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The price of a barrel of crude oil has surged 85% during the last 12 months, and is now averaging
US$ 143 from last year’s US$ 75. SriLankan Airlines is projecting a fuel bill of
US$ 500 million for the current year at present prices, which accounts for approximately 50% of its overall costs.
The
airline has put into action several measures to mitigate the impact of
the fuel price increases and is expected to do more in the coming
months.
The
airline has slashed budgets across the board, and is reducing expenses and minimising wastage. Its management is working on reducing
the impact of its top ten cost items, and most of the company’s Colombo offices are being moved to Katunayake, to save on high levels of rent.
The airline recently introduced a fuel surcharge, as many other international carriers have done, and will soon be temporarily reducing capacity
on some routes in its network of 41 destinations in 22 countries in Europe, the Middle East and Asia.
Every one of
SriLankan's destinations will continue to be served by a number of flights, and those where flights are being reduced flights will for the most part have just one
flight less per week.
At the same time, the airline is moving ahead with its plans for the future, which include acquiring four more Airbus A320 aircraft to replace four
ageing aircraft in the fleet by the end of 2008, which is likely to be followed by
the refurbishment of passenger cabins on its widebody fleet of A330’s and A340’s.
Many
believe, that the price of fuel will not come down in the short
term, and the entire global air transport industry is preparing for even tougher times ahead. Pricing in
the air travel industry reacts slowly and it is not possible to immediately pass on the increased costs to the travelling public, hence the necessity
for capacity reduction to bring about an immediate reduction in costs.
Recently
Austrian
Airlines, Cathay
Pacific, Northwest
Airlines, United
Airlines, SriLankan
Airlines, Air
New Zealand, Qantas,
Continental
Airlines, Virgin
Blue, American
Airlines and Air
Canada have announced significant reductions to their international
operations. British Airways is also expected to make an announcement
about a similar move in the coming weeks.
See
other recent news regarding:
Airlines,
Aviation,
Flights,
Hotels, Promotions,
New
Hotels, Sri
Lanka, Sri
Lankan Airlines, Reductions
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