Fuel Buddies

June 19, 2006 (LBO) – Clubbing with big brother Emirates Airlines to get bulk fuel discounts and hedging oil prices on future markets has helped SriLankan Airlines to shave 11 million dollars of its energy bill, its Chief Executive said.

Emirates, the largest Arab carrier that owns 43.6 percent of SriLankan, is also lending a hand to secure bigger price cuts on ground handling and catering in most foreign airports that both airlines fly.

“The benefit of ‘big brother’ has helped us to leverage some of our costs, as jet fuel prices shoot up and passengers coming into Sri Lanka decline due to the worsening security situation,” CEO Peter Hill told LBO in an interview.

The national flag carrier, he says, is learning to live with high fuel costs, tweaking routes and offering bargains to encourage people to fly SriLankan.

The average price of a barrel of oil this year is expected to be 70 dollars. Jet fuel makes up around 35 percent of SriLankan’s operating costs and the airline switched back to limiting its exposure 18 months ago, b