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Aeropolitics, Airline Management, Airline Mergers & Acquisitions, Airline Restructuring

Surinam Airways must ‘think Big’, with a Big vision for the future beyond just Suriname, too many small national carriers think ‘small’ and never achieve their full potential, sticking to old tried ways without much success, yet look at the success of COPA (Panama), Norway Air Shuttle (Norway), Ethiopian Airlines (Ethiopia), Ryanair (Ireland) to Singapore Airlines (Singapore), think Big, plan Big, act Big and do Big things and you become Big in time, step by step. But if you think small, plan small, act small you will always remain small and insignificant and most likely, not profitable.

Surinam Airways must ‘think big’, says aviation expert
Published on January 23, 2017 by Caribbean News Now by Ray Chickrie Email To Friend    Print Version

routemap.jpg By Ray Chickrie

PARAMARIBO, Suriname — In his assessment of Surinam Airways (SLM) (3 x B737-300’s and 1 x A340-300), aviation expert Tomas Chlumecky has called on the airline to “get out of the thinking small syndrome, and to take bold measures” to grow in the region because there is great potential for the national airline of Suriname. However, SLM needs to come up with a strategic vision to achieve profitability and growth.

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He especially called for the modernization of SLM’s fleet, product improvement, and expansion of SLM’s Guyana hub, which can be the vehicle for bringing tourists to the Guianas.

Chlumecky, a Canadian and Czech (EU) citizen, with 34 years of aviation experience, last August was in Suriname and met with officials from the government and SLM. He was previously in Suriname in the 1980s and is very familiar with SLM and the country. Over the years, he worked with 45 airlines in 30 countries as an analyst, adviser, aircraft salesman and aviation executive.

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Lack of Vision, Growth and Way Forward

“SLM needs a bold and realistic plan that looks at its strengths, weaknesses, opportunities and threats, and one in which SLM sells itself as a pan-Caribbean carrier. This plan in 3-5 years must show growth to 12 or more aircraft, and not all will be based in Paramaribo. Over that time, 70% of SLM’s revenue should come from investments outside Suriname. This means that SLM is growing outside of Suriname, and create jobs in Suriname. Then in the next phase, SLM becomes more marketable to prospective joint-venture (JV) partners and investors,” Chlumecky said.

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“They all want to see growth, and that can come from within the Caribbean region. You can’t sell SLM with only four aircraft, think big and act big,” he added.

There is room for growth, Chlumecky said. “Look today, you have Insel Air, but it has been now shut down, and there is Caribbean Airlines (CAL), but it is hurting. There is also PAWA Dominicana and Cayman Airways and that is really it for Caribbean based airlines catering to the Caribbean market.”

Chlumecky said that Suriname “totally lacks a vision to go develop tourism and SLM. SLM should be the driver of tourism, but its leadership has resigned to “giving up” and doing what is easy.”

On the other hand, Chlumecky said that “Suriname has a great tourism potential and SLM can be a major ‘Caribbean’ airline with many aircraft and many new jobs created in Suriname. This will take leadership, money, new strategy and people who can implement the strategy.”

Lack of Government Support, Corruption and Nepotism

For decades the government and, in particular, the ministries of transportation and foreign affairs have come under fire by SLM and private sector stakeholders for not doing enough to grow SLM and the tourism industry.

For example, the country has no tourism ministry or a tourism board with its own budget. As well, tourism legislation has been delayed now for almost five years. Bilateral air agreements with key countries are stalled. COPA Airlines, which wants to commence service to Paramaribo, has run into a bureaucratic stall. Work ethic in the country is poor and the president of the republic himself has condemned it. Some ministries are performing poorly.

There is little or no promotion in North America. Most of it is done in the Netherlands, where many expats living there are familiar with Suriname. Tourism can put Suriname on the map, make money and create jobs but SLM and the government will have to believe in this and be bold and ambitious to make it a reality, Chlumecky said.

Like many airlines in developing countries and right here in the region, such as Caribbean Airlines, poor performance, mismanagement, nepotism, political interference and corruption have plagued SLM’s growth and profitability. But the airline does have a strategic growth-plan according CEO Robbi Lachmising in an interview, which includes fleet renewal, improvement of the “SLM brand” and improving connectivity by increasing regional frequencies.

The government has also signed a contract with an international company to complete the modernization of the Johan Pengel Airport (JAP) to realize the goal of making JAP an SLM hub.

Confidence, Expansion and Improvement of Product

SLM needs to get out of the “we can’t do it; we are poor; we don’t have the money” mentality Chlumecky said. He recommends that SLM replace its “outdated aircraft that are over 25 years old. Go big, think differently; offer a new and better product with newer aircrafts with better inflight entertainment such as Wi-Fi.”

SLM is operating a single Airbus 340 on the Paramaribo-Amsterdam route, and three aging Boeing 737-300s (126 seats) on regional routes. Chlumecky recommends three Airbus-320 for the regional routes (to replace the 3 x B737-300’s initially, which would double the regional capacity by 104% as the seating and utilization of the new aircraft would be roughly double of the old and tired B737 fleet today.

He is stunned that, after decades, SLM is still using four-engined aircraft, started with DC-8-63’s then B747-300 and now A340-300 (2nd aircraft) on the Mid-Atlantic route instead of the Boeing 787 or the Airbus 350. Many in the industry are questioning why SLM isn’t yet extended range operation with two-engined airplanes certified (ETOPS), but they dropped the ball on that, just could not get ETOPS in time, which has to be a Red Flag about how things are poorly organized, run and implemented at SLM.

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According to Chlumecky, SLM is thinking of incorporating two Embraer-190 aircraft (100 seats) to replace the Boeing 737-300s. But in his assessment, this isn’t a good move. Why reduce the seat capacity when there is potential to grow, Chlumecky questioned.

However, according to Lachmising, SLM will increase frequency using smaller aircraft, and can still achieve growth. Only recently, SLM has upgraded its inflight entertainment system. The airline is now offering the latest Hollywood and Bollywood flicks. It already has award winning meal and beverage services.

The Guyana base is expanding to more routes. Passenger traffic increased 14% in 2016, and the trend will continue, especially that mega oil discoveries in that country may witness the economic transformation of Guyana.

These are some of the factors why SLM should enter a cooperation agreement with the government of Guyana. One in which Guyana is responsible for the commercial side of the operation such as deciding on routes, pricing, frequencies and SLM provides planes and crew. This is easy and cost effective to get an airline up and running quickly, Chlumecky asserted.

This is why he is of the opinion that SLM should add the Boeing 737-800 or Airbus 320 to its fleet to prepare for Toronto and New York City expansion. There are about 400,000 Guyanese in the New York City and Tri-state area and the route is very profitable. In fact, a Caribbean Airlines executive, Fazal Karim, said to the media two weeks ago that the “Guyana-NY route is one of our cash cows”.

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About Aviation Doctor - Helping aviation companies to transform the present into a more profitable tomorrow

I am a Canadian and EU national with an MBA and 33+ years experience in aviation business development with 20 years overseas and work in 25+ countries. A former investment/merchant banker (mergers and acquisitions to corporate turnarounds). airline and OEM senior executive and past owner of 6 successful aviation companies in 3 countries (executive jet charter/management companies, aircraft sales, aircraft broker, airline/aerospace consulting to aircraft insurance). I have a very diverse aviation background with 75+ aviation companies (45+ airlines of all sizes, OEM's, airports, lessors, MRO to service providers) as consultant, executive management, business analyst and business development adviser. Excellent success track record in International Business Development. Most work with airlines is with new start-ups and restructuring of troubled carriers. I sold new business jets, turboprops and helicopters for Cessna, Raytheon, Gulfstream to Eurocopter as an ASR as well as undertaking sales and marketing of commercial aircraft for Boeing, de Havilland, Dornier, Saab and Beechcraft. Brokered everything from LET-410's to B747's and from piston PA31 to G550 business jets. I look beyond the headlines of the aviation news and analyze what the meaning and consequences of the new information really means. There is a story behind each headline that few go beyond. Picked the name Aviation Doctor, as much of my work has been with troubled companies or those that want and need to grow profitably. I fix problems be in the business, and help with restructuring for a better tomorrow. You can reach me with comments or suggestions at: Tomas.Aviation@gmail.com and I comment a lot on Google+, my Facebook and LinkedIN.

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