SriLanka Airlines expects 60-pct revenue drop, to trim fleet amid Coronavirus
ECONOMYNEXT – State-run SriLankan Airlines is expecting revenues to drop 60 percent to 400 million US dollars in the coming year forcing the airline to trim its fleet and costs to survive in the next 12 months, Chairman Ashok Pathirage said.
SriLankan had earned about a billion US dollar in the just concluded year, and had lost 150 million dollars, Pathirage he told an online forum organized by Sri Lanka’s National Chamber of Commerce.
Before the Coronavirus crisis, the airline was expecting to lose about 120 million US dollars.
“We are looking how we can be a leaner as an organization,” Pathirage said. “So obviously we have to take very hard decisions.
“When we are losing 150 million dollars at one billion you can imagine at 400 million dollars what is our position.”
He said IATA is forecasting 50 percent of the people to travel who traveled last year would get back into international travel in the next 12 months.
“We may also have to re-look at the fleet, we may not require 28 aircraft to carry of 50 percent of the load,” Pathirage said.
While some sections of the airline were overstaffed others were understaffed.
SriLankan had stopped scheduled flights but is running cargo and also operating rescue flights for SriLakans trapped in other countries.
At a parliamentary inquiry it was also revealed that unions were forcing the management to carry more cabin crew than was required for most aircraft types.
SriLankan Airlines had overpaid for fleet of new Airbus A330 aircraft which was partly responsible for the losses.
SriLankan had made losses for over a decade since it was re-nationalized and took back a 40 percent stake from then managing shareholder Emirates.
Most state managed airlines cannot make profits mostly due to agency principle problems as politicians are not really shareholder who put their own money are willing to lose tax-payer money for any extraneous reason, critics say. (Colombo/May13/2020)