Sri Lanka’s aviation sector stirs to life

FITS Air acquires an Airbus A320

FITS Air, formerly ExpoAir, has recently taken delivery of an Airbus A320, becoming the first private airline in Sri Lanka to do so. This is a landmark occasion for Sri Lankan aviation, one that the airline’s owner’s hope will usher in a new and successful era. In a previous incarnation, the largest type operated by the airline was the Douglas DC-863CF cargo aircraft seen above.

The first aircraft, registered OE-IOM and owned by Aercap, the world’s largest aircraft leasing company, arrived in Colombo a few days ago. Bearing Manufacturer’s Serial Number (msn) 3547, the A320 was first delivered to Jetstar Airways of Australia in July 2008. After serving in Australia for six years, it served another six years in the Pacific with Air Caledonie International, before being returned to the lessor during the COVID-19 shutdown of the industry.

Reports indicate that a second A320, msn 4552, which has been with Indigo Airlines of India since 2010 and registered VT-IGZ in that country, is due in April. These large jets will be additions to FITS Air’s fleet, which currently comprises an ATR-72 twin-turboprop and two Cessna Caravans used for charters and scheduled domestic flights.

The airline has a long history of operating freight aircraft since its origin as part of Expolanka Holdings. With the acquisition of that company by Japanese logistics firm SG Holdings, FITS Air was spun off as an independent company.

Types operated earlier

FITS operated another Airbus A321 passenger aircraft in an all-cargo configuration (with seats removed) for a short time during the pandemic. Previously, a McDonnell Douglas MD-82F dedicated freighter was operated out of Colombo for several years. But this aircraft, bearing Sri Lankan registration 4R-EXM, has since been leased to an airline in Mexico.

ExpoAir has also operated a Douglas DC-8-63CF freighter aircraft registered 4R-EXJ (photo above) and a small number of Fokker F.27 Friendships previously. The company also utilized an Ilyushin Il-18 Soviet-built freighter for some time.

With considerable expertise in the freight and logistics sphere, FITS is expected to run a successful business. At the time of writing, the airline appears to be concentrating on the cargo market, with a larger wide-body freighter, probably an Airbus A330, due later this year. It appears that it intends to enter Asia’s hyper-competitive passenger market, as well. A future column will discuss this in more detail.

SriLankan sues Airbus

Meanwhile, national carrier SriLankan Airlines has grabbed the headlines with a report that it has launched a USD 1 billion lawsuit against Airbus for ‘damages, loss of reputation, reimbursement of costs and interests’. The airline has also demanded that Airbus cancel the purchase agreement for four A350-900 aircraft and return the pre-delivery payments of USD 19 million, which have already been paid.

The A350-900 airplanes in question were ordered in 2013 for delivery beginning in 2020. The purchase price for each was in the region of USD 160 million. Currently, due to the implosion of the airline industry caused by the COVID-19 pandemic, those same aircraft have a market value of around USD 142 million, according to Ishka Global, an aviation consultant.

SriLankan has recently seen a drastic erosion of its financials, with the 2018/19 financial year losses ballooning to USD 262 million, followed by USD 263 million in 2019/20. Estimated losses for 2020/21 are expected to be less than USD 250 million despite the pandemic, due to some rental relief given by the aircraft leasing companies.

Even if SriLankan were likely to win the lawsuit against Airbus, which seems unlikely, the potential windfall would not come even close to covering the airline’s historic accumulated losses, which total in excess of USD 2.3 billion since its inception in 1979.

 

 

 

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