Chief executive Kapila Chandrasena said the airline would increase frequencies and capacity to profitable routes in the Middle East, Indian subcontinent and the far east while 'rationalising; capacity in Europe where operating costs are significantly higher.
"This is especially prudent in the context of the economic crisis that is sweeping Europe at present and is likely to lead to a slowdown in tourism from Europe," he told shareholders in the annual report.
The global airline industry is getting transformed from de-regulation in the US and Europe where state-run airlines - some of which were expropriated from citizens after World War II - operated with the help of restrictions, keeping prices high and blocking innovation.The emergence of citizen-owned budget airlines in particular had made travel cheaper to ordinary citizens starting from Europe but the trend is rapidly gathering pace in Asia.
In the year to March 2012 SriLankan lost 19 billion rupees and was bailed out with a 15.4 billion rupees capital injection from tax payers.
Chandrasena said the airline planned to push up yield by aggressively marketing its business class, expand code-share deals with other airlines and change its 'Air Taxi' seaplane operations to end losses.
The airline also planned to increase third party engineering services, expand ground handling and cargo.