UL seeks commercial borrowing to stay afloat

27 November 2011 08:30 pm - 6     - {{hitsCtrl.values.hits}}

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The cash strapped SriLankan Airlines is to go in for a commercial borrowing of US$175 million from external sources to meet its funding requirements, officials said yesterday.
 
The Civil Aviation Ministry sought an allocation of US$500 million from the budget over a period of three years for the airline which recorded a loss of Rs.2.6 billion last year. The Ministry also asked for US$20 million each over a period of three years to meet the financial requirements of Mihin Lanka which has incurred a loss of Rs.7 billion since its inception.

However, the government has announced an allocation of US$100 million each for a period of three years for SriLankan Airlines and US$10 million each for a period of two years for Mihin Lanka.

Sri Lankan Airlines Chief Executive Officer Kapila Chandrasena told the Daily Mirror there was a deficit of US$175 million in the financial requirement of the national carrier, and it would be met with a commercial borrowing from external sources.

Mr. Chandrasena, however, said nothing in this regard had been finalised yet.

 “We are discussing it. We wanted US$500 million in three years. Yet, we were promised it in the budget in five years. There is a gap in our financial requirement. To bridge that gap, a commercial borrowing will be considered,” he said.

Also, he said plans were underway to increase the airline’s fleet to 30.

“Now there are only 20 aircraft in our fleet.  New flight schedules have been planned to destinations in Europe,” he said.

 “We will start a flight to Zurich on December 23. We are also considering a few more destinations in Africa, China and Australia,” he said. 
 
Meanwhile, UNP Dayasiri Jayasekara who participated in the select committee appointed to discuss the budgetary allocations for 21 ministries, said the country’s debt burden would be worsened with this borrowing. (Kelum Bandara)

  Comments - 6

  • siribiris Monday, 28 November 2011 05:25 AM

    money eating organisations; when it was under emirate it run profitably. What went wrong?

    thushi Monday, 28 November 2011 05:39 AM

    the entourage didn't get seats, now the entire country has to suffer.

    riyas Monday, 28 November 2011 05:41 AM

    even Gov unable to manage this operation properly, what they will do with taking over all under performing businesses. Only one thing they can do is to sell all to foriengers.

    Tom Monday, 28 November 2011 06:24 AM

    Under performing!!!

    Peter Casie Chetty Monday, 28 November 2011 12:31 PM

    Sri Lankan Airalines is losing repatriates to other airlines because of the cost of their ticket to and from destinations all over Europe. It is a shortsighted policy because the cheaper the flights are of the other airline like Gulf and Emirates we will avoid Sri Lankan Airlines hig prices. Europe is poor now and so are expatriates living here.

    steve Monday, 28 November 2011 08:26 AM

    Gov under performing!
    Who should take over them now????


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