$ 500 m boost for SriLankan Airlines

SriLankan Airlines is to get a better lift with the Government approving $ 500 million investment over the next five years encouraged by improved performance and strong future prospects in tandem with post-war revival.

“The Cabinet has approved the investment of a sum of USD 500 million for the development of SriLankan Airlines over the next five years,” national carrier’s Chairman Nishantha Wickremasinghe said yesterday.

Expressing appreciation to President Mahinda Rajapaksa and the Cabinet for their clear vote of confidence in national carrier the Chairman said at the same time “this infusion of funds brings a tremendous responsibility on the Airline to deliver on the expectations of our nation.”

It appears the flight towards meeting this had been embarked upon during the financial year ended on 31 March, 2011.

The airline announced yesterday that it has greatly reduced losses and is targeting a return to profitability within two years while driving the transformation of Sri Lanka into a regional hub for tourism and aviation.

SriLankan Airlines’ Net Loss After Tax was reduced to Rs. 202 million in 2010/11, compared to Rs. 6,034 million in 2009/10.

“SriLankan Airlines came out of the global recession by transforming itself and investing heavily - to secure the future of the National Carrier and in supporting the nation’s economic growth,” Chairman Wickremasinghe said.

Last year, the Government purchased the shares in SriLankan Airlines which were held by Emirates Airline, bringing the Government’s shareholding to 94.68%. The remaining 5.32% is held by employees.

National carrier’s CEO Kapila Chandrasena said: “The overall objectives in the year ahead will be to increase the quantum of revenue through high yielding business activities and bring SriLankan Airlines’ financial performance to a level of profitability. At the same time, the Airline will serve as a leading partner to our nation’s economic growth.”

The Airline carried 2.87 million passengers in 2010/11 an increase of 12% from the previous year’s 2.56 million.

“SriLankan will focus on each of its diverse areas of business, with particular emphasis on transforming our air transport operations to the point of profitability once again. The Airline’s ancillary businesses will complement our air transport operations and provide additional revenue streams to strengthen revenue and profitability,” added Chandrasena.

The Airline’s future strategy includes expansion of its global route network; increasing its aircraft fleet; building customer loyalty by enhancing the complete passenger experience; expansion of its domestic service SriLankan Air Taxi; enhancement of SriLankan Cargo’s global network and hub operation; development of SriLankan Ground Handling facilities at Bandaranaike International Airport (BIA); expansion of SriLankan Engineering’s aircraft maintenance facilities; increasing training facilities for external students; and expansion of catering operations for new and existing airline customers.

The Group’s Revenue for the year under review was Rs. 78,515 million, compared to Rs. 63,358 million in the previous year. Total Passenger Revenue was increased by 25% or Rs. 12 billion. Investment in fleet expansion led to Overall Capacity being increased to 1,755 million Available Tonne Kilometres (ATK), from 1,541 million. Overall Seat Factor during the year was stable at 76.79%, down slightly from the 77.93% of the previous year.   

Significant events during the past year included the rapid expansion of the airline’s fleet; expansion of its global route network including new services to Shanghai, Guangzhou and Kochi; re-launching its domestic service; extension of its existing franchise for ground handling and catering at BIA for the next 10 years; carrying out large aircraft maintenance projects for the Indian carriers IndiGo and GoAir; and construction of a Full Flight Simulator Centre for pilot training.

Its subsidiary SriLankan Catering Ltd. also expanded its airline customer base and diversified by taking up the management of the 24-roomed Serenediva Transit Hotel at BIA and launching the Aero Clean Industrial Laundry.

The Board of Directors of SriLankan Airlines as at the date of the Annual Report were  Nishantha Wickremasinghe (Chairman), Nihal Jayamanne PC, Kapila Chandrasena (Director/ CEO), Shameendra Rajapaksa, Manilal Fernando and Dr. Chris Nonis.