SriLankan Airlines is aiming to attract significant transit traffic beyond Colombo to India and the Maldives to support its new daily service from Melbourne. However, the airline may ultimately be forced to rely mainly on the small albeit growing Australia-Sri Lanka market because it is only offering quick connections from Melbourne to three of its 19 international destinations in South Asia.
SriLankan announced in late May-2017 plans to launch on 29-Oct-2017 a daily service from Melbourne to Colombo using A330-200 aircraft. SriLankan CEO Suren Ratwatte was in Australia in early August to promote the new service and stopped in Sydney to speak at CAPA’s Australia Pacific Aviation Summit. “It’s good to get our profile raised here in Australia and remind the Australian market that we exist and we offer a unique route network that will be great use for both business and leisure travellers from Australia,” Capt Ratwatte told Blue Swan TV following his 1-Aug-2017 presentation at the CAPA summit.
“We have an unrivalled route network in India,” Capt Ratwatte added. “That allows any traffic going to the subcontinent to have seamless connectivity out of Melbourne to almost anywhere in the subcontinent, which I think is a huge marketing advantage.”
SriLankan serves 14 destinations in India and five destinations in three other South Asian countries (Bangladesh, the Maldives and Pakistan), according to OAG schedule data. However Blue Swan analysis of schedule data shows that from Melbourne quick connections will be available to only three of SriLankan’s 19 South Asian destinations: Bangalore, Chennai and Delhi.
SriLankan’s Melbourne-Colombo flight will depart Melbourne at 455pm and land in Colombo at 1015pm. Most of SriLankan’s flights to India depart in the morning, resulting in overnight layovers of nine to 11 hours. The only exceptions are Bangalore, Chennai and Delhi, which have departures after midnight, resulting in layovers of two to three hours.
On the return sector, flights from Bangalore, Chennai and Delhi land in Colombo slightly over one hour before the 1150pm departure from Colombo to Melbourne. On most of SriLankan’s other Indian routes there is a layover in Colombo of six to seven hours on the return sector.
Male in the Maldives, a one-stop destination that SriLankan is promoting for outbound Australian leisure travellers, has a one hour connection on the return leg. However, the quickest connection from Melbourne to Male requires an overnight nine-hour layover in Colombo. SriLankan’s other South Asian destinations – Gan in the Maldives, Dhaka in Bangladesh and Karachi and Lahore in Pakistan – also require layovers of several hours in both directions.
SriLankan’s Melbourne flight also does not connect in either direction with London, its only remaining European destination following a 2016 restructuring, or with any of its nine destinations in the Middle East.
Fortunately for SriLankan, there is growing traffic in the local Australia-Sri Lanka market. Capt Ratwatte said Australia-Sri Lanka traffic grew 10% in 2015 and 12% in 2016.
Australian visitor numbers to Sri Lanka were up 17% in 2016 to 73,000, according to Sri Lanka Tourism Development Authority data. Sri Lanka is too small of a source market to be tracked by Tourism Australia; there were only approximately 30,000 Sri Lankan visitors to Australia in 2016 based on the Australian Bureau of Statistics.
SriLankan will have a competitive advantage in the local Melbourne-Sri Lanka market as it will be the only airline operating nonstop flights. The new nonstop fight should be able to stimulate demand, attracting more Australians to holiday in Sri Lanka as well as more Sri Lankans to holiday in Australia.
SriLankan has already started to promote Australia as a destination in Sri Lanka and Capt Ratwatte said there is huge potential for leisure and student traffic from Colombo. In Australia, he said SriLankan is targeting Australian leisure passengers heading to Sri Lanka as well as India and the Maldives.
SriLankan is also targeting visiting friends and relatives (VFR) and business traffic. In the VFR segment, SriLankan expects strong demand because Melbourne has the largest Sri Lankan community in Australia. “It’s a multi-faceted market,” Capt Ratwatte said.
However, the local Melbourne-Colombo market is obviously not big enough to fill up the nearly 100,000 annual one-way seats (including more than 6,000 lie flat business class seats) SriLankan will generate. India is the main target as it is a much bigger market than Sri Lanka from Australia. There are more than 250,000 Australian visitors to India annually as well as more than 250,000 Indian visitors to Australia.
But the long layover times on most Melbourne-India city pairs puts Sri Lankan at a competitive disadvantage compared to other airlines offering one-stop products in the Melbourne-India market – including AirAsia, Malaysia Airlines, Thai Airways and Singapore Airlines. Air India also operates three weekly nonstop flights from Melbourne to Delhi. Only in the Melbourne-Bangalore and Melbourne-Chennai markets is SriLankan offering a similar transit time to the existing competitors.
AirAsia and SIA will also continue to offer the quickest times from Melbourne to the Maldives, which is a relatively small market, attracting 24,000 Australian visitors in 2016. SriLankan should still be able to attract some Melbourne-Maldives and Melbourne-India traffic with low fares and stopover packages but the current schedule may prove challenging to sustain a daily service.