Business

Loss-making Airport and Aviation Services expects profit by March

 

  • Incurred Rs. 1.7 b in losses up to August 2021
  • Profits possible due to revised health measures
  • Expects 100% recovery in tourism arrivals by Q122

 

By Yakuta Dawood 

Regardless of state-run Airport and Aviation Services Sri Lanka (Pvt.) Ltd. (AASL) incurring a loss of Rs. 1,792 million up to August 2021, it is confident that by February/March 2022, its revenue would be revived to pre-pandemic levels, The Sunday Morning Business learns.

Speaking to us, AASL Chief Operations Director (All Airports) and Board Member Shehan Sumanasekara stated that the target of achieving the pre-pandemic revenue level is highly plausible due to the revised health measures they have taken, together with the Ministry of Health. 

Elaborating further, Sumanasekara highlighted that within a span of less than two months since the revised health measures were implemented at the airport premises, passenger movement saw a remarkable increase, to about 45% of pre-pandemic statistics, from the 15-20% of just two months ago.

“To overcome the losses, several measures were taken, and one of them was relaxing a few restrictions. With this, we managed to increase passenger movement to 45% of what we experienced before the pandemic. However, we expect to reach the full potential by February-March 2022, from which the revenue expected will be achieved,” Sumanasekara said. 

However, when inquired about the revenue target set until February/March, he did not divulge details.

The pre-pandemic profit of the AASL for 2019 was about Rs. 15.2 billion.

In addition, commenting on the other measures taken to generate the expected revenue, Sumanasekara stated that from the 36 registered airlines, the AASL had already commenced operation of around 24 to 26 airlines. For this, the AASL was working on increasing the frequency of airlines that operate per day. 

“Just because 24 airlines are coming in, it doesn’t mean that it’s operating at its full potential, since the frequency of each airline is different. For example, airlines that were operating four times a day are now only operating twice. This intensity should also grow in the upcoming months. Hence, the AASL is communicating very closely with airlines to make sure they increase their frequency per day,” he emphasised.

Meanwhile, speaking about the upcoming winter season, Sumanasekara stated that the AASL will earn a high percentage of profits, as demand had risen exponentially, and the flight frequencies were also expected to rise. 

Reflecting on the same subject, he also mentioned that by 31 December, the Mattala Rajapaksa International Airport (MRIA) will have the highest arrivals since its inauguration in 2013, with around 15,000-20,000 during this winter season. 

“Despite the Covid-19 pandemic, the MRIA will have the highest number of arrivals since 2013. Furthermore, four new airlines will commence operation, and around 30 airlines will be operating from the MRIA this winter season. Winter is just starting, and it will be the most profitable season in Sri Lanka,” Sumanasekara said.

By sticking to all the aforementioned measures, the AASL will be able to reach the revenue target that was achieved prior to the country being impacted by the Covid-19 pandemic, he added. 

“Profits will rise; we will soon start hitting the usual numbers, revenue-wise. This is because of the government taxes that will be collected from each passenger that arrives at the airport, parking fee, duty-free income, indirect income such as hotel and travel which will be quadruple, etc.,” Sumanasekara concluded. 

According to statistics released by the Finance Ministry, the AASL had lost Rs. 1,792 million as of August 2021, of which Rs. 688 million was lost in July. The reason for this, as stated by the authorities, was that the loss was incurred due to the increase in operational cost as a result of the Covid-19 pandemic.

The total tourist arrivals from 28 December 2020 to 31 October 2021 from both pilot and main tourism projects were 61,088, while passenger arrivals under Sri Lanka Tourism were 71,097 during the same period.

According to the latest reports, the highest number of tourist arrivals was reported in October, and the total arrivals during that month were 22,771. The top 10 markets identified from 1-31 October by the Tourism Ministry included India, the UK, Pakistan, the Russian Federation, Germany, the Maldives, Canada, France, the US, and Indonesia.