SriLankan Airlines’ losses in excess of US$56 mln during airport closure
SriLankan Airlines is set to lose at least US$56 million in revenue in addition to other costs owing to the 3-month day-closure of the Bandaranaike International Airport (BIA) next year for emergency repairs on an ageing runway. “Approximately $56 million will be lost in revenue due to cancelled flights. Other costs due to disruption will add to this total,” said Capt. Suren Ratwatte, CEO of the troubled national carrier, on Friday in response to written questions from the Business Times. Earlier this week, the airline said the January 6 to April 6 closure will result in a reduction of at least 15 per cent in seat capacity for all airlines.
It was also stated by national carrier chairman Ajith Dias, to reporters at a SriLankan event on Tuesday, that the airline will take over all operations of budget carrier Mihin Lanka from October, as per an earlier cost-cutting schedule. According to official airport figures, there were nearly 10 million passenger movements at the BIA in 2015 while in January to March it was around 2.4 million. A 15 per cent drop in seat capacity would be a loss of around 361,000 seats during these three months. Civil Aviation Authority Director General H.M.C. Nimalsiri said that while there would be a reduction in flights most have rescheduled and the greater share of the burden of cancellations would (only) affect SriLankan Airlines. Mr. Dias, noting the urgency of SriLankan’s crisis, said that the carrier needed an international management partner.
“Hopefully they will come with money as we have a carry forward debt and the government cannot continue to subsidise all the time.” SriLankan Airlines’ has reduced its losses by 29 per cent while operating losses have improved by 70 per cent, he said. In the meantime, Capt. Ratwatte said the three routes that the airline has already or plans to discontinue – Frankfurt, Paris and Rome – accounted for a total number of 269,970 seats in the 2015 -2016 financial year. Industry analysts said this number of passengers including tourists, needs to find accommodation in other carriers which for the first three months (around 67,000 seats) would be a tall order given the restricted flights in January-March.
The national carrier chairman told reporters that the plan would be to take over Mihin Lanka’s aircraft which would be re-branded as SriLankan Airlines and marketed at a different price scale. The airline’s four aircraft would be reduced to three by the time of the take over as one aircraft is being taken over by the leased party. A second aircraft would be returned to the lessor in January leaving only two aircraft to be carried over by SriLankan Airlines. Plans are being worked out to ensure that the pilgrim traffic sectors like Varanasi would be priced differently with a slight increase in its existing Mihin Lanka rates, Mr. Dias said. Other sectors would continue but rates would be slightly less than SriLankan Airline’s flights, the chairman said.