National carrier SriLankan Airlines sees a recovery to pre-pandemic revenue levels by the end of next year as Covid-19 vaccines roll out globally and its home country loosens air travel restrictions, its chairman said.
The state-owned airline's revenue should recover to 75-80 per cent of pre-crisis levels by 2021-end as the Indian Ocean nation plans to reopen its international airports for travellers next month, Ashok Pathirage told The National. The carrier aims to return to profitability by 2022.
"We think the worst is in the past now and we can look forward to gradual improvement in aviation, travel and tourism," Mr Pathirage said in a phone interview. "The vaccine is great news for all of us ... hopefully it will release restrictions and people will have confidence to travel again."
The optimistic outlook comes as global carriers are facing the worst crisis in the history of aviation as the Covid-19 pandemic decimated air travel demand. Airline bankruptcies are on the rise with the industry set to lose an estimated $157 billion across 2020 and 2021, according to the International Air Transport Association (Iata).
To help its flag carrier weather the crisis, Sri Lanka's government pledged $500 million in financial aid, of which $150m was disbursed this month, Mr Pathirage said. The rest of the funds will be disbursed over two years.
"With Covid, we have taken a fairly large hit, so this is to support our cash situation," he said, without providing details. "The government realises the airline is important to develop the country as a tourist destination."
Governments around the world have disbursed some $173bn in aid to their cash-strapped airlines, according to Iata.
SriLankan Airlines, which recorded about $70m a month in revenue pre-crisis, is currently making about 30-35 per cent of that, the chairman said. He expects a recovery to 40 per cent of pre-Covid revenue levels in December on higher demand for repatriation flights and air cargo.
Sri Lanka's government is expected to re-open its international airports for visitors in January after a shut-down since March when the first local coronavirus case was detected.
"That is very positive news," Mr Pathirage said. "But from an airline perspective, we don’t expect business to jump-start. It's a gradual process and we need to start marketing. With the vaccine, tourists will be more confident. We need to wait and see."
Tourism is vital for the island nation, which attracted around 2 million visitors last year and the industry contributes about 11 per cent of its gross domestic product.
Sri Lanka has imposed strict rules to curb the spread of the virus. By Thursday, it had recorded more than 30,000 Covid-19 cases and 144 deaths, while 21,800 people have recovered, according to Worldometer, which tracks the spread of the virus globally.
"We will look at how to reshape SriLankan into a very strong regional carrier competing with the best."
"If you want to bring passengers, no one will quarantine for 28 days, we have lobbied the government and health regulators to come up with something practical without compromising on health and safety standards," Mr Pathirage said.
Iata has called on governments to adopt pre-flight Covid testing instead of demand-stifling quarantine measures.
Sri Lanka's government is yet to announce the required health measures to reopen its borders to international travellers but Mr Pathirage said an ideal scenario would entail PCR testing before and on arrival, a seven-day quarantine period and another test before release.
SriLankan Airlines is currently operating a limited number of passenger flights using 70 per cent of its all-Airbus fleet of A330s, A320s and A321s, while the remaining 30 per cent of aircraft are still grounded.
To preserve cash and control costs, the airline re-negotiated its aircraft leasing contracts, leading to savings of about $150m over the next five years, the chairman said.
The carrier offered 500 employees a voluntary retirement scheme a week ago, after ending the use of outsourced and contract workers, he said. This will reduce the workforce to 5,000 from 7,000.
"After Covid, SriLankan Airlines will be in much better shape to return to profitability," he said. "Our plan is to make money by 2022."
The operator is planning new routes next year to Sydney, Seoul, Kathmandu and European cities, the chairman said. It is seeking to resume flights into India, one of its key markets, and increase frequencies to Dhaka.
In terms of cargo, the airline is seeking to triple or quadruple its freight volumes over the next two years to reduce reliance on passenger operations, Mr Pathirage said.
To drive its cargo expansion, the airline is preparing a request for proposals (RFP) to procure its first two freighters, he said.
"There's so much cargo business at the moment. Exports have picked up, so there’s huge demand and we want to help the national economy," he said. "One lesson learnt from Covid is not be completely dependent on passenger business and to look for other alternatives."
In the longer term, the carrier plans to become a regional hub in Asia with a larger fleet and an expanded airport at its Colombo base, Mr Pathirage said.
Opportunities lie in boosting traffic from India and ferrying them, via Colombo, to Far East destinations such as Singapore, Australia and China, he said, but acknowledged competition from long-haul Gulf giants such as Emirates. Tapping into Sri Lanka's substantial tourism potential is another growth opportunity.
"We will look at how to reshape SriLankan into a very strong regional carrier competing with the best," Mr Pathirage said.
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The five pillars of Islam
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
How it works
Booklava works on a subscription model. On signing up you receive a free book as part of a 30-day-trial period, after which you pay US$9.99 (Dh36.70) per month to gain access to a library of books and discounts of up to 30 per cent on selected titles. You can cancel your subscription at any time. For more details go to www.booklava.com
UAE currency: the story behind the money in your pockets
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
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AS IT STANDS IN POOL A
1. Japan - Played 3, Won 3, Points 14
2. Ireland - Played 3, Won 2, Lost 1, Points 11
3. Scotland - Played 2, Won 1, Lost 1, Points 5
Remaining fixtures
Scotland v Russia – Wednesday, 11.15am
Ireland v Samoa – Saturday, 2.45pm
Japan v Scotland – Sunday, 2.45pm
Mohammed bin Zayed Majlis
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Mohammed bin Zayed Majlis
The five pillars of Islam
if you go
The flights
Air France offer flights from Dubai and Abu Dhabi to Cayenne, connecting in Paris from Dh7,300.
The tour
Cox & Kings (coxandkings.com) has a 14-night Hidden Guianas tour of Guyana, Suriname and French Guiana. It includes accommodation, domestic flights, transfers, a local tour manager and guided sightseeing. Contact for price.
KILLING OF QASSEM SULEIMANI
EA Sports FC 26
Publisher: EA Sports
Consoles: PC, PlayStation 4/5, Xbox Series X/S
Rating: 3/5
What are the influencer academy modules?
- Mastery of audio-visual content creation.
- Cinematography, shots and movement.
- All aspects of post-production.
- Emerging technologies and VFX with AI and CGI.
- Understanding of marketing objectives and audience engagement.
- Tourism industry knowledge.
- Professional ethics.
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Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
Zayed Sustainability Prize
First Person
Richard Flanagan
Chatto & Windus
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
MATCH INFO
Newcastle United 3
Gayle (23'), Perez (59', 63')
Chelsea 0
Mohammed bin Zayed Majlis
Killing of Qassem Suleimani
MATCH INFO
Liverpool 3
Sadio Man 28'
Andrew Robertson 34'
Diogo Jota 88'
Arsenal 1
Lacazette 25'
Man of the match
Sadio Mane (Liverpool)
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
UAE central contracts
Full time contracts
Rohan Mustafa, Ahmed Raza, Mohammed Usman, Chirag Suri, Mohammed Boota, Sultan Ahmed, Zahoor Khan, Junaid Siddique, Waheed Ahmed, Zawar Farid
Part time contracts
Aryan Lakra, Ansh Tandon, Karthik Meiyappan, Rahul Bhatia, Alishan Sharafu, CP Rizwaan, Basil Hameed, Matiullah, Fahad Nawaz, Sanchit Sharma
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Iran's dirty tricks to dodge sanctions
There’s increased scrutiny on the tricks being used to keep commodities flowing to and from blacklisted countries. Here’s a description of how some work.
1 Going Dark
A common method to transport Iranian oil with stealth is to turn off the Automatic Identification System, an electronic device that pinpoints a ship’s location. Known as going dark, a vessel flicks the switch before berthing and typically reappears days later, masking the location of its load or discharge port.
2. Ship-to-Ship Transfers
A first vessel will take its clandestine cargo away from the country in question before transferring it to a waiting ship, all of this happening out of sight. The vessels will then sail in different directions. For about a third of Iranian exports, more than one tanker typically handles a load before it’s delivered to its final destination, analysts say.
3. Fake Destinations
Signaling the wrong destination to load or unload is another technique. Ships that intend to take cargo from Iran may indicate their loading ports in sanction-free places like Iraq. Ships can keep changing their destinations and end up not berthing at any of them.
4. Rebranded Barrels
Iranian barrels can also be rebranded as oil from a nation free from sanctions such as Iraq. The countries share fields along their border and the crude has similar characteristics. Oil from these deposits can be trucked out to another port and documents forged to hide Iran as the origin.
* Bloomberg
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The years Ramadan fell in May
COMPANY%20PROFILE%3A
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The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
Squads
Australia: Finch (c), Agar, Behrendorff, Carey, Coulter-Nile, Lynn, McDermott, Maxwell, Short, Stanlake, Stoinis, Tye, Zampa
India: Kohli (c), Khaleel, Bumrah, Chahal, Dhawan, Shreyas, Karthik, Kuldeep, Bhuvneshwar, Pandey, Krunal, Pant, Rahul, Sundar, Umesh
The five pillars of Islam
Zayed Sustainability Prize
COMPANY%20PROFILE
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6.55pm: Al Maktoum Challenge Round-3 Group 1 $600,000 (D) 2,000m; Winner: Matterhorn, Mickael Barzalona, Salem bin Ghadayer.
7.30pm: Dubai City Of Gold Group 2 $350,000 (T) 2,410m; Winner: Loxley, Mickael Barzalona, Charlie Appleby.
