SriLankan Airlines bucks industry downturn

22 July, 2007:

A sharp downturn in Sri Lanka’s tourism industry and a steep rise in the price of aviation fuel have not deterred SriLankan Airlines and the SriLankan Airlines Group, as both the entities posted significant profits during the last fiscal.

A statement said that while the SriLankan Airlines Group achieved a net profit after tax of Rs 862.18 million for the financial year 2006-07, down 50 per cent from the previous year, the company, SriLankan Airlines Ltd, made a profit of Rs 568.04 million, an increase of Rs. 91.51 million over the previous year’s Rs. 476.53 million. It added that this was the fifth year in succession that the Group, which consists of SriLankan Airlines Limited and its fully owned subsidiary SriLankan Catering (Private) Limited, recorded a profit.

There has been a slowdown in tourist arrivals in Sri Lanka, due to various nations’ travel advisories against visiting Sri Lanka, because of the escalation of hostilities in the country’s internal conflict. Also, with the average price of jet fuel touching $82 per barrel in 2006, as against USD 71 in 2005, the travel industry in the island nation had seen a lull. The annual fuel bill of the company shot up to $224.9 million from $190.5 million in the previous year, an increase of $34.4 million. Despite all these deterrants, SriLankan Airlines has posted a profit in the year 2006-2007.

SriLankan Catering, meanwhile, commissioned its $ 25 million state-of-the-art Flight Kitchen, a considerable investment in the future of Sri Lanka, the statement said.

Passenger and cargo revenues recorded growth rates of 10.67 per cent and 15.24 per cent respectively against the previous year, and the airline’s overall yield increased by 6.72 per cent. Passenger Traffic increased by 5.7 per cent, it added.