Sri Lankan Airlines halves flights to India, trims costs

State-run national carrier, Sri Lankan Airlines, has slashed flights to India from 100 a week to 51, as part of a cost-cutting strategy and re-aligning of services to conserve cash and maximize yields, an official said.
In the first quarter of the financial year starting March 2008, the airline lost almost 50 million US dollars, on core airline operations, chief executive Manoj Gunewardena said.
"But progressively in the next two to three quarters we've managed to stem this loss significantly," he said in an interview Saturday.
With the financial year almost over, Gunewardena says the airline would end "on a minus", though cash flows have stabilized.
SriLankan's bottom line is usually propped up by profits from ground handling and a flight catering unit at Bandaranaike International Airport, its home base.
In 2008, the carrier lost 6.1 billion rupees on core airline operations but ended the year with a 4.8 billion rupee profit, with aircraft sales bringing capital gains to supplement 3.3 billion rupees earned from ground handling and 985 million rupees from catering.
In March 2008, Emirates Airlines, a shareholder, pulled out of a management deal with Sri Lankan.
Gunewardena took over after that, and started cutting costs as fuel prices rose, demand slumped and losses added up. The Indian cut backs were timed with a replacement of the airline's ageing fleet of Airbus A320 aircraft which were flying mostly to India.
23/03/09 Lanka Business Online

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Categories: Foreign Mar 2009