Friday 22 February 2019

SriLankan Airlines December revenue hits record $100m

SRI LANKA, January 26, 2018

SriLankan Airlines, the national carrier of Sri Lanka and a member of the oneworld alliance, achieved the highest ever monthly revenue in its history in December 2017, recording a stand-alone revenue of $100.1 million.

The airline attributes the increase in revenue to its expanded network and continuous improvement in revenue management processes.A total of 566,627 passengers were carried during the month, a 27 per cent increase over December 2016 and recorded a Passenger Load Factor of 85.9 per cent - above that of most major airlines in the world. Cargo carriage too witnessed a significant growth, rising 23 per cent year-over-year to 12,016 metric tonnes.

The airline’s newly launched route to Melbourne, Australia, was a resounding success – achieving a passenger load factor of 92.4 per cent - and recording a significant overall profit during the month. This makes Melbourne the first long-haul route launch of the airline in recent years to reach profitability in such a short period.

The airline also recorded a successful month in terms of operational efficiency, recording an average aircraft utilization of 13.8 hours per day. The wide-bodied fleet of Airbus A330 aircraft achieved an average daily utilisation of 15.2 hours – with industry leading reliability. The airline’s strategy of re-fleeting with fuel-efficient “single aisle” aircraft paid off, with its five-strong fleet of Airbus A320neo family aircraft helping to combat rising fuel costs. Two days of un-forecast fog in the Gulf were the only blight on the month, leading to several delays due to aircraft diversions.

The company’s subsidiary and business units – including SriLankan Catering and Ground Handling – too recorded a stellar performance, comfortably exceeding their revenue and profitability in comparison to the prior year. The Ground Handling division did particularly well, both financially and operationally, despite have to cope with record numbers of passengers, congested facilities at BIA and unusually high disruptions due to inclement weather.

The company recorded a net positive result for the month even after interest costs, with an un-audited net profit of $3.0 million. However, the management stresses that this positive result is only a beginning, especially considering the fact that oil prices have increased by over 25 per cent compared to December 2016. The fuel cost which accounted for 25 per cent of the total operating expenditure a year ago, has risen to 31 per cent whilst the ticket price (yield) has barely increased due to fierce competition and persistent over capacity, ills which are affecting most airlines.

Accordingly, much hard work remains to be done in order to drive the airline into sustainable year-round profitability.The airline business is highly seasonal and even achieving a break-even performance during off-peak months require significant improvements, which can be only achieved through a major restructuring. In line with this goal, the airline is currently developing the next phase of its restructuring and operational overhaul strategy. - TradeArabia News Service

Tags: Airlines | Revenue | December | SRI | lankan |

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