Sri Lanka’s official carrier, SriLankan Airlines, has posted huge losses of Rs 248 billion during the first four months of 2022, media reported on July 13. A US dollar is worth almost Sri Lankan Rs 360 so the loss stands $790.000. It was not immediately clear if this loss was before or after tax. SriLankan ends first four months at a loss.
The Daily Mirror reported on Wednesday that the fiscal data released on the state-owned enterprise’s performance shows that the airline generated revenues of Rs 71.8 billion ( $199.4 million) but total expenses rose to Rs 320.3 billion ($889.7 million, including a one-time exchange loss booked on account of the foreign currency loans which SriLankan has taken. The news of SriLankan posting a loss came hours after the country’s President fled Sri Lanka in a military jet to nearby Maldives days after his official residence was overrun by popular street protests as the people wanted him out of office.
The airline’s other debts include treasury-guaranteed bank loans from state banks, aircraft leases, and debt with trade creditors of which the Ceylon Petroleum Corporation is at the forefront.
The island nation is facing a massive foreign exchange crisis as its economy has tanked and the dollar has fallen to a new high against the Sri Lankan Rupee. The situation in Sri Lanka is so bad that Indian media reported that SriLankan aircraft are refueling in India before carrying on to their final destinations.
In May this year, the government announced that the loss-making airline will be sold. The contours of the sale have not been formally announced.
In 1998 Emirates Group took a 43 percent stake in Air Lanka (later renamed SriLankan), and signed a 10-year management contract. The agreement helped the airline expand its network and during this period SriLankan became one of the largest foreign operators to India, operating to and from India with over 100 weekly services. In January 2008, the Dubai media quoted Sir Tim Clark, President, Emirates and then Managing Director SriLankan, that Emirates had notified the Sri Lankan government that it would not be renewing the shareholders’ agreement which expired on March 31, 2008. This led Emirates to take such a decision that has never been made public.
SriLankan was launched in 1979 and its website shows that it has 24 Airbus aircraft, including five Airbus A330-200s, seven -300s, and seven A320s plus fine A321 aircraft in its fleet, and provides connections to 126 destinations in 61 countries. The airline is a member of the Oneworld alliance.
Sri Lanka heavily dependent on tourism