National carrier’s new lifeline
View(s):After many twists and turns, Sri Lanka’s national carrier appears ready for take-off, at least in three years’ time.
Faced with losses of US$100 million this year, $160 million in 2019 and a total debt of $700 million, the new board of directors is preparing – so they say – to cut at least 2000 jobs out of the 7000-strong workforce, among other matters. “No easy task,” noted an airline analyst.
The new board comprising retired banker Ranjit Fernando (chairman), Mano Tittawella, Dr. Roshan Perera, Air Force Commander – Air Marshal Kapila Jayampathi and Susantha Katugampala – an immigration lawyer based in Australia) has promised a turnaround in three years. The decision to co-opt a serving military commander was an unusual move, the analyst said.
Among the steps planned in the restructure is route rationalisation, re-negotiating debts and re-negotiating aircraft leases with Airbus. Other airline sources said that the previous attempt to privatise the airline (during 2015-2018 February) was mishandled for the simple reason that every time the board made a decision, it was shot down by the cabinet.
The process is going to be different this time with the already, prepared restructuring strategy by consultant Nyras being presented to the board, thereafter to the cabinet and only after it’s approved, it would be implemented. “However the proposal will go quickly to cabinet after it is approved by the board,” one source said, adding that the first steps are to cut costs and re-negotiate on leases, rationalise routes and find a way to cut staff. “Only after that will the airline seek a foreign partner,” he said.