“Committees and committees”
Ajith Dias, former chairman of SriLankan Airlines has written with reference to the January 13 column of “Kussi Amma Sera” under the above headline.
Mr. Dias does not dispute the losses of Srilankan Airlines that were reported, according to the annual reports and comparisons of the losses in 2015/16 and 2016/17 with those of 2008/09.
“Unfortunately, you have not considered the significant one-off costs that SriLankan Airlines took in both 2015/16 and 2016/17, due to the termination of the unnecessary A350 aircraft that had been ordered previously, as well as the impact of the closure of airport runway for 3 months in early 2017,” he says.
He also said that the one-off cost of terminating the order for one aircraft in 2015/16 was Rs 2.56 billion; the one off cost of terminating the order for three more aircraft in 2016/17 was Rs. 14.36 billion; and the necessary airport runway closure required the cancellation of over 600 flights and the loss from these cancellations was estimated at Rs. 4.5 billion.
As such, the comparable losses for the years in question (i.e. excluding the one-off costs) were as follows; 2015/16 company loss was effectively Rs 9.52 billion; and 2016/17 company loss was effectively Rs 9.48 billion.
“Whilst acknowledging that the company continued to lose money, there was a significant reduction, from the loss of Rs. 9.9 billion in 2009 that you quoted in your column and the loss of Rs. 31 billion in 2014, which was the year immediately preceding the appointment of the new Board of Directors,” he says.
Business Editor: While the intention of the column was mainly to show that the appointment of yet another committee (on restructuring the loss-making airline) is unlikely to help, more details of losses and bad decisions are being daily revealed at the Special Presidential Commission of Inquiry probing the airline which shows the extent of the crisis facing the national carrier.
In a statement this week, the national carrier said the net loss for the 9-month-period ending December 2018 was US$135 million (Rs. 40 billion) against $66 million (Rs. 11 billion) in the same 2017 period, giving various reasons for the losses..