The national carrier has set its sights on lowering losses budgeted at US$80 million in the current financial year, SriLankan Airlines CEO Kapila Chandrasena said. During an interview with the Business Times, he said that this would ideally mean the airline would be halving its losses during the year 2012/2013. The airline’s losses soared to [...]

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SriLankan losses to ease to $80 mln in 2012/13 FY

Sunimalee Dias
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The national carrier has set its sights on lowering losses budgeted at US$80 million in the current financial year, SriLankan Airlines CEO Kapila Chandrasena said. During an interview with the Business Times, he said that this would ideally mean the airline would be halving its losses during the year 2012/2013. The airline’s losses soared to US$137.81 million in 2011/12.

He believed this was almost a 100 per cent improvement and noted the airline was “tracking along the projections.”However, fuel price increases or decreases in the world market have contributed to some adjustments in their losses, Mr. Chandrasena observed. Meanwhile, though the airline’s CEO welcomed new competition based on news of the return of British Airways to Colombo it was evident that the airline had begun to worry on how to market itself better.

Mr. Chandrasena said Gulf carriers would increase capacity by selling tickets at comparatively reduced rates that had come in for opposition from SriLankan Airlines. “We protested against selling below the cost,” he said noting that they lacked the necessary cash reserves to engage in such moves. Currently the airline makes an 85% loss due to fuel price fluctuations in the world market and “excess capacity has diluted revenue with carriers dumping prices.”  He pointed out that since the airline seems to have a weak hold on the European route it was likely that they would withdraw aircraft from there and change frequencies .

The airline observed that the European recession is still taking the toll with a downturn in long haul travel, thereby affecting markets such as Sri Lanka. Currently, the airline would operate trans-continental flights to Europe and Asia, the CEO said. And while it would sustain its current destinations, he said they would be looking at increasing frequencies on Asian markets. In the meantime, the airline aims at continuing to expand its facilities and services with a second hangar, totaling aircrafts to 21, and increasing capacity at SriLankan Cargo in addition to installing new equipment there. Administration and Logistics Manager Martin McDonald speaking with the Business Times during a media tour of the Bandaranaike International Airport (BIA) this week said SriLankan Cargo would look to expand capacity vertically. In the future, he said they would be looking at installing an automated system known as the Automatic Storage and Retrieval System.

He pointed out that this year they expect a growth of 15-20% amounting to approximately 180, 000 MT compared to 160, 000 MT in 2011. About 25% of cargo is imports whereas 50% is exports, he explained. At the airline’s Engineering unit it was observed that an additional hangar was required as they were currently constrained due to the availability of just one hangar. At present this unit consisting of 420 technicians, 120 engineers and 110 support staff is looking out for work to with other airlines in a bid to increase revenues. So far the unit has attracted only two: Emirates and Air Blue.




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