankan serves Moscow, S7's base, but not Amman, Royal Jordanian's base.

Prospective services from other oneworld members are very limited. British Airways already has an extensive network in India but in the long-term could look to serve Colombo for onward connections to Asia depending how SriLankan develops its network.
SriLankan to concentrate growth on Asia


SriLankan airlines operates a dual brand strategy, with the full-service carrier complemented by LCC Mihin Lanka, of which Mr Chandrasena is also CEO. Mihin operates to five cities – Dhaka, Dubai, Jakarta, Sharjah and Tiruchirappalli – with a fleet of one A320 and one A321. Mihin targets more price-sensitive markets and operates alongside SriLankan to Dubai and Tiruchirappalli, but Mr Chandrasena says Mihin will increasingly open new cities and not overlap with SriLankan. He expects to grow Mihin each year by about one aircraft, each of which will permit upwards of three new destinations being opened. Mr Chandrasena pointed to Mihin's success in the price-sensitive market of Jakarta as a model for future growth for the carrier.

SriLankan and oneworld are not obvious pair
oneworld is clearly the underdog in global alliances. It may prefer strength over numbers, as alliance CEO Bruce Ashby suggested when remarking "we take pride in the quality offering", but oneworld simply needs to expand to remain relevant. It is time for the alliance to add smaller members, and SriLankan is a start. The market remains heavily focused on leisure traffic, with tourism increasing 30% in 2011 year-over-year. This traffic, of course, is susceptible to Asia's prolific and growing LCCs. Sri Lanka's 8.3% GDP growth in 2011 may help boost corporate potential. oneworld membership will help SriLankan bring its services – both passenger-facing and back-end – to a global standard, which brings efficiency. SriLankan has shown its own initiative, having outfitted its widebody fleet with AVIO Interiors' lie-flat seats in business class and cabin-wide RAVE in-flight entertainment.

SriLankan will need to be ambitious in pursuing synergies, although they may be small given oneworld's small presence, and the preference of its members to be loosely affiliated to each other. Incremental revenue gain may be small – oneworld's total in 2011 was USD2.7 billion – but notable for SriLankan. SriLankan's membership marks a new chapter for oneworld tapping smaller airlines. Sri Lanka's growth, which SriLankan expects to ride on, should give oneworld confidence that smaller airlines are valuable, and needed.

SriLankan CEO Kapila Chandrasena tells CAPA that SriLankan's growth is firmly planted around Asia, and India in particular. The carrier operates 84 round-trip flights a week to India, almost entirely in the country's southern part given ethnic ties. SriLankan has 28 weekly flights to Chennai, making the route its largest by frequency after the Maldvies. SriLankan also operates 14 weekly flights to each of Kochi and Tiruchirapalli. In comparison, Delhi is served only daily, but Mr Chandrasena says SriLankan aims to bring the service to double daily. Mumbai, served daily, will remain as is in the near future.
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Nimish
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PostPosted: Tue Jun 12, 2012 10:32 am    Post subject: Reply with quote

sri_bom wrote:
Nimish wrote:
Awesome news - should definitely help UL pick up steam and a lot of pax.


See the report below not much of an impact:



I've read the report as well. But if there's not much of an impact, why would UL pay the money and join the alliance?
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PostPosted: Tue Jun 12, 2012 1:21 pm    Post subject: Reply with quote

Nimish wrote:
sri_bom wrote:
Nimish wrote:
Awesome news - should definitely help UL pick up steam and a lot of pax.


See the report below not much of an impact:



I've read the report as well. But if there's not much of an impact, why would UL pay the money and join the alliance?
I think joining an alliance will pay for itself, but I don't see a massive benefit. A moderate increase for their LFs, bolsters their brand, more codeshares and connectivity... But joining an alliance doesn't come cheap, and the costs will probably eat up a lot of the benefit.
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PostPosted: Wed Apr 30, 2014 8:37 pm    Post subject: Reply with quote

Finally, it has happened.

Behind the scenes of all the Indian airlines trying to join alliances, UL quietly becomes the first airline from this part of the world to join oneworld, rather, an alliance.

http://www.srilankan.com/en_uk/home/news-details/164

UL could've done better in editing the text, perhaps by adding some spaces in between words.
They are part of a global and well recognized alliance, you know.... Rolling Eyes
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PostPosted: Wed Apr 30, 2014 9:30 pm    Post subject: Reply with quote

Good job!

Even after years of natak, both the National Beggar and the National Whore remain where they were. And the National Hot Air Balloon is out of sight. Meanwhile, little Air Lanka are in an alliance.

Whether it's a worthy decision to join an alliance or not is secondary. The main thing is that that's what they wanted to do, and they managed to do it in 18-ish months with minimal fuss. Bravo.
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PostPosted: Wed Apr 30, 2014 10:21 pm    Post subject: Reply with quote

National hot air balloon - Kingfisher, I'm guessing?

Second, it actually was a process which lasted just under 2 years. All said and done - well done to UL. Hopefully it gains more benefits than 9W's looked-promising-but-doesn't-look-so deal with EY. Time'll tell.

Last, I'm surprised that Mihin is not an affiliate member. It was there in the list before, but now it isn't.
Heck, it would've added destinations such as SEZ, VNS and KNO to the oneworld network...
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PostPosted: Wed Apr 30, 2014 11:27 pm    Post subject: Reply with quote

Oneworld have had quite an eventful few months, with Malaysian, Qatar, Sri Lankan, TAM and US Airways all joining in a rather short span.

jbalonso777 wrote:
Hopefully it gains more benefits than 9W's looked-promising-but-doesn't-look-so deal with EY.

Why isn't it promising? Just look at the timeline. That flopshow went from

- I'm too good for alliances; they're beneath me
to
- Lufthansa and Star at any cost (Lufty baby, LUfty baby, ooh)
to
- A dinar, a dinar, whole airline for a dinar
to
- Eithad Airways India Limited
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PostPosted: Tue May 06, 2014 5:02 pm    Post subject: Reply with quote

Good stuff by SriLankan, somehow they've always maintained a higher standard compared to South Asia's usual since the turn of the century.

Now with UL, Saudia and even Garuda signing up to the alliances of today, it's just downright farcical that the Indian aviation scene is still tied up in perennial hesitance, inefficiency, red-tape and most likely all three when it comes to having either one of AI or 9W enroll in one of the troika of alliances and reap the benefits over the medium term. Absolute farce.
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