SriLankan cuts losses in first half
- Trims losses by 11.6% to US$ 76mn
- Revenue down 70% to US$ 43mn
- Operating expenditure down to US$ 55mn
- Plans to further expand operations to Australia
- To offer new services to Ho Chi Minh City
- Mulls returning to Frankfurt, Paris
SriLankan Airlines has managed to trim its losses by 11.6 percent year-on-year (YoY) to US$ 76 million during the first half of the year, driven by a considerable reduction in operating expenditures despite a 70 percent YoY decline in revenue following the Easter Sunday attacks.
During the first six months ended September 30, 2019, the national carrier’s losses before interest and withholding tax fell over 50 percent YoY to US$ 19 million compared to the same period last year, a press statement issued by the airline said.
However, SriLankan’s revenue saw a decline of 70 percent YoY to US$ 43 million during the period due to a drop in passenger and cargo revenue.
“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, the group revenue is projected to increase significantly with the enhancement in operations by SriLankan and customer airlines,” the statement said.
The decline in revenue was offset by the considerable reduction in operating expenditure amounting to US$ 55 million by cost saving initiatives undertaken to enhance productivity and reduce admin costs and wastage.“Savings in the area of engineering and maintenance for the aircraft fleet have been significant, and a cost reduction of US$ 8 million was realized in 2018/19, with a further US$ 23 million earmarked for 2019/2020.
“There has also been a noteworthy improvement in fuel performance of the airline’s NEO aircraft fleet.
“An important revenue stream was re-established with SriLankan Engineering, the airline’s aircraft maintenance arm, regaining its Type-145 global certification from the European Aviation Safety Agency (EASA) and thus resuming third party maintenance services for customer airlines. This is projected to generate revenue of US$ 1.1 million in 2019/20.
“US$ 2 million in savings were also achieved through initiatives introduced pertaining to distribution cost by the commercial team,” the statement noted.
During the six months under review, SriLankan also relocated its corporate offices in Colombo to existing space in Katunayake resulting in significant savings and enhancing operational efficiency.
The airline has also begun negotiations with State banks to reduce interest rates with the interference of the Finance Ministry.
Further, SriLankan is seeking an exemption on the imposition of withholding tax from its major shareholder, the Finance Ministry.
The airline is also eyeing to further expand its operations into the Australian market with commencement of operations to Sydney next year and further strengthen its position as the largest foreign carrier in India with the launch of services to Ahmedabad.
SriLankan further 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.
UL to codeshare with Air India to serve Toronto
SriLankan Airlines said yesterday it is starting codeshared non-stop services between Toronto and New Delhi with long standing partner Air India, providing seamless connections to Colombo from November 7, 2019 onwards.
“Air India is a valued longtime partner and we are pleased to be teaming up with them to provide this service. SriLankan has been expanding our network through a combination of increasing our own destinations and frequencies; and expanding into new markets through codeshares with partner airlines. This is intended to facilitate travel for visitors to Sri Lanka, Sri Lankan residents overseas and Sri Lankans wishing to travel overseas,” SriLankan CEO Vipula Gunatilleka said.
Travellers will now have the opportunity to book their entire journey in one go, which they were earlier unable to do.
The non-stop flight from Toronto’s Lester B. Pearson International Airport to New Delhi’s Indira Gandhi International Airport is supported by rapid connectivity to Colombo with connection times of just 4 hours for Colombo-Delhi-Toronto and 6 hours for Toronto-Delhi-Colombo.
Flights operate on Wednesdays, Fridays and Sundays both to and from Toronto.
The Delhi-Toronto flight AI187 will have the UL code UL3640; while the Toronto-Delhi flight AI188 will have the code UL3641.
SriLankan and Air India currently codeshare on each other’s flights to a large number of destinations in South Asia, the Far East and the Indian Ocean region.