SriLankan Airlines will continue to play its vital role in stabilising the national economy by attracting international tourists through its growing operational network, its top official says.
Richard Nuttall, Chief Executive Officer of SriLankan Airlines, said the government would find the right partner for the carrier through privatisation, but it will take some time as the global aviation sector has been recovering from the Covid-19 pandemic.
Back into black
“I am happy that SriLankan Airlines essentially broke even in the last financial year ending March 2023. This was achieved in what has been a difficult year for the Sri Lankan economy,” Nuttall told DubaiNews.tv on the sidelines of the Arabian Travel Market in Dubai.
The airline’s revenues reached $1 billion and posted an operating profit of $100 million for the financial year ending March 2023. It achieved breakeven for the first time in 15 years.
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“Our passenger US dollar revenues during the same period also surpassed that of the financial year just before the pandemic. These impressive financial accomplishments were made because of cost savings made during the pandemic and by improving unit revenue and adjusting the network to match profitable demand as traffic returned after the pandemic,” he said.
Nuttall said SriLankan Airlines was also the largest carrier of tourists into Sri Lanka last year, and the airline is playing a significant role in the country’s economic revival through tourism.
“The road ahead is still marked with challenges, but we are forecasting a good year ahead. We are currently looking forward to replacement aircraft deliveries to our fleet, with which SriLankan will be able to expand its operations gradually,” he said.
The airline is currently looking at leasing five A320s and a similar number of A330s. It plans to grow to 35 aircraft over three years, but the government has asked to put it on hold on the growth plan until it starts the privatisation exercise.
Progress on privatisation
Nuttall said the Government of Sri Lanka, the primary shareholder of SriLankan Airlines, intends to privatise the airline along with a number of state-owned companies.
He said the government has set up the ‘State-Owned Enterprise Restructuring Unit’ within the Ministry of Finance to manage this process.
“We are optimistic that with the right partner there is every opportunity to profitably double the size of the airline and become a major contributor to the Sri Lankan economy and a key hub in the Indian Ocean,” he said.
In November, the Sri Lankan government approved the airline’s privatisation to raise cash and shift the airline’s control into the private sector to make it competitive without involving the national exchequer.
Some recent media reports indicate that India’s Tata Group is interested in buying a stake in Sri Lankan, but it is not confirmed through official sources.
Sources also claimed that some Gulf airlines have also shown interest in the SriLankan, but there is no official confirmation.
Codesharing or JV
Nuttall said the SriLankan has been enjoying close relations with the region’s aviation industry and it will continue to strengthen its relationships with the Middle East and Gulf airlines to offer better connectivity and services to the island nation.
“We currently have codeshare partnerships with five Middle East airlines, and we are continuously in talks with these and other carriers to add more codeshares and provide better connectivity to Sri Lanka,” he said.
To a question, he said SriLankan Airlines currently operates close to 220 flights a week spanning the Indian Subcontinent, Europe, the Far East, the Middle East and Oceania.
“We launched flights to several new destinations in the past two years including Frankfurt, Paris, Kathmandu, Sydney and Seoul. Our weekly flight operations are expected to rise by 30 per cent in winter 2023 and the priority now is to bolster capacity to key markets in the Indian Subcontinent and the Far East,” he said.
“As tourist arrivals to Sri Lanka grow steadily, SriLankan Airlines will also continue to focus on feeder markets and help establish Sri Lanka as a traveller favourite,” Nuttall concluded.