Group 1 Consultancy

A DEEP DIVE INTO SRILANKAN AIRLINES

 SWOT
A N A LY S I S
 STRENGTHS
• Strong industry experience with a history of over four decades
• Excellent air safety record
• National carrier of the country & a major stakeholder at the
BIA
• Strong vertical integrations with related services
• Excellent inflight services centered around ‘Sri Lankan
Hospitality’
• Member of the ‘Oneworld’ airline alliance
• Backed & owned by GoSL
 WEAKNESSES
• Backed & owned by GoSL
• High levels of corruption
• Relatively excessive staff across the board
• Operational & financial inefficiencies
• Highly unionized
• Ageing fleet
• Inadequate diverse product portfolio
 OPPORTUNITIES
• The island’s strategic geographical location
• Sri Lanka being an attractive tourist destination
• Ability to reach further destinations
• Increasing demand for domestic air travel
• Horizontal integration into complimentary business areas
• Strategic partnerships
• Growing cargo carrier market
 THREATS
• Current economic & political environment in Sri Lanka
• Downgraded credit rating of Sri Lanka
• Increasing fuel prices in the global markets
• Increasing competition in the airline industry
• Business travel replaced with virtual environments
PESTEEL
A N A LY S I S
Key Area Favourable Unfavourable

Ability to absorb Political instability in Sri

POLITICAL consecutive losses by Lanka questions the
the GoSL going concern of the
airline
 Key Area Favourable Unfavourable

Sri Lanka as a growing Current economic

ECONOMICAL tourist destination instability has deterred
inbound tourists
Key Area Favourable Unfavourable

Attract diverse Having to

SOCIAL passengers to SL by accommodate high
marketing the 'Sri customer expectations
Lankan hospitality' for no extra revenue
tagline
 Key Area Favourable Unfavourable

Infusion of efficiencies Loss of business travel

TECHNOLOGICAL resulting customer due to advance
convenience and technology substituting
reduction in cost air travel
 Key Area Favourable Unfavourable

Use of renewable Growing pressure from

ENVIRONMENTAL energy and sustainable pressure groups over
aviation fuels boosts the carbon footprint of
the image while driving the airline industry
down costs
Key Area Favourable Unfavourable

CSR projects to boost Bribery being an

ETHICAL the image of the airline industry norm when
securing aircraft deals
Key Area Favourable Unfavourable

Strict customer-centric Strong labour laws in

LEGAL global aviation laws Sri Lanka makes it
build public confidence difficult to retrench
on the aviation industry
KEY IMPROVEMENT
AREAS & THEIR
S T R AT E G I C
SIGNIFICANCE
 Key Improvement Current Challenges Strategic Significance
Area

• 13 consecutive years Over a decade of

Financial inefficiencies of financial losses continuous loss making
resulting in continuous resulted in loss of
loss making • Increase in investor confidence
operational costs and affected the going
concern of the airline
 Key Improvement Current Challenges Strategic
Area Significance

• Unsuitable political Political interferences

appointments led to flawed decisions
being made that were
Political interference & • Absence of industry not in the best interest
corruption experience at of the airline
executive director
levels

• Lack of
transparency in
transactions that are
of strategic nature
Key Improvement Current Challenges Strategic Significance
Area

• Over staffing Operational

inefficiencies have led
• Lagging in to serious financial
Operational technological implications,
inefficiencies advancement reputational loss and a
compared to decline in customer
competitors experience

• Lack of effective
contingency plans
Key Improvement Current Challenges Strategic
Area Significance

• Ageing fleet Customer experience

plays a key role in
• Inadequate diverse
products
attracting customers
to Sri Lankan
Rapidly deteriorating • Lack of infusion of
customer experience technology to empower
customers

• Very low social media

engagement with current
& potential customers

• Decline in quality of the

overall flight experience
 OUR
R E C O M M E N D AT I O N S …
 Issue Recommendation Timeline Output Outcome

Financial Public-Private Immediate Change in Turnaround

inefficiencies Partnership – Short ownership in financials
1 resulting in Term structure of leading to
continuous the airline positive
loss making bottom line
 Issue Recommendation Timeline Output Outcome

Political Replacing key Immediate Strong Good

interference management – Short Management Governance &
& corruption team members Term Team with transparent
2 with suitable the right dealings
industry experts person for giving priority
who possess the right job to the
strong work company's
ethics values & best
interests
 Issue Recommendation Timeline Output Outcome

Operational Establishing a Short Effective Optimal usage

inefficiencie strong & Term Operational of resources to
3 s independent systems increase
management productivity and
structure lower costs
 Issue Recommendation Timeline Output Outcome

Deterioratin Introduction of Medium - Positive Increase in

g Customer modernized Long Term customer traffic volumes,
4 Experience products to ratings leading to
match & leading to higher top-line
exceed industry strong brand & bottom-line
standards image
CONCLUSION