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SriLankan Airlines has emerged positively from the worst year in airline history with a modest profit of Rs. 1.4 billion, for the financial year ending March 2002. The Group, which includes SriLankan Catering, made an accumulative profit of Rs. 2 billion.

The airline which sustained a double blow from the Colombo airport attack on July 24, 2001 followed by the events of September 11, has done extremely well to recover with a series of immediate measures to cut costs, prune cadre, improve yields and increase traffic.

Although the airline lost a quarter of its fleet and had to cut routes and frequencies as a direct result of the airport attack, it has managed to contain costs and make a modest profit comparing well with the previous financial year where the company made a loss.

The airline's total operating revenue dropped by Rs. 1 billion or 3.6 per cent to Rs. 29.35 billion from the previous financial year. Group revenue too dropped 4.1 per cent to Rs. 29.75 billion from that of last year. Passenger revenue, excluding charters totalling Rs. 23 billion however, showed only a marginal decrease of 0.22 per cent over the previous year.

SriLankan Airlines unit yield increased by 27.8 per cent. Break even load factor decreased from 85.2 per cent to 74.3 per cent. The airline was also able to reduce cost of sales by 13 per cent over the previous year. The airline suffered a decline in capacity of 21 per cent over the previous year. Total traffic carriage fell 23.7 per cent.

The number of passengers carried during the year was 1.62 million, down from 1.89 million the previous year. Cargo carriage also fell from 58,618 tonnes last year to 46,067 tonnes for 2001/2002. Passenger seat factor increased by 0.13 per cent to 68.51 per cent while overall load factor (i.e. passenger and cargo) averaged 61.96 per cent, 2.15 per cent below the previous year.

'If the tragic events of 2001 taught us anything, it taught us to "do more with less!" says the airline's Chief Executive Officer Peter Hill in his review in the annual report.

"The past 12 months were spent in survival mode. I believe the next 12 months will focus on recovery." "The challenge ahead will be to remain strong, maintain the momentum we have shown over the past year, push forward where we can and keep building all the time - building the company's net worth; our knowledge and technological resources; revenues; yields; and a great team into an even better one," he adds.

The airline continues to contribute towards the country's economy, generating Rs. 21.9 billion in foreign exchange earnings. According to the Central Bank annual report, the figure exceeds total receipts from tourism of Rs. 19 billion and total foreign direct investment of Rs. 7.9 billion. The airline accounts for four per cent of Sri Lanka's GDP.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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