Mihin Lanka shows profit despite odds

by Shirajiv SIRIMANE

Sri Lanka's budget airline Mihin Lanka achieved a revenue Increase of 300% from January to December 2009. The airline earned US. $ 1.8 million last month as against $ 0.48 million earned in January.

For December 2009, Mihin achieved an average cabin factor in excess of 80% which is a very good cabin factor for the peak season. This compared with Jan 2009 constituting over 100% increase of passenger travel in Mihin flights to all its current destinations," said the CEO of the airline, Kapila Chandrasena. "Mihin was able to match its business projections as per the business plan for the year 2009. We are happy to state that the business is firmly tracking on the right direction."

The airline also achieved an expenditure reduction of 12% from January to December last year bringing down the costs from 1.8 million in January to 1.6 million last month. This included a 15% reduction in Fixed Costs and 16% reduction in Direct Operating Cost (DOC).

The airline which flies to Kuwait and Dubai mainly to provide low fares to migrant workers, family and holiday travellers and to Gaya, Tiruchirapalli and Varanasi in India to attract the religious traffic has carried 16,000 passengers.

The DOC expenditure reduction is mainly due to changing from a ACMI (Aircraft, Crew, Maintenance and Insurance), popularly known as a "wet" aircraft operating lease to a Only Aircraft (known as a "dry") Operating Lease. Under the new scheme, Mihin has outsourced the Tech Crew (Captain, First Officer) Resourcing and Engineering and Maintenance Tasks to Sri Lankan Airlines under a Commercial Services Agreement.