SriLankan Airlines cut losses with cheaper fuel; no talks for airline partner
ECONOMYNEXT – SriLankan Airlines has reduced losses with oil prices coming down, and it is trying to consolidate its position without expanding into new routes, Chairman Ajith Dias said.
A re-structuring plan has already been approved by the cabinet of ministers, which may be made public soon he said.
SriLankan’s re-fleeting plan is going ahead with four aircraft to be delivered in the next 12-months, but they are not planning route expansions, he said.
The airline was not in talks for a foreign partner at the moment, he said, but they wanted more code-sharing arrangements.
The airline was benefitting from cheaper oil prices, he said.
Jet fuelled sold by Ceylon Petroleum Corporation in Colombo is about 15 percent higher than world prices Dias said.
In general the cheapest fuel is found in East Asia and the Middle East, where there are refineries in economic hubs of Singapore and Dubai, and prices in Europe and the even the America’s are slightly higher.
Sri Lankan Airlines started making massive losses after Emirates, its managing partners was ejected by ex-President Mahinda Rajapaksa.
Up to April 2015, SriLankan had lost 4.9 billion rupees, according to Treasury data, and accumulated losses were 130 billion rupees. In the last financial year it lost 32 billion rupees.
Following airline de-regulation state airlines are making losses. State airlines are run with people’s money and the true shareholder are separated from the money by two layers.
In a private company the board is represented by shareholders, who will try to ensure that the management does not mis-use their money.
But a state company is controlled by politicians who are also risking the money taken from the people, separating those who fund the airline with an additional layer of control and direction. (Colombo/Sept10/2015)