SriLankan Airlines to lose USD 130 million

SriLankan Airlines will lose USD 130 million for the year ending March 2020, chairman Ashok Pathirage disclosed to the Parliamentary Committee On Public Enterprises (COPE). He requested a USD 300 million capital injection from the government to prevent a debt spiral.

Pathirage blamed the situation on the loss of tourism after last year's Easter Sunday bombings and the ongoing Covid-19 coronavirus outbreak. Arrivals from China, for example, which accounted for 30% of inbound travel in 2018, plunged 92.5% in February year-on-year.

Although undercapitalised due to past losses, the airline had been expecting to reduce its loss to about USD30 million in 2021, the chairman told the committee, promising that “the board has a plan where we are very confident the airline will be profitable two to three years down the line", he stated.

It was only last month that the government approved a further handout to SriLankan Airlines, this time for USD 50 million, to enable it to continue its services.

Loss-making since Emirates (EK, Dubai Int'l) concluded a profitable ten-year management contract with the carrier in 2008, SriLankan's cumulative losses will total LKR 232 billion rupees (USD1.27 billion) by end March 2020, Pathirage said, including USD 115 million to release it from a controversial Airbus deal. The carrier committed in 2013 to buy six A330-300s and four A350-900s and take a further four A350-900s from lessors but later reneged on its decision to add any of the A350s.

Sri Lanka's previous administration, which was in power until November 2019, decided in August of that year to sell a 49% stake in the flag carrier and try to attract foreign investors by assuming some of the airline's legacy debt. Nothing further was done, however.

Pathirage also reiterated earlier plans to launch flights to Frankfurt Int'l and Sydney Kingsford Smith and lease more A330s. According to the ch-aviation fleets advanced module, the carrier currently operates an all-leased fleet of five A320-200s, two A320-200neo, two A321-200s, four A321-200neo, six A330-200s, and seven A330-300s.