The business of flying

By Sarath de Alwis

‘Emirates and Mauritius join forces to promote the destination worldwide’ was the caption of a prominent news report in the Daily FT of 17 January. The joining forces were so important to Mauritius that the Mauritian Minister of Tourism and the Head of the Mauritius Tourism Promotion Authority had signed the agreement at the Emirates Headquarters in Dubai.

On the same day, Indian News Channels broke the story that the Indian Government may allow FDI in private domestic airlines up to 49% by foreign carriers. These are events unfolding at our doorstep. They call for some reappraisal of our own policies on aviation and tourism.

The caption of the news report was revealing as it has nuanced the profiles and the purpose of the two signatories to the agreement. One is an airline based in the Middle East and the other is an island in the Indian Ocean. The other possible development in Indian domestic aviation has serious implications for SriLankan Airlines that has in recent years expanded its operations in the subcontinent. The subcontinent is our hinterland (reject the CEPA at our own peril!).

SriLankan Airlines and Sri Lankan tourism

The general assumption that that SriLankan Airlines and Sri Lanka Tourism are interdependent is a mistake. True, aviation policy has an impact on tourism. Conversely, the tourism potential of the country has an impact on the commercial aviation industry, including the commercial interests of Sri Lankan Airlines. The interests of Sri Lanka tourism and the National Carrier are similar but not synonymous.

It does not necessarily follow that the National Carrier does not or need not serve the national interest. It does and it should. The task of the National Carrier is to contribute towards the connectivity of our economy to the world. It has a lead role in providing that connectivity. The National Carrier should promote its base not only as a destination but also as a convenient point that connects with other destinations in its network.

The national Tourism Authority has a simpler task. It has to promote the single destination of Sri Lanka and perhaps a neighbouring destination such as Maldives in a multi-destination package, where the two destinations can be complementary.

The airline basically runs on fuel, which means cabin factor. Its performance is subject to a stringent and immediate test of profit and loss. The Tourism Authority is not subject to a perishable inventory. Its marketing strategies can be subject to change or improvement.

Thanks to the new legislation, the Tourism Authority policy formulation involves the State and other stakeholders such as hotels, tour operators and travel agents. In the case of the National Carrier, there is only one stakeholder – the Treasury. The implication of that is that all our people stand to be either winners or losers in the aviation business. In contrast, in tourism our stakes are high, but we are not hostage to external factors as in the business of flying.

Let us not delude ourselves. National interest has a bottom line. National interest demands that we succeed both in aviation and tourism. There again we must be cautious. National fervour is not necessarily national interest. Our national interest demands that we do not squander our limited resources but optimise their utilisation.

New flying experience

On the internet one could read of SriLankan’s new flying experience: “The design of the curtains and the bulkheads are from traditional ‘batapellala’ (bamboo) tats. At the back of the cabin, are scenes from Sri Lanka seen through in black and white glory.”

The cutting-edge traditional ambience of the cabin interior is seen by the passenger who comes onboard. We must get the air traveller on board to savour this aesthetic excellence. Getting the passenger onboard is the end and the interior décor, however ingenious, is not the means to that end. On the other hand, this Sri Lanka ambience could have been replicated in all SriLankan Airlines online offices with Sri Lanka Tourism sharing the cost of re-decoration!

The flying experience with SriLankan is definitely enhanced by the other Sri Lankan offer. “Travelling Business Class on SriLankan Airlines becomes a luxury in the skies with the introduction of flat bed seats…” That is measurable value delivery. The TV spot or brochure can feature the flatbed. The bamboo tats require a foot note. Footnotes are a problem with TV spots. Even in brochures and advertisements the consumer hardly reads the small print.

It is not suggested that the refurbishing of the cabin interiors with a touch of the traditional is inappropriate. As a marketing tool it is simply inadequate to the task.

SriLankan Airlines in its global business must sell all destinations that it serves and destinations beyond the network of its own operations. Its product has to have a global appeal to the global traveller.

The business of flying

In this age of code share flights being considered as traffic rights, the National Carrier is in the business of flying. It is in a global business. Success in business is as patriotic as recalling past glories.

The notion that the raison d’être of the National Carrier is filing the hotel rooms of the country with holidaymakers is deeply ingrained in the minds of many in the leisure industry. This inhibits the State-owned National Carrier, which is sensitive to public pressure.

The airline should have the flexibility of evaluating routes on the basis of operational viability. The fact that several tour operators have featured Sri Lanka as a destination does not mean that the airline should be prevented from taking a hard look at the yields it can command on that route. The competitors who can saturate a route with both capacity and frequency can turn on or turn off the yields at will. It is a wicked world out there.

Commercial aviation is not only about passengers making easy connections. It is also about cargo delivered on time. We are fast reaching the stage when cargo maters as much as passengers. Airlines are judged on balance sheets. Destination promoters are usually judged on statistics. What matters to the airlines is not how many it carried, it is how much it earned on how many miles.

The tendency of manufacturers to depend on just in time delivery with greatly reduced inventory burdens and costs will make air cargo as important as or more important than passengers. If the airline of the future (the future in this case is the drawing board) is dependent on both passenger and cargo uplift, the warehouse and distribution networks will be as important as the futuristic passenger terminal that we could think of.

Future of SriLankan Airlines

The private sector representatives in the national Tourism Authority are those who represent conglomerates with many irons in the fire. They are into light manufacturing, retail, exports, IT and logistics.

They should be the first to tell the authorities that the days of flag carriers are long past. The State must again rethink on the future of SriLankan Airlines. A financially restructured airline with a clean slate that is accountable in its management will still draw in foreign investment. It is a serious proposal that will have its own dynamics, especially if the Indian domestic carriers succeed in drawing in both foreign investment and management.

Private sector role

The business of destination promotion is the only business of the National Tourism Development Authority. Accessibility of the prime destination is its core concern. That means that it should encourage as many airlines as possible to touch down in Sri Lanka.

Since the private sector is now fully mobilised in the activities of the Sri Lanka Tourism Authority, it can play a pivotal role in developing the infrastructure required to make Sri Lanka an attractive point for all major airlines.

Airlines come when the facilities in the form of airports and ground handling are both available and cost effective. It is time we considered private sector involvement and investment in developing aviation related infrastructure.

The present state of aviation infrastructure in Colombo and the ongoing work at the proposed new airport in the south (may be the highway will connect) give us a new opportunity to plan for the future.

Airport of the future

The airport of the future is an airport city that consists of many services and products on offer. Apart from passenger comfort and safety, the new airport city has to offer hotels, conference facilities, entertainment, shopping arcades, logistics and even industrial zones.

The absence of a permanent apex body for the logistics infrastructure development makes it necessary that Sri Lanka Tourism takes the initiative in setting up an apex body that can decide on a long-term composite national plan for logistics infrastructure development.

In 2011 Singapore marked a century in aviation with Changi Airport handling 42 million passengers. Senior Minister Goh Chok Tong in an event held to celebrate the centenary said: “The Government invested strategically and built capacity ahead of demand in the development of airport infrastructure.”

The key words here are “ahead of demand”. In the global game, the player has to be ahead of demand and continue to be ahead. Airports, highways and warehouses are built not on the basis of suggestions put in a suggestions box but by planners who think out of the box.

The future of both aviation and tourism is dependent on the progress in the productivity of our services and manufacturing. Air traffic to and from Sri Lanka that includes holiday travel will increase not by reduced costs in air travel but in rising incomes of the growing middle classes not only in China and India but also of Central Asia and elsewhere and here at home.

Selecting a travel location

Tourism promoters classify tourist as holiday makers, incentive travellers, visiting friends and relatives, etc. Apart from the motive to travel, the most important factors are the cost of travel and what the end point has to offer. The reasons for selecting a conference location, a beach holiday or wildlife safari will all have three common denominators – accessibility, reliability and cost. The antiquity of Anuradhapura or the pageantry of the Perahera are of little significance to the vital decision of deciding between Sri Lanka or Mauritius.

Research indicates that only 38% of the internet users rely on English. The top three reasons for choosing a destination are that it was recommended by friends or relatives, it is a world-renowned must see destination or information on the web. Advertising is way down in terms of persuasion. Geographic proximity and price can also beat advertising.

A multilingual website in Mandarin, Korean, Japanese, Arabic, French, German and Spanish in addition to English is a feat that requires a colossal investment.  The private sector promoters of destination Sri Lanka could give a lead in this endeavour by at least offering the facilities for young Sri Lankans to master some of these languages so that they could respond to queries from internet users who do not speak English. That would be putting the horse before the cart – a sensible thing to do.

(The writer was a former Country Manager, Japan of Air Lanka – currently SriLankan Airlines – when the National Carrier began services to Tokyo in July 1984. He also served as Manager for the National Carrier in Maldives, Germany and London among other locations. He can be reached via email [email protected].)