SriLankan says reduced loss sharply in FY 2010

Colombo, Wednesday (Reuters) State-run carrier SriLankan Airlines on Wednesday said it has cut the firm's net loss after tax to 202 million rupees in the financial year 2010, compared to a colossal loss of 6.03 billion a year ago.

The island's national air carrier is one of the main state-owned companies adding pressure to the $50 billion economy's budget deficit. It has made huge losses after Dubai's Emirates airline's 10-year management contract ended in 2008. It incurred an operating loss of 12.2 billion Sri Lanka rupees ($110.6 million) in 2009 and 6.3 billion rupees in 2010, central bank data shows.

"The overall objectives in the year ahead will be to increase the quantum of revenue through high-yielding business activities and bring SriLankan Airlines' financial performance to a level of profitability," CEO Kapila Chandrasena said in a statement. In July, Sri Lanka's Cabinet approved the airline's request to borrow $500 million to pursue a post-war expansion and modernisation programme, and ensure commercial viability. It currently operates about 177 flights a week out of Colombo to destinations in Europe, the Middle East, and Asia with 17 aircraft.

President Mahinda Rajapaksa has embarked on an ambitious development drive to revitalise infrastructure neglected during a 25-year war, which ended in May 2009. ($1 = 110.320 Sri Lanka Rupees)