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SriLankan Airlines, economy and tourism


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SriLankan Airlines CEO Kapila Chandrasena estimates aviation industry’s contribution to national economy at 3.8% of GDP, of which SriLankan Airlines’ contribution is at 2.2%. With a GDP value of $ 60 billion, 2.2% works out to around $ 1.3 billion. He said total contribution to economy comprised of 2.2 percentage points from UL and an estimated 1.6 from other airlines including Mihin Air. “As travel and tourism grows, their contribution to the economy will rise in tandem and we forecast in the next five years the overall industry contribution to be around 5 or 6%, with SriLankan Airlines giving a major impetus,” Chandrasena said. The future scenario compares well with 6% by Greece or over 5% in Hong Kong. Malaysia’s contribution is around 3% whilst Thailand and New Zealand are higher at 9% and 11% respectively. “Sri Lanka is strategically located to harness the predicted boom in tourism, especially out of India and China. Our new fleet will help us position SriLankan Airlines effectively to tap this growing segment,” the CEO said. Demand out of Sri Lanka grew at an impressive annual growth rate of 8.6% (net of capacity) for the past two years, and is forecast to maintain the same trend for next five years, according to the SriLankan Airlines CEO. Combined total number of passengers carried during the two years (2011/12 and 2012/13) was 7.86 million, with trend forecasts showing the figure to rise to nearly 12 million by 2017/18. “Demand into Sri Lanka out of key markets is showing very good growth prospects, with Asian countries leading the growth,” he said, adding that “Sri Lanka is located in an enviable position to capture some of the strongest and fastest growing regional travel flows in the world, including India and China.” For example, air passenger traffic in India and China is forecast to grow by 70% by 2017/18. Intra-Asian travel is also estimated to boom further by 2030 as Asia Pacific’s middle income class rapidly grows. Colombo’s attractiveness as a hub to facilitate some of the strongest and fastest growing travel between North East Asia and Europe, South East Asia and India, South East Asia and Middle East, Southeast Asia and Europe and China and Europe will be greater as well. In the first quarter of 2014, SriLankan will formally join the oneworld alliance. This, among other major benefits, will enhance rewards and recognition for top-tier FlySmiLes members with ability to earn and redeem with any alliance member. “Being invited to join the oneworld alliance and being the first carrier in the Indian Ocean is a major boost for SriLankan Airlines. We should be on course to join this prestigious and biggest alliance by April 2014,” Chandrasena added. oneworld is an alliance of the world’s leading airlines committed to providing the highest level of service and convenience to frequent international travellers. These include leading brands from each global region. Besides American, they feature LAN from South America; airberlin, British Airways, Finnair, Iberia and Russia’s S7 Airlines from Europe; Qatar Airways and Royal Jordanian, from the Middle East; Asia-Pacific’s Cathay Pacific Airways, Japan Airlines, Malaysia Airlines and Qantas; and some 30 affiliated airlines. Besides SriLankan Airlines, US Airways and Brazil’s TAM are also lining up to join early next year. With the addition of these airlines, the oneworld network will expand to almost 1,000 destinations in more than 150 countries, served by 14,250 daily departures – equivalent to a oneworld flight taking off or landing every three seconds around the clock – carrying 475 million passengers last year and generating annual revenues of US$ 140 billion. There are 140 million members of established oneworld airlines’ frequent flyer programs as well.

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