Financial Times

Lack of passengers and increasing fuel prices have made the current year a tough one for the national carrier SriLankan Airlines.

Recovering from the devastation of the tsunami, the airline hoped for a better passenger turn out this year. However, plans have not gone accordingly, as the country’s situation has not been favourable for the tourist industry.

“We were planning to rebuild after the tsunami last year, unfortunately because of the incidents that have occurred this year it’s not going to be a successful year as we hoped,” Barry Brown, Sri Lankan Airlines Chief Financial Officer told The Sunday Times FT after the launch of the International Aviation Academy (IAA) by the airline.

The main reason for a drop in passengers was due to the political instability prevalent in the country this year with a downward trend, seen mostly among European travellers. “We see a downward trend from Europe. It is predominantly where the international news agencies are carrying rather damaging reports of the country and tend to raise old incidents which took place years ago, and put it fresh on the peoples mind and with today’s incidents it has a very negative impact on tourism,” Brown said.

The other major set back is the increased fuel prices. “The fuel prices are crippling the aviation industry, not only SriLankan,” he said. A one cent increase in the fuel prices adds $1 million to the airline cost so the airline is looking at an increased cost of about 30 million for this year, Brown said.

Further he explained that SriLankan needs more passenger traffic in order to recover the additional fuel costs but unfortunately there is a drop in passenger turn out.

“We are getting hit from a lack of passengers and the increasing fuel prices,” said Brown adding that the year is going to be tough for SriLankan and also for the industry. However all is not gloomy for the airline.

The newest addition to the Indian destinations is Goa which would be launched later this year. At present SriLankan has 90 flights a week to India and the country will be the key market for Sri Lankan in the future.

Newly launched IAA, which is the brainchild of SriLankan Airlines’ human resource division, will cater to the increasing demand for airline industry specific training.

The academy will bridge a long standing void for an internationally acceptable training facility,” said Peter Hill, SriLankan Airlines Chief Executive said.

The academy is the first industry training academy with accreditation from leading international bodies including the International Air and Transport Association (IATA) City and Guild and Edexcel International.