Interview: SriLankan to fly more to India, Japan, China; eyes profitability next year


Sep 09, 2015 (LBO) – The national carrier SriLankan Airlines is planning to cut some unprofitable routes and expand to India, Japan and China, Ajith Dias, chairman of the airline told Lanka Business Online.

“We are now rationalizing our fleet and rationalizing where we are going. We are increasing our flights to China, because our focus is India, China and Japan. That’s where the visitors are,” he said.

Dias said the airline has not yet finalized routes it plans to cut and will continue to fly current routes till end March next year.

According to data of state statistics office, the passenger kilometers flown and total revenue of SriLankan Airlines increased by 7.7 percent and 9.8 percent respectively in the first quarter of 2015.

In 2014, total revenue increased to 115.5 billion rupees, up 5.4 percent, and operating expenditure rose to 144.4 billion rupees, up  4.6 percent, data from the Central Bank shows.

The airline recorded an operating loss of 29 billion rupees in 2014, compared with a 28.6 billion rupee loss recorded in 2013.

SriLankan last made profits in 2008, and has been racking up losses since a management deal with Dubai-based Emirates ended. Over the past five years both Sri Lankan and Mihin made operational losses of 89.9 billion rupees, according to Central Bank data.

“We are trying our best to get SriLankan as close to profitability. With little luck we will get to profitability next year. But you never know, we might even break even this year,” Dias said.

Commenting on the rupee depreciation, he said: “it will impact on whatever we import as fuel, but fuel prices are also coming down, so I do not think that there will be major impact from that.”

The new government earlier had a plan to merge the two state airlines to make it a profitable business. But Dias says the two airlines will run as separate businesses as they cater to different markets.

“We are running Mihin as a separate company and managing it. They are paying for that (management) as it is not free,” Dias said.

“We are not trying to merge the two companies because one is different to the other. Also some of the routes that Sri Lankan are flying have been given to Mihin Lanka.”