Sri Lankan state airlines lose Rs30.1bn in 2013; Rs90bn over 5 years

Apr 10, 2014 (LBO) – State-run Sri Lankan Airlines and Mihin Lanka have lost 30.1 billion rupees (230 million US dollars) in 2013, with losses over the last five years totaling 89.9 billion rupees, official data shows.

SriLankan Airlines made a loss of 28.6 billion rupees and state-run budget airline Mihin Lanka made another loss of 1.5 billion rupees, up from a billion rupees a year earlier the annual report of the Central Bank showed.

In 2013 revenues had risen 2.9 percent to 109.5 billion rupees but operating expenses had gone up 5.1 percent to 138.1 billion rupees.

“The widened loss was mainly caused by high fuel costs, less than satisfactory yields
due to the recession in Europe, competition from other airlines, significant investments in acquiring additional capacity and enhancement of supporting services including the cabin upgrades,” the report said.

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 the two state airlines had made operational losses of 89.9 billion rupees, according to Central Bank data.

This year’s losses of the two state airlines are 1,475 rupees for every man, woman and child in Sri Lanka.

The data differs from the numbers reported in SriLankan’s annual report which relates to financial years ending in March, 2013 and includes non-cashflow items.

SriLankan Airlines is buying a fleet of Airbus A350 aircraft to cut down fuel costs.

The Central Bank said the new aircraft will cut fuel costs by 6 to 15 percent and fuel was about half the airlines costs.