SriLankan Airlines lost Rs8.9 billion in 2015/16
ECONOMYNEXT – Sri Lanka’s state-run SriLankan Airlines had lost Rs8.9 billion in the year to March 2016, down from Rs16.3 billion a year earlier, helped by lower fuel costs.
The loss was before one-off costs, the airline said in a statement, without specifying how much the loss was with such costs.
Revenue fell 4 percent to Rs115.9 billion from Rs120.4 billion.
It wasn’t specified in the statement whether the loss was due to lower ticket prices or a lower volume of passenger and tonne kilometres sold.
"The addition of capacity to the Colombo market by other airlines, accompanied by a dramatic drop in airfares in certain markets, largely contributed to declining revenues," the airline said.
"The performance was further impacted by the depreciation in the exchange rate compared to the previous year."
The airline said it had debt of Rs64.9 billion, up from Rs56.9 billion a year earler.
The people of the country were expected to give $150 million from their tax money to SriLankan Airlines and Mihin Air, a sister airline started by ex-President Mahinda Rajapaksa last year, but it was not given, the airline said.
SriLankan’s finance charges rose 16 percent to Rs5.6 billion, and new borrowings accounted for Rs17.3 billion of it.
The airline said it was making cost savings are negotiating cost reductions with vendors.
"Given market realities, revenue enhancements are going to be challenging," SriLankan Airlines said.
"Therefore, the airline will continue to work on costs, streamlining processes and improving productivity, without which it cannot achieve financial self-sufficiency."
The airline was trying to avoid buying eight A350-900 aircraft.
"These aircraft are both inappropriate and too expensive for the airline, given the current operating environment and excessive lease costs," the statement said.
"The airline is exploring all options in this regard and hopes to continue with the acquisition of more narrow body aircraft, while delaying or otherwise changing the future wide-body aircraft already committed."
"These negotiations are now at an advanced stage and the airline has been continuously interacting with the shareholder on this matter."
The ministry for state enterprises had said it would restructure the balance sheet of the airline within the next six months and look for a managing and equity partner.
SriLankan Airlines had lost Rs109.8 billion since ex-President Rajapaksa cancelled the visa of the chief executive appointed by then-managing partner Emirates and the Dubai-based carrier terminated the management deal and exited.