Business

Sri Lankan revenue down 70% in 2020/21

  • Chairman Pathirage optimistic about ongoing financial year
  • Says SriLankan has an aggressive business plan
  • Resumes flights to Moscow this month

 

Issuing a statement yesterday (25) SriLankan Airlines Chairman Ashok Pathirage stated that SriLankan Airlines experienced a revenue reduction of 70% during the financial year 2020/21 when compared to the year before. Globally the airline industry has experienced a decrease in capacity of approximately 60% to 80% due to the Covid-19 pandemic with containment measures in place.

He added that the airline has a ‘clear vision’ with an ‘aggressive’ business plan to take the national carrier towards a successful and profitable entity. 

“However, due to the unexpected and unfortunate relapse of the pandemic outbreak, we had to postpone some of our plans until such time the current state of affairs returns to normalcy. We have taken every endeavour to explore all business opportunities to keep the Airline afloat even though the atmosphere in the world is unfavourable. We have introduced several measures to ensure every function of the business remains fully operational to grab every business opportunity. As new variants emerge, we are carefully monitoring the situation and we will constantly reassess our strategic plans and adjust accordingly.” 

The global aviation industry continues to face severe economic pressures as the pandemic looms into the future. Financial woes aside, the pandemic’s longer-term effects on aviation are emerging in the form of hygiene and safety standards being more stringent, and digitalisation continues to transform the travel experience. 

The statement noted that the beginning of the year 2021 has been a most welcome renewal of hope for all of us, especially for SriLankan Airlines as they have been waiting patiently for international travel to resume. 

Despite ongoing border restrictions and airport closures, SriLankan has continued to fulfil their obligations as the national carrier by sustaining global trade and repatriating stranded Sri Lankans; 74,032 passengers were repatriated from 229 flights between April 2020 to March 2021. However, from April to June 2021 35,612 passengers were repatriated using our scheduled flights. It also adapted to meet the increased demand for transportation of air cargo, resulting from the suspension of flights to Sri Lanka by other carriers. 

“We will be resuming flights to the Russian capital, Moscow this July, with a weekly scheduled flight between Colombo’s Bandaranaike International Airport (BIA) and Moscow’s Domodedovo Airport (DME). Using an Airbus A330 configured for 269 economy and 28 business class seats we will not only facilitate travel but will be the impetus for building closer bilateral business connections between the two countries,” Pathirage added. 

Despite the massive impact on global tourism, the airline opted to strategically steer into cargo operations. Reportedly, SriLankan’s existing fleet was sufficient to cater to cargo operation and the limited passenger operations. The wide-body fleet was used prominently for cargo operations while the majority of the narrow-body fleet was kept grounded due to lack of utilisation for passenger services. The expansion of our cargo operations strategically reduced the adverse effects of passenger travel. 

The present schedule consists of a network optimising passenger and cargo contributions to over 29 destinations. New destinations in the present schedule include Sydney, Incheon, and Nairobi with Frankfurt and Moscow to commence by the end of July. Over 60% of the uplifted capacity was allocated to local exports to ensure a continuous foreign currency inflow to Sri Lanka in the hope of strengthening the domestic export segment. SriLankan Airlines operated 3,039 scheduled flights and 165 cargo charters/ non-scheduled operations for uplifting Personal Protection Equipment (PPE) and essential goods connecting the Far East, Africa, the Indian Subcontinent, Europe, and the Middle East since the onset of the Covid-19 pandemic from April 2020 to June 2021, in addition to cargo flights carrying a tonnage of 77 million kilogrammes supporting the national economy. 

“We managed to bring down the cash burn-out substantially by approximately 44% through re-negotiating aircraft lease contracts to achieve both lease rent reductions and deferrals, employee-related cost savings, implementing a Voluntary Retirement Scheme (VRS), restructuring the organisation to make it leaner, cross-utilised the existing cadre and job amalgamations, ceasing external recruitments other than for operationally critical vacancies, reviewing unproductive policies and practices. However, the cash burn is forecasted to continue until at least the end of this year, as we expect continued severe revenue losses from the aviation industry.” 

SriLankan Airlines has successfully rolled out vaccines administered by the airlines’ medical centre to 95 % of their flying crew who are fully vaccinated and more than 80% of their operational and other staff are vaccinated as well. Through the assistance of government authorities, the company is continuing its staff vaccination programme to reach 100%. 

“We expect that many countries will open their borders for air travel by the end of the year, enabling us to recommence our commercial passenger operations and begin our journey towards recovery. We will constantly reassess our plans based on the evolving nature of the crisis with appropriate adjustments. The future of SriLankan Airlines lies in rebounding passenger travel both in numeric and caliber. All our periodic targets are contingent on international air travel being restored.”