SriLankan Airlines reports operating profit but loss in latest accounts

While SriLankan Airlines’ revenue for the year ending March 31, 2023 saw group revenue soar to Rs. 369,470 million against Rs. 134,301 million in the earlier year, the year ended with a reduced loss of Rs. 71,306 million compared to Rs.163,583 million in 2021/2222, according to the latest annual performance of the national carrier posted recently on its website. The loss included finance charges and exchange fluctuations.

The operating profit was Rs.43,371 million vs Rs.1,692 million in the previous year while operating expenditure was Rs.329,856 million vs Rs.133,222 million. Aircraft fuel costs were Rs. 155,559 million against Rs. 42,759 million (2021/2022), an increase of 263.80 per cent.

In his review, airline chairman Ashok Pathirage said that in the latter part of the year, the airline demonstrated a recovery compared to the previous year, benefiting from a better operating environment and with the operational improvements made in response to the challenges faced.

“One of the primary challenges was the persistent rise in global inflation, which had a cascading effect on economic activities. It led to a cost-of-living crisis and the tightening of financial conditions in various regions. This situation was further exacerbated by geopolitical tensions, particularly the conflict in Ukraine, and the lingering impact of the COVID-19 pandemic. These macroeconomic challenges directly influenced the aviation industry, creating a distinct set of problems,” he said.

In the Government’s effort to restructure and privatise SriLankan Airlines, the airline was working closely with the StateOwned Enterprise Restructuring Unit (SOERU) in transforming into a financially sustainable, competitive, customer centric organisation that facilitates the achievement of company’s goals, he said.

CEO Richard Nuttall, said to sustain revenue generation, SriLankan Airlines identified more profitable strategies for business growth within the current circumstances. This included resuming travel to key destinations and increasing frequencies to existing destinations in the Indian subcontinent and the Far East. The airline also focused on transit traffic to generate revenue during periods of travel restrictions to Sri Lanka.

“Looking ahead, the airline will leverage its strategic plan over the next five years, capitalising on its strategic geographical location in the Indian Ocean,” he said. The report said that the high employee turnover rate of 9 per cent during the year was notably influenced by the ongoing economic and political instability. Many employees chose to opt for skilled migration with a tendency to seek employment with the expanding West Asian carriers.