SriLankan Airlines looks to partnerships, digital and e-commerce in tough cargo conditions

SriLankan Airlines is hoping to capitalise on e-commerce flights to China, interline partnerships and digitalisation to combat tough air cargo market conditions.

Speaking to Air Cargo News, SriLankan Airlines general manager cargo Chaminda Perera said that the export market from Sri Lanka is affected by both global and local challenges.

He said the ongoing Ukraine-Russia war, China-US trade disruptions and reduced consumer spending due to inflation were hitting export volumes.

Meanwhile, the fuel shortage on the island also hindered companies’ ability to function last year.

The US, UK and European countries are the main airfreight export destinations from Sri Lanka with key commodities including fashion garments, tuna fish, live foliage, fruits and vegetables.

“The export market is experiencing a challenging time owing to reduced production of agri-products and fashion garments,” said Perera. “Exporters were further challenged by the fuel crisis which added to the constraint.

“The restrictions on imports made the matters worse for carriers operating to Sri Lanka. Whilst the country is heading to normalcy, the exports for the year 2023 will not have significant growth against the increasing passenger aircraft belly capacities from Sri Lanka.”

He added: “Therefore air cargo is further challenged by the yield erosion that hinders the revenue generation of airlines that makes it difficult to cover the cost of operations.”

To help meet the challenges, the airline is looking to partnerships and will also invest in digitalisation.

“SriLankan Cargo, the cargo arm of SriLankan Airlines, presently uses the belly capacity of passenger aircraft operated by the airline,” said  Perera. “SriLankan Cargo is planning to increase the number of interline cargo agreements with other airlines to enhance the capacity and provide customers with the opportunity to carry cargo to destinations beyond SriLankan network.

“We presently have 44 agreements for over 200 destinations. By looking at technological and industry trends, SriLankan Cargo has initiated steps to partner with online e-booking platforms as distribution channels to expand the market reach and improve market visibility.”

The carrier is also quickly ramping up its flight numbers.

In the financial year 2019/2020, the carrier operated more than 15,000 flights but this reduced to around 2,000 the following year during the peak of the pandemic.

However, in the current financial year, by the end of January, SriLankan Airlines managed to operate over 9,000 flights indicating that operations are close to returning to pre-pandemic levels.

Looking ahead, there are plans to add capacity into China.

“Further, capitalising on market opportunities, with the relaxation of Covid-19 rules and regulations in China, the airline plans to commence full-scale operations and operate to Guangzhou, Shanghai and Beijing with nine frequencies per week from the month of April,” said Perera.

“China holds the largest market for e-commerce, by utilising operations to China, SriLankan Cargo plans to capitalise on the growing e-commerce market. SriLankan Airlines the national carrier of SriLanka is adapting to novel market conditions and overcoming challenges to reach pre-pandemic levels at a faster pace.”