SriLankan records Rs. 4.4b net profit for 2007/08

The Sri Lankan Airlines Group’s financial performance for 2007/08 was severely affected by the steep rise in the price of aviation fuel, resulting in an operational loss of Rs. 588 million.

The airline spent an additional Rs. 6.538 billion for fuel in 2007/08, with the fuel bill increasing by 27.64% to Rs. 30.196 billion from Rs. 23.658 billion in the previous year.

This was the result of the average price of jet fuel reaching USD 101.81 per barrel in 2007/08, as against USD 87.09 in 2006/07.

However, the sale and leaseback of three Airbus A340 aircraft resulted in a Group nett profit for the year of Rs. 4,899.66 million. In the previous year, the group recorded a nett profit of Rs. 862.18 million.

The Group consists of SriLankan Airlines and its fully-owned subsidiary SriLankan Catering.

Reflecting the one off gain from the sale and lease back of the three A340 aircraft, the airline itself recorded a nett profit of Rs. 4,428.23 million for the year under review, compared to Rs. 568.04 million in the previous year.

Revenue from passenger sales recorded a significant increase at Rs. 63,808.34 million, up from Rs. 53,862.32 million, an increase of 18.46%.

Group’s Chairman Dr. P.B. Jayasundera said: “The global aviation industry as a whole is in the throes of its largest ever crisis, brought about by the steep increase and uncertain direction of fuel prices, driven by a combination of price speculation in global markets, and increasing demand from the expanding economies of Asia.

In the short term, SriLankan Airlines faces a challenging future, as does the entire global air transport industry, buffeted by volatile fuel prices and economic slowdown.”

“The quantum of funds raised through the sale of the aircraft will be utilised towards re-fleeting of the A320 narrowbody fleet, and planned refurbishment of cabins on the widebody fleet,” Dr. Jayasundera said.