Aviation Sector reports profit of Rs. 22 bn within first 08 months
PMD: In a significant development, Sri Lanka’s aviation sector has reported a substantial profit of Rs. 22 billion in the period spanning from January to August 2023, said Minister of Port, Shipping and Aviation Mr. Nimal Siripala de Silva, during a news briefing held at the President Media Centre (PMC) Oct (09) focusing on the theme ‘Collective Path to a Stable Country’.
The Minister highlighted that approximately Rs. 10 billion from this profit has already been contributed to Treasury, providing a much-needed boost to the country’s finances.
He further said that efforts are underway to restructure Sri Lankan Airlines, the national carrier, with a focus on improving its operations and financial performance. Importantly, the government is committed to ensuring the job security of the approximately 6000 employees of the airline during this restructuring process. To facilitate this, an international consultant has been appointed. This consultant is expected to bring expertise and best practices to guide the restructuring efforts.
The Minister highlighted the success of operations at Palali International Airport, emphasizing that the airport has completed 200 flights. This achievement underscores the airport’s increasing significance and efficiency in handling air travel.
The Minister acknowledged the challenges faced by the aviation sector in the past, including the impact of the COVID-19 pandemic, reduced tourist arrivals, and a dollar crisis that affected fuel supply for airplanes. He mentioned that, at one point, fuel for airplanes had to be procured by sending aircraft to Madras to obtain the necessary fuel.
To address these challenges, the Minister of Petroleum and Minister Nimal Siripala de Silva intervened and facilitated the import of aviation fuel by the private sector, ensuring a stable supply of fuel for airplanes. Additionally, modern technology was employed to develop Bandaranaike International Airport, earning it recognition as a prominent airport in Southeast Asia.
Efforts were made to increase the frequency of flights by different airlines operating in Sri Lanka. This likely contributes to improved connectivity and accessibility for travellers.
These developments in the Sri Lankan aviation sector signify a positive turn in its financial performance, reflecting resilience in overcoming challenges. The government’s interventions, such as facilitating fuel supply and enhancing airport infrastructure, have contributed to this success. Increased profitability in the aviation sector is expected to have a positive impact on the country’s overall economic stability.
Among the key points highlighted by Minister Nimal Siripala de Silva:
“In accordance with the report, Emirates Airlines currently operates 28 flights per week, China Eastern Air operates 05 flights weekly, Etihad offers 06 flights, Qatar Airways provides an impressive 35 weekly flights, Air Arabia manages 11 flights, Air India operates 17 flights, and Jazeera Air conducts 04 flights per week. Furthermore, several other airlines have expressed their commitment to commence operations in Sri Lanka.
Additionally, it is noteworthy that the operations at Palali International Airport continue to demonstrate remarkable success. Specifically, the flight operations between Madras and Palali, which are scheduled three times a week, have already completed a total of 200 flights, underscoring the airport’s increasing prominence and efficiency.”
The Minister pointed out that Bandaranaike International Airport, Katunayake once a scarcely frequented facility, has now evolved into a bustling aviation hub. Notably, in the month of August, it catered to the needs of over 650,000 passengers. This surge in passenger traffic has contributed significantly to its financial prosperity. In the first eight months of this year alone, the airport has managed to generate a substantial profit of Rs. 22 billion through its aviation services. A commendable portion of this profit, amounting to Rs. 10 billion, has been allocated to the national treasury.
In parallel, a strategic initiative is currently underway to attract potential investors to the Mattala Airport. Furthermore, measures have been put in place to actively mitigate the airport’s operational losses, thereby ensuring its long-term sustainability and financial health.”
“The Cabinet has recently granted approval for a comprehensive restructuring plan for SriLankan Airlines. Following the submission of this proposal to the Treasury, constructive discussions have taken place in collaboration with the World Bank. In an effort to ensure transparency in the restructuring process, it was recommended to enlist the assistance of an international consultant. Consequently, a qualified consultant has been appointed, and crucial steps are actively being taken to expedite the restructuring of SriLankan Airlines. If progress aligns with the planned timeline, the anticipated benefits should be realized by February of the forthcoming year.
It is essential to note that the airline presently does not own any aircraft; instead, all available aircraft are leased. Acquiring new aircraft is not an immediate process and generally involves a waiting period of approximately one year post-order. Due to the absence of A330 aircraft in the current fleet, the airline faces limitations in offering services to destinations such as England, France, and Australia. The existing fleet primarily comprises A320 aircraft, which are unsuitable for long-haul or remote operations. Thus, the restructuring of the airline is imperative to address these challenges effectively.
Recent operational setbacks have resulted in substantial losses amounting to approximately $6 billion. While unions have attributed these delays to technical faults in the aircraft, it’s important to emphasize that pilots must possess certification from a qualified aeronautical engineer before they can undertake flight operations. Moreover, a noteworthy contrast exists in the monthly flight hours flown by our pilots compared to those from other airlines. The majority of our pilots have averaged only 63 flight hours per month, whereas their counterparts in other airlines often accumulate a hundred flight hours. In light of this, a plea is made to our aviation professionals to demonstrate unwavering commitment to institutional success, fostering a culture of responsibility and accountability.
It’s worth mentioning that pilots in our employment receive a monthly salary of four million rupees (40 lakhs). While there have been demands for higher salaries, citing comparisons with the remuneration packages offered by global aviation giants, it is essential to recognize that substantial salary increments may not be feasible in the current circumstances.
Furthermore, Tata’s acquisition of Air India, which includes orders for 250 Boeing 777 aircraft, presents opportunities for collaboration. These collaborations, possibly with regional airlines, offer the potential to secure the future prospects and rights of the 6000th employee of the Sri Lankan company, thereby fortifying the industry’s position.”