SriLankan curbs losses and amalgamates Mihin while seeking ‘private partner’



article_image

By Hiran H.Senewiratne


SriLankan Airlines had lost Rs16.3 billion, including one-off items, but operating losses had been cut to Rs9.03 billion from Rs11.5 billion during the last financial year, chairman Ajith Dias said.


"In the five months from April to August, operating losses have been further cut to Rs2.32 billion from Rs3.71 billion, he said at a media conference held at the SriLankan Airlines office at World Trade Centre yesterday.


He said that interest costs alone were Rs2.53 billion and the government is planning to take off some of the debt and clean up the balance sheet to make the national carrier a profitable entity.


The total interest bearing liabilities as at 31st August to banks/financial institutions are US $ 478.5 million.The interest cost for the current financial year is estimated at Rs 6.2 billion, Dias said.


Further, a private partner is expected to be chosen soon.


At the end of the last financial year, without the one off payment relating to cancellation of the lease of one A 350 aircraft, the airline's group loss stood at Rs 9.03 billion, which represents a 45 percent improvement for 2015/16 financial year compared to the previous year, he said.


Dias said that Mihin Lanka will be amalgamated to Sri Lankan Airlines and all routes that were operated by Mihin, including Bahrain and Muscat, will be operated by SriLankan Airlines. At present they have four flights and three will be kept by SriLankan Airlines and one will be handed over to the lessor by terminating its contract, he said.


SriLankan will be the only carrier to Gan Island in Maldives, focusing on regional routes where yields are higher, Chief Executive Officer Suren Ratwatte said.


"Out of 300 employees in Mihin Lanka, half of them will be absorbed into SriLankan Airlines staff and the fate of the rest will be decided by December, because Mihin will last till December, he said.


The BIA is scheduled to be closed for eight hours in 2017 for three months, to carry out maintenance work on the runway.


The airport operations will be halted for eight hours per day for a period of three months from January 05 from 8.30 a.m. to 4.30 p.m.


Ratwatte also said that 5 brand new Airbus A320neo aircraft will be added on lease to the fleet in 2017.


He said that flights to London will be increased to nine per week starting from November, 2016. Two main European destinations, namely, Paris and Frankfurt, will be stopped in order to tap revenue generating destinations as part of the airline restructuring mechanism.


More than 200 flights will be canceled and a revenue loss of U$ 47 million is to be incurred due to maintenance of the runway at the Bandaranaike International Airport, Ratwatte added.


SriLankan chairman Ajith Dias (L) and CEO Suren Ratwatte. - Pic by Nimal Dayaratne


 
 
 
 
 
 
 
 
 
 
animated gif
Processing Request
Please Wait...