SriLankan to post approx. US$130 m loss FY 2014/15
National carrier SriLankan Airlines is expected to post reduced losses amounting to approximately US$100 million for 2014/15 in the wake of the Sirisena led administration calling for a tie-up with budget airline Mihin.
With government plans underway to tie-up these failed institutions the national carrier was still awaiting directives from authorities in this regard, the carrier’s CEO Kapila Chandrasena told the Business Times on Thursday.
A decision on the modality of carrying out the merger between SriLankan Airlines and Mihin Air would be detailed to the carriers following the next board meeting scheduled for this month, he said.
The two carriers currently cooperate in several areas like aircraft maintenance, flight operations, commercial, IT and ground handling, the carrier stated last week to the Business Times when queried adding that the merger would be carried out in the most “cost effective and efficient manner while further maximising on the synergies between the two airlines.”
SriLankan Airlines was given a capital infusion of US$375 million from the US$500 million in the form of Treasury bonds from the Treasury under the previous administration, for which there were losses there as well, Mr. Chandrasena explained.
He noted that since the investment given by the Treasury was not a cash infusion it also generated losses for the company when converting to cash.
The reduced losses by the airline for this year were previously forecasted at $225 million but going by the figures it was expected to hit approximately $130, he said. This is less than the 2013/14 FY March figure where a loss of $249 million was accrued Mr. Chandrasena pointed out that they were also expecting a further US$125 million infusion as part of the business plan for 2015/16 from the Treasury.