Sri Lanka: SriLankan Airlines posts operating loss

SriLankan Airlines has posted an operating loss of US$5.45 million for the year 2007/08 as a result of the severe impact of the steep rise in the price of aviation fuel. The airline spent an additional US$63.3 million for fuel in 2007/08, with the fuel bill increasing by 29.3 per cent to US$279.7 million from […]


SriLankan Airlines has posted an operating loss of US$5.45 million for the year 2007/08 as a result of the severe impact of the steep rise in the price of aviation fuel.

The airline spent an additional US$63.3 million for fuel in 2007/08, with the fuel bill increasing by 29.3 per cent to US$279.7 million from the previous year.

But the sale and leaseback of three Airbus A340 aircraft resulted in a net profit for the year of US$45.4 million.

One bright spot was the carrier’s cargo business, with revenues increasing to total US$99 million, compared to US$85.5 million a year earlier.

"The global aviation industry as a whole is in the throes of its largest ever crisis, brought about by the steep increase and uncertain direction of fuel prices, driven by a combination of price speculation in global markets, and increasing demand from the expanding economies of Asia," said Dr PB Jayasundera, the group’s chairman.

"In the short term, SriLankan Airlines faces a challenging future, as does the entire global air transport industry, buffeted by volatile fuel prices and economic slowdown."

The airline’s management changed hands last April, with the expiry of the 10-year agreement with Emirates. The government owns a 51.05 per cent shareholding in the airline, with Emirates owning 43.63 per cent and employees 5.32 per cent.