Sri Lanka Airlines upgrades product to boost margins

Feb 17, 2010 (LBO) – SriLankan Airlines, Sri Lanka’s state-run national career, is upgrading its product to boost margins following a revival in tourism traffic and is expecting to turnaround later in 2010, an official said. In the financial year ending March 2009 Sri Lankan lost 9.99 billion rupees as global air travel slumped and a conflict with Tamil Tiger separatists intensified at home. The war ended in May 2009 and tourist arrivals have since picked up.

Chief executive Manoj Gunawardena says the losses in the six months to September 2009 were less than 50 million US dollars. From the third quarter the airline had started to cut losses.

“We broke even in December 2009,” Gunawardena said. “We are now seeing average cabin factors of 70 percent.”

The cabin or passenger factor is the share of seats sold from the total available. At times the passenger factor was as high as 80 percent, he said.

Sri Lanka has seen tourist arrivals increase by around 30 percent a month after the war ended with strong growth from Europe during the winter season.

Though traffic is good Gunawardena says some of the contracts struck with travel firms in Europe last year at discounted prices have reduced profits, but the