SriLankan Airlines loses Rs9.5bn in four months
Jul 08, 2017 08:01 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Sri Lanka's state-run SriLankan Airlines has lost 9.52 billion rupees in the first four months of 2017, up 55 percent from 6.12 billion rupees a year earlier, on top of 28.14 billion rupees lost in 2016, official data showed.
SriLankan is losing despite low fuel prices, when many international airlines are making profits.
But a part of last year's losses were due to compensation payments to AerCap, a leasing firm to prematurely terminate operating leases on new A350 aircraft ordered during the last regime.
The airline started making losses after ex-President Mahinda Rajapaksa terminated a management deal with Emirates.
But the new administration has failed to find a private partner for SriLankan after more than two years in office.
According to Treasury data SriLankan had lost 50 billion rupees during the tenor of the new administration.
The current administration appointed a pilot to run the airline.
The accumulated loses of SriLankan was 170 billion rupees as at April 2017 and it had a 116 billion hole in the balance sheet.
The Treasury had provided guarantees of 29.9 billion rupees and 210 million dollars for the airline to borrow and fund losses.
SriLankan Airlines along with LakSathosa a state retailer, is widely considered to be texbook cases of how state enterprises burden the people with mis-management, bad appointments and corruption particularly in procurement.
The global airline industry has become highly competitive and innovative with private airlines coming up and state entities have been unable to keep up.
India has also announced that it will privatize its state carrier. (Colombo/July08/2017)