SriLankan Airlines significantly reduced its loss in the last financial year and will shortly launch wide-ranging expansion projects to transform the National Carrier and drive growth in Sri Lanka’s tourism industry.

The Airline will announce extensive plans to expand its fleet of aircraft and global route network, upgrade passenger comfort on-board, and further diversify into related areas of activity, at its 31st anniversary celebrations in Katunayake on 3rd September.

Nishantha Wickremasinghe, the Airline’s Chairman, told shareholders in SriLankan’s latest Annual Report: “SriLankan Airlines has withstood the most unrelenting period of adversity during its 30-year history, and now stands on the verge of success in no uncertain terms. Your company successfully weathered a period of great turbulence during the last financial year, and now has its sights set firmly on expansion in all sectors of its business, with the broad objective being a return to profitability within the shortest possible time.”

The SriLankan Airlines Group slashed its loss by almost Rs. 4 billion in the financial year 2009/10, recording a Net Loss of Rs. 6.03 billion in comparison to Rs. 9.99 billion in the previous year. The Group comprises SriLankan Airlines Ltd. and its subsidiary SriLankan Catering (Pvt) Ltd.

The positive result was mainly due to a significant reduction in operating expenditure from Rs. 84.40 billion down to Rs. 69.28 billion. Unit Cost improved sharply to Rs. 43.37 per tonne kilometer from Rs. 50.71 per tonne kilometer. Passenger Load Factor improved significantly to 77.93% from the previous year’s 72.85%, while Overall Load Factor also increased to 66.72% versus the previous 65.12%.

Manoj Gunawardena, CEO of SriLankan Airlines, said: “SriLankan Airlines once again emerged stronger than ever from a turbulent year, and is now perfectly placed to drive the impending boom in the country’s tourism industry, contribute to the entire national economy, and move closer towards achieving profitability.”

“The Company’s emphasis on the principles of its Business Turnaround Plan resulted in a continuous improvement of its financial performance as the year progressed. The loss incurred during the second half of the financial year was 44% lower than that of the first half. All major contributing cost factors were significantly reduced – Fuel by 35%, Aircraft Maintenance by 19%, Catering by 3%, Landing Costs by 13%, Airport Handling by 7%, and Overflying by 16%. All major Fixed Costs were also reduced, including Aircraft Related Costs by 4%,” said SriLankan’s CEO.

Revenue for the year was Rs. 63.36 billion, a reduction from the revenue of Rs. 74.26 billion for the previous year, mainly on account of reduced operations and the removal of the fuel surcharge on air tickets.

Mr. Wickremasinghe noted: “SriLankan Airlines continued to be in the forefront of major institutions in supporting the Government of Sri Lanka in its drive towards national development. The National Carrier in particular worked in partnership with the Sri Lanka Tourism Promotions Bureau and the nation’s hospitality industry in enhancing Sri Lanka’s image and positioning the island as a destination of choice for global travelers. According to statistics of the Sri Lanka Tourism Development Authority, SriLankan brought in approximately half of the tourists who visited the island during the financial year under review, three times as many as the second placed airline.”

SriLankan also won a number of international awards including Airline of the Year at Sri Lanka’s Presidential Awards for Travel & Tourism, Best Airline Operator (South Asia) at the Kuala Lumpur International Airport Awards, and Best Passenger Airline by Growth in South Asia at Singapore’s Changi Airport Awards.

The Airline continued to modernize and expand its fleet and took delivery of one Airbus A320 aircraft in July 2009. A wide-body A330-200 was acquired in the second quarter of 2010. Services were launched to Milan during the year under review, and to Shanghai during the current year.

SriLankan Engineering enhanced its position as a maintenance-repair-overhaul institution in the region with major contracts from GoAir and IndiGo, while SriLankan Cargo doubled its handling capacity at BIA. The Airline’s Ground Handling operation continued to support the expansion of BIA which is fast becoming a modern, sophisticated air terminus. SriLankan also signed an MOU with SIM Industries BV of the Netherlands to set up a Full Flight Simulator at BIA.

The subsidiary SriLankan Catering (Pvt) Ltd. signed agreements during the year under review to provide catering services to several more airlines which operate to BIA, and invested in several projects to diversify its services. It also added ISO 14001:2004 certification for Best Environmental Practices, and ISO 9001:2008 for Quality Management Systems, in addition to ISO 22000:2005 for Food Safety Management Systems, and HACCP-Codex Alimentarius for Food Safety and Hygiene.

The Board of Directors of SriLankan Airlines consists of Nishantha Wickremasinghe (Chairman), Nihal Jayamanne PC, Kapila Chandrasena, Shameendra Rajapaksa, Manilal Fernando and Dr. Chris Nonis.