Mar 12, 2010 (LBO) – Sri Lanka’s state-owned budget airline, Mihin Lanka, whose losses have been subsidized by government, said it has begun making monthly profits after breaking even last August. However, the controversial airline, which stopped operating in 2008 after losing over three billion rupees and leaving bad loans at two state banks and a fuel supplier, has yet to recoup past losses.
“We’re making a small profit but we still need to recoup previous losses,” said Kapila Chandrasena, chief executive of Mihin Lanka. “But we’re going in the right direction.”
The airline’s income had gone up while it has managed to cut costs, he told a news conference.
The airline aims to reduce costs further by hiring pilots from the air force, now that the ethnic war is over, and also aims to lure tourists who now visit Buddhist sites in India via Bangkok.
The carrier made losses in the first eight months since it was re-launched last year, broke even in August 2009 and has been making monthly profits since December.
Chandrasena said the airline was maximizing earnings on its sole aircraft, operating at about 80 percent capacity, and hopes to lease a second one soon.