SriLankan Airlines records profit despite adverse operating conditions

Sri Lankan Airlines recorded a nett profit of US$1.4 million for the financial year 2004/5, down 75.58%.

“Our expenditure on fuel has risen by more than 70%, and every one US cent increase in oil adds a US$1 million surcharge to our operating costs,” explained CEO Peter Hill. “However, despite these circumstances, we have achieved a modest profit and this is largely due to the dedication of every one of our staff.”

Despite disruption both to tourism and the normal commercial activities following the 2004 Tsunami, Hill said SriLankan had stuck to its expansion plans, “The airline has a long-standing tradition of rising to face the challenges that spring up in its path, and we have continued to seek opportunities to adapt and grow.

“In addition, we have faced increased competition from low cost carriers and competitors that are heavily supported by their respective governments, enabling them to offer travel at below cost in a move that would be commercial suicide for operators such as SriLankan.”

During the past year, the Sri Lankan carrier has increased frequencies to London, Bangkok, Singapore and Kuala Lumpur; enhanced its Middle East and Indian sub-continent networks, planned the launch of a Beijing service, boosted its codeshare operations with Emirates to include more European destinations as well as New York, and has also introduced e-ticketing throughout its network.

“Overall, revenues have risen 15.08% while passenger numbers were up 17.48%, even despite the huge drop experienced in the months immediately after the Tsunami,” said Hill.

Two new Airbus 320s plus two De Havilland Turbo Otter aircraft have been introduced in to the fleet while total flights flown rose 28.86% and average load factor reached 70.04%, up slightly on the previous year.

“While operations continue to pose a challenge, we have great expectations for the coming year when the new flight kitchen and expanded cargo centre will open, adding greatly to the capacity of these divisions,” said Hill.

“We are confident that Colombo will take shape as a major aviation hub in South Asia, and tourism to Sri Lanka will continue to regain its momentum,” concluded Hill.

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