Sri Lankan Airlines in the black with aircraft sales

Aug 20, 2008 (LBO) – Sri Lanka’s national carrier SriLankan Airlines has posted a 4.8 billion rupee profit with capital gains from aircraft sales, in a year that it was hit by rising fuel costs and weak tourist arrivals to the island. The carrier had lost 6.1 billion rupees (57 million US dollars) on its core airline operations but ground handling (3.3 billion rupees), flight catering (985 million rupees) and duty free sales (499 million) had helped boost margins.

In 2007 SriLankan’s fuel bill had increased 27 percent to 30.1 billion rupees with the average price of jet fuel reaching 101.8 US dollars per barrel from 87.09 a barrel in the previous year, the airline said.

The airline had earned a 5.48 billion rupee profit on the sale and leaseback of three airbus A340 aircraft allowing it to end the year with a 4,899 million rupee profit, up from 862 million a year earlier.

Chief executive Manoj Gunawardena told shareholders it is not sustainable to suffer losses on core operations and a turnaround plan is being implemented to cut costs in core operations.

The carrier has been traditionally able to lose money because of its highly profitable ground handling business.

Gunawardena said SriLankan had negotiated to