Revenue loss of $60 m in 2019/20 at national carrier
View(s):SriLankan Airlines, snowed under a mountain of debt, is estimated to end the current financial year – April 1, 2019 to March 31, 2020 – with a loss of US$60 million largely due to the hit the national carrier took in the aftermath of the Easter Sunday bombings.
“Since the April Easter Sunday attacks, our loss in the past five months – April to August 2019 – was $37 million due to lower load factors while we will end the year with a revenue loss of $60 million compared to the earlier (2018-2019) financial year,” SriLankan Airlines CEO Vipula Gunatilleka told the Business Times this week.
The crisis will see passenger numbers this year dropping by 10 per cent to around 5.2 million (through SriLankan Airlines) from 5.9 million last year.
Next year the airline is targeting new destinations like Sydney, Katmandu (Nepal), Saigon (Vietnam), Calicut and Ahmedabad (India) for which the airline needs to lease more narrow bodied aircraft. “Currently we have more wide bodied than narrow bodied aircraft and to get these approved (via Cabinet etc) takes a long time- at least six months and lessors (of aircraft) won’t keep aircraft that long,” he said adding that if the airline came under private management this process would have been quicker.
An Airbus 330-200 aircraft which the airline was compelled to lease under a previous arrangement to terminate the leases on Airbus aircraft is currently under reconfiguration as this 300-seater aircraft has no business class seats.
Mr. Gunatilleka said that while China has not fully picked up in arrivals, after the Easter Sunday disaster, arrivals from India are returning to their usual numbers. He said it’s difficult to do promotions when travel advisories have not been fully lifted and the airline is working with the government to overcome these issues.
Meanwhile CNN’s top business journalist Richard Quest, during a recent visit to Sri Lanka to speak at the Cinnamon Future of Tourism summit, spent a whole day with the airline at its hub in Katunayake, interviewing the CEO and visiting the airline’s catering, aviation college and crew training unit.
A September 15 report in the Business Times said that the national carrier was currently looking at a profitable venture in four years following a restructuring plan.
It said that authorities were looking at strategic investors for public private partnership to be carried out by the Finance Ministry to seek an investor through a transparent bidding process to infuse fresh equity of US$250 – 300 million to modernise the business and manage to profitability.
In this respect, the airline would retain 51 per cent Sri Lankan ownership while the investor selected would be based on their financial strength, management capability, ability to grow tourism and ability to grow airline, catering and ground handling revenue.