SriLankan Airlines cuts losses, to fly to Sydney, Saigon
ECONOMYNEXT – SriLankan Airlines said it managed to reduce losses in the half year to September 2019 under its business turnaround plan and aims to start flying to Sydney next year and to Ahmedabad, India and Vietnam.
A statement said the national carrier’s new board of director had restructured the management team with proven experts in the aviation industry being inducted into key positions.
These include those of Chief Executive Officer, Chief Technical Officer, Chief Financial Officer, Chief Commercial Officer, and Chief of Service Delivery.
“The airline will expand its presence in the important Australian market by commencing operations to Sydney next year and further strengthen its position as the largest foreign carrier in India with the launch of services to Ahmedabad,” it said.
“SriLankan also intends to stretch its wings in Southeast Asia with a new service to Ho Chi Minh City (Saigon) in Vietnam, while plans to return to Frankfurt, Paris and other earlier destinations continue to be under consideration.”
The airline said it had been badly affected by the downturn in tourist arrivals and withdrawal of flights by foreign carriers after April’s Easter Sunday suicide bombings of hotels and churches which reduced sales.
“With the full support of the staff, the Management Team rolled out multiple initiatives, introducing budgetary controls for all cost lines, inculcating a cost-conscious culture and driving financial acumen across the organization,” the statement said.
“This has resulted in the financial performance for the six months ended 30th September 2019 showing an upward trend by reducing losses by more than 50 percdent, with a loss of 19 million US dollars before interest and withholding tax against a loss of 39 million dollars for the same period the previous year.
After interest and withholding tax, the half yearly group loss fell by 10 million dollars to 76 million dollars.
“This was achieved despite an overall decline in group revenue of 43 million dollars, 70 percent of which was due to a drop in passenger and cargo revenue,” the airline said.
“The reduction in ground handling and catering revenue also impacted the shortfall, as other airlines reduced their operations following the Easter Sunday attacks.
“However, in the second half of the year, group revenue is projected to increase significantly with the enhancement in operations by SriLankan and customer airlines.”
SriLankan Airlines said the fall in income was offset by the considerable reduction in operating expenditure amounting to 55 million dollars due to cost saving initiatives to enhance productivity and reduce costs and wastage.
Talks with state banks to reduce interest rates are ongoing and consultations continue with the major shareholder – the Ministry of Finance – to seek exemption on the imposition of withholding tax, it said.
(COLOMBO, 07 November 2019)