Sri Lanka Airlines to lose Rs34bn in 2020, loses Rs9bn in two months
ECONOMYNEXT – State-run Sri Lankan Airlines (SLA) has lost 48.7 million US dollars (about 9 billion rupees) in April and May 2020 and is expected to lose 185 million US dollars (34.4 billion rupees) in the year to March 2021 as the state-run carrier is hit by a Coronavirus pandemic, the Finance Ministry said.
“The financial situation of SLA was unhealthy even before COVID-19,” the Finance Ministry said.
“Accordingly, SLA management was expected to reduce SLA operational costs including lease payment renegotiation,…collective agreement renegotiations to remove unfavourable conditions such as reduction of the number of crew members in a flight, right-sizing the workforce by introducing a voluntary retirement scheme (VRS)…”
Sri Lankan Airlines lost 44.02 billion rupees in 2019, according to Finance Ministry data.
Sri Lankan has lost money ever since the airline’s management was taken back from the Dubai-based Emirates which had plugged the carrier into its global network.
Sri Lankan Airlines has been operating despite the Coronavirus crisis, running vital cargo and passenger flights along with Qatar Airways.
The last administration failed to find an investor for the airline without a clear cut deal being offered, and the current administration has abandoned plans for a private investor.
“Having considered the strategic importance, the government has now deviated from divesting shares of SLA and decided on implementing internal development strategy in line with related industries including the tourism industry,” the Finance Ministry said.
The tourist industry has been calling on the airline to run unprofitable routes for them to get profits.
The Maldives, however, developed its high-end tourism business with no national airline. They have monetary stability, while Sri Lanka is hit with frequent currency collapses. (Colombo/July15/2020-sb)