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Message: <blockquote data-quote="mohmdrilwan" data-source="post: 2487141" data-attributes="member: 68443">July 22, 2008 (LBO) - Sri Lankan Airlines plans to reduce flights to cut costs amid soaring fuel prices but said the new schedule would not affect key passenger segments like tourists and migrant workers. The state-owned airline said in a statement it will go ahead with re-fleeting plans by replacing four old aircraft with Airbus A320s by the end of 2008. <img src="http://www.aircraftspotting.net/aircraft/SriLankan_A330_4RALA_small.jpg" alt="" class="fr-fic fr-dii fr-draggable " style="" /> Sri Lankan is projecting a fuel bill of 500 million US dollars for the current year at present prices, which accounts for about half of its overall costs. "The airline is not passing the full impact of the increase in the fuel bill to its passengers," the statement said. "At the same time, the national carrier does not intend to become a burden on the Treasury and the country’s taxpayers, and has already put into action several measures to mitigate the impact of fuel price increases. It will continue to do more in the coming months." The airline recently introduced a fuel surcharge, as many other international carriers have done. It 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, the statement said. "This is nothing unusual – many airlines around the world have already announced similar reductions in flight schedules." Sri Lankan Airlines said the flight reductions will mostly be confined to having just one flight less per week and that every one of its destinations will continue to be served by a sufficient number of flights. "The airline has ensured that these reductions will not affect its passengers and has taken into consideration the needs of Sri Lanka’s tourism industry, the migrant workers in the Middle East, and the strategic requirements of the government and the country." Pricing in the air travel industry reacts slowly and it is not possible to immediately pass on the increased costs to the travelling public, the airline said. Reducing the flights was necessary to "bring about an immediate reduction in costs," the statement said. "The price of fuel is not expected to come down, and the entire global air transport industry is preparing for even tougher times ahead." Fuel prices have shot up by half since January 2008, the statement said, adding the government took over management of the airline from Emirates in April, when the decade-long management contract with the Gulf carrier ended. The airline is already implementing several measures recommended by a panel of experts from the International Air Transport Association (IATA) to reduce fuel consumption by three percent by the end of this financial year, and up to five percent soon after. "The airline has slashed budgets across the board, and is reducing expenses and minimising wastage," the statement said. "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 (the international airport north of Colombo) to save on high levels of rent." The statement said the airline will also acquire four more Airbus A320 aircraft to replace four ageing aircraft in the fleet by the end of 2008. This is likely to be followed by refurbishment of passenger cabins on its wide-body fleet of A330s and A340s. The statement said that IATA, which just a year ago predicted a record profit for the global airline industry in 2008 of 9.6 billion dollars, has been rapidly downgrading its forecast in recent months and now predicts net losses in 2008 of between 2.3 and 6.1 billion dollars.</blockquote>

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