Sri Lanka, Asian Leopard shows its prowess

In financial year 2014-15, SriLankan Cargo uplifted 101,878 tons, registering an 8 per cent increase over the previous year



Unlike the Asian Tigers of Thailand, Indonesia and others, Sri Lanka is known as the Asian Leopard as it boasts of the world’s largest population of leopard. And Sri Lanka’s economy is referred to as ‘Leopard Economy’, small economy at about US$80 billion GDP per annum.


However, the Asian leopard is among the fastest growing economies in Asia with the World Bank pegging the GDP growth rate at 7 per cent and sustainable through to 2020.


8 Per Cent Growth


After political instability in the island nation, normalcy returned few years back and Sri Lanka is on a strong development path and investments are pouring in from different parts of the world, predominantly from China and India. The impact of this can be seen on air cargo which is experiencing positive growth, even though world markets remain subdued. Not just the national carrier SriLankan Airlines, but also others like Emirates have benefitted from this growth. In financial year 2014-15, SriLankan Cargo uplifted 101,878 tons, registering an 8 per cent increase over the previous year. SriLankan Cargo contributed about 12 per cent of the airline’s revenues with net contribution of US$50million in 2014-15.


SriLankan Airlines is rapidly expanding its modern Airbus fleet and currently operates with 21 aircraft, comprising 7 A330-300, 6 A330-200, 6 A320-200 and 2 A321-200 aircraft. SriLankan Cargo, the ‘Hub in the Ocean” provides convenient connections to its global route network of 99 destinations in 47 countries in Europe, the Middle East, South Asia, Southeast Asia, the Far East, North America and Australia and is a vital link in the supply chain of leading brand named product manufacturers who depend on speedy and reliable delivery in a world of ‘just in time’ manufacturing.


Hub in the Ocean


The Head of Cargo, SriLankan Cargo, ChamaraRanasinghe said that the Hub in the Ocean is conveniently located in the premises of the Bandaranaike International Airport with an impressive storage space of over 25,000 square meters and has an unparalleled advantage of being strategically positioned in the Indian Ocean between the commercial centers of the East and West. He said that in 2014-15, the drivers for growth came from India, Middle East and China.


SriLankan Cargo has an AN12F, freighter aircraft which has a payload of approximately 18 tonnes each and has the capacity to carry out-sized cargo, live stock, perishables or dangerous goods. This service currently operating to Maldives and India, connects important markets in the Far East, Middle East and Europe. Colombo, the home base of SriLankan Cargo, is used as a hub to connect the trade route from Far East to Europe.


Modern Cargo Terminal


The fully equipped Cargo Terminal located at Bandaranaike International Airport Katunayake is the sole handling agent for all airlines operating into Sri Lanka and moves over 200,000 metric tonnes of cargo annually offering the most sophisticated storage and efficient handling.


Almost 90 per cent of the transhipments through Colombo hub is moved by SriLankan Airlines, according to Ranasinghe. The average handled volume of transhipments per annum is over 50,000 metric tons which is approximately 25 per cent of the total handled (200,000 metric tonnes per annum). At the Colombo hub, SriLankan uses almost 50 per cent of the total capacity in the two cargo terminals which in total has a floor area of 20,000 sq.mtrs and a handling capacity of 300,000 MTS/annum.


Looking good ahead


Ranasinghe said that the forecasts released by the International Air Transport Association (IATA) highlighted Sri Lanka as one of the five fastest growth international freight markets over the period 2011-16, with an average growth rate of 8.7 per cent. Considering this, the SriLankan air cargo industry is looking good ahead. He said that there has been consistent increase in uplifted tonnage year on year with annual average growth of nearly 7 per cent. This increase in tonnage could be considered remarkable due to the fact that many leading global airlines have increased their freighter frequencies and wide body passenger belly operations to Colombo, thus resulting in an over capacity situation. The key markets for SriLankan air cargo industry are USA, UK, Germany, France and the Middle East. These markets have been named by IATA to be the super powers in the international freight industry by 2016.


Upsurge in demand ?


IATA forecasts on not just SriLankan airlines but others too that there will be yield weaknesses primarily with the lower oil prices and stronger capacity growth. However, he was optimistic that there would be an upsurge in future demand into markets such as the Middle East and Maldives, which were already seeing increasing demand for perishables.


Challenges


‘Our biggest challenge is payload restrictions faced on long Europe bound routes, but Europe being one of our key markets the team puts a lot of hard work to service our customers duly ’, said Ranasinghe. ‘This has been an issue over the years, but now we have a plan in place to overcome same’. SriLankan airlines cargo has now have tied up several BSAs (block space agreements) on major carriers to Europe and beyond via the Middle East. SriLankan Cargo operates scheduled freighters to key Indian markets, supplementing its scheduled narrow body line flights (A320 aircraft). ‘We plan to expand our freighter network in the region and to further connect Colombo with our main O & Ds, such as China and Europe in the near future’, stated Ranasinghe.


Emirates 30 year association


As mentioned earlier, key global airlines have benefitted from SriLankan cargo growth. One of them is Emirates which is associated with SriLankan air cargo since April 1st, 1986. Thirty years later, Emirates has logged 56 million miles, transported thousands of tonnes of cargo and continues to connect Sri Lanka to the world, with 34 flights a week to Dubai, Malé and Singapore.


With approximately 12,000 seats and 780 tons of cargo carried per week each way, Emirates’ service to Sri Lanka has proven to be an indispensable resource for travellers, exporters and importers over the years. The airline has already announced it will increase capacity further with the addition of a fifth daily flight between Colombo and Dubai from 1st August 2016.


“We would like to thank all our customers and industry partners in Sri Lanka for their long-standing support over the years. We are proud to contribute to the country’s thriving tourism and trade industry, connecting Sri Lanka with more than 150 destinations across six continents. Over the past few decades, we introduced new products on the route and provided an award-winning inflight and on ground experience to Sri Lankan travelers. It’s been a remarkable journey and we look forward to offering further choice and excellent value for money to our customers in Sri Lanka,” said Ahmed Khoory, Emirates’ senior vice president, Commercial operations- West Asia and Indian Ocean.
Emirates has recorded solid year-on-year growth in Sri Lanka over the years, carrying nearly four million passengers on the route in the last two and half decades. Sri Lanka has also emerged as an important cargo destination for the airline in the region as Emirates SkyCargo continues to be a preferred carrier for the country’s exports.


Boosting trade


“West Asia has always been an important growth region for SkyCargo. Over the past 30 years, we’ve seen the route perform very well, with increasing volumes of cargo carried out of Colombo to important markets in Europe and the Americas via our hub in Dubai. When combined with the efficiency of one of the youngest fleets in the skies, unrivalled ground-handling facilities, and the very latest information technology, Emirates SkyCargo is the ideal partner for Sri Lankan-based businesses as they look to boost trade,” said JassimSaif, Vice President Cargo Commercial – West Asia and South East Asia.


Key Colombo exports include ready-made garments, fruit and vegetables, betel leaves, cut foliage and edible fish, with the latter accounting for over 40 per cent of Sri Lanka’s total air cargo tonnage in perishables. Since the inception of the Airline in 1979, SriLankan Cargo has been continuously supporting the country’s fast growing export industry. There is no looking back.