SriLankan says achieved record revenue for FY2017/18

• Says passenger revenue tops US $ 830mn
• Highest ever revenue in its 38-year history
• Group revenue exceeds US $ 1bn

National carrier SriLankan Airlines yesterday said it achieved a record unaudited annual passenger revenue of Rs.126.9 billion (US $ 830.7 million) for the FY2017/18 ended this March.

The airline said this was the highest ever revenue in its 38-year history.

The revenue comes on the back of the recent expansion of the airline to include services to several new destinations such as Gan Islands, Hyderabad and Melbourne and additional frequencies to popular cities in its network.

Meanwhile, the airline’s cargo division also achieved Rs.14.7 billion revenue for the year under review.

The airline said the group revenue for the year, which includes passenger operations, cargo operations and ground handling services, topped US $ 1 billion, becoming one of a handful of local companies to achieve the billion-dollar mark.

SriLankan said all three business divisions exceeded the revenue targets set at the beginning of the year.

“This is the first instance of the airline achieving its annual revenue target since Emirates Airline left as the managing partner 10 years ago,” SriLankan CEO Suren Ratwatte said.

“With a new chairman and board of directors in place, I am certain that the airline will reach greater heights in the near future as we concentrate on curtailing our costs.”

The year has been one of transformation for SriLankan, in which it inducted four brand-new fuel-efficient narrow-bodied aircraft to the fleet – in the process of becoming the first A321neo aircraft operator in Asia. 

It has also made significant improvements to the on-board service, including offering flat-bed Business Class seats on all wide-bodied aircraft and Wi-Fi services on nearly half of its fleet.

During a recent press conference held to introduce the new SriLankan board headed by senior banker Ranjit Fernando, it was revealed the budget loss for the year under review was between US $ 140-160 million.

The airline is also saddled with a debt pile to the tune of US $ 750 million and has a negative net worth of US $ 400 million. 

The new director board is currently considering a restructuring plan for the airline drawn by the UK-based consultants Nyras and the new Chairman Fernando is hopeful that they would be able to return the airline to black in three years.  He said the restructuring would take into account every facet of the company, including finance, human resources, aircraft and routes. He said the airline is overstaffed with over 7,000 employees.

The new board also expects to directly negotiate with Airbus to cancel a US $ 720 million contract for four A350s with little or no cost to the government. 

The lease of four similar aircraft was cancelled recently at a cost of US $ 115 million to the airline. Both these contracts were entered into in 2014 by the previous Rajapaksa administration.