SriLankan hopeful of completing re-fleeting process in 2-3 months

18 May 2023 09:27 am - 14 - {{hitsCtrl.values.hits}}

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To acquire at least seven aircraft on lease in first phase
Currently has a fleet of 22 aircraft but only 18 in service
Fleet limitations identified as biggest obstacle for airline’s growth
Lazard appointed to restructure airline’s balance sheet

By Indika Sakalasooriya

Ashok PathiragePIC BY PRADEEP PATHIRANA

National carrier SriLankan Airlines is expecting to wrap up its re-fleeting exercise, which got the Cabinet approval last year, in the next two to three months, acquiring at least seven aircraft in the first phase, a top official said.
“We have almost finalised most of it. So, I think within the next two to three months we are expecting to complete it. Of course, not the whole thing. Whatever that we have finalised and available for delivery, we will get it.
At this moment, we have at least confirmed on five narrow bodies and two A330s,” SriLankan Airlines Chairman Ashok Pathirage said.
The airline currently has a fleet of 22 aircraft, out of which four are grounded due to delays in procuring required spare parts, largely due to increased global demand for aircraft and engines after the pandemic.
SriLankan doesn’t own a single aircraft and all the aircraft it operates are on lease.
All new aircraft leases will be funded through the airline’s current cashflow and it had not gone to the Treasury for funds for its operations in the last two years.
Pathirage said the biggest challenge SriLankan is facing at the moment is its inadequate fleet, which impedes operating flights on new routes and increasing frequencies to destinations the airline is already flying, where there is demand for additional flights.
“For example, there is huge demand for additional flights to India. But because of the current fleet limitations, we cannot do that,” Pathirage said.
Based on the unaudited financial statements for the year ended on March 31, 2023 (FY23), SriLankan said it was able to break even for first time in over a decade.
The SriLankan Airline group, including ground handling and catering businesses, which hold monopoly rights, made a US $ 3 million profit in FY23, after making an operating profit of US $ 104 million and incurring a finance cost of US $ 101 million.
SriLankan is saddled with debt, estimated at US $ 1 billion accumulated over the years, which the government is trying to settle by privatising the airline.

Being a state-owned entity, SriLankan also defaulted on its foreign financial obligations following the debt standstill announced by the government last April.
Pathirage said the financial advisory group Lazard, which has been hired by the government to advise on debt restructuring, has recently been appointed to restructure the airline’s balance sheet.
“At the moment we have appointed Lazard to look at our balance sheet. They are going to restructure the balance sheet. So, they probably will recommend whether the entire debt to be taken under the Treasury, similar in the case of CPC or part of the debt,” he said.
“If the Treasury is happy to take over the debt, the airline will make US $ 100 million right now because we paid a US $ 100 million finance cost for FY2023,” he added.

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Comments - 14

RR Thursday, 18 May 2023 11:21 AM

THERE IS NO GUARANTEE SRI LANKAN WILL RUN PROFITABLY, SO WHY ACQUIRE MORE PLANES?

Sam Thursday, 18 May 2023 12:55 PM

Do you have an idea to take over Sri Lankan?

Gamini Thursday, 18 May 2023 12:56 PM

shut this debt ridden airline. How can an airline that makes $500M annual loss order new aircrafts and from where are you going to pay for this

Gamini Thursday, 18 May 2023 12:57 PM

RR- there is something called 10%

Amaran Thursday, 18 May 2023 01:00 PM

You say ".... acquiring at least seven aircraft in the first phase, a top official said." Is Airline going to "Acquire" or "Lease" ?? Even now, all aircrafts have been LEASED.

Joseph Thursday, 18 May 2023 01:51 PM

If Sri Lankan airline is going under the hammer, why spend on re-fleeting?

Rajitha Thursday, 18 May 2023 01:57 PM

Leave it to the new owner undertake the re-fleeting exercise whenever that be. As a matter of urgency get rid of this hitherto loss making enterprise.

gamini Thursday, 18 May 2023 02:25 PM

this loss making tax payers money sucking failed venture should be sold OR hand it back to Emirates and DO NOT INTERFERE

WIraj Thursday, 18 May 2023 05:49 PM

Ideally the accumulated loss should be recovered from Mahinda Rajapakse, whose senseless, shortsighted, stupid act of kicking out Emirates Airlines ruined the profitability of Sri Lankan Airlines. Much worser his notorious brother-in-law (or outlaw) who took over, completely ruined it with his nefarious activities.

RR Thursday, 18 May 2023 08:39 PM

FOR WHOSE BENEFIT?

Mandayan Thursday, 18 May 2023 10:57 PM

You all are waste an unproductive. Bring back Mahinda’s BIL and he will dirt all with in days by permanently landing the carrier.

A. R. M. Cassim Friday, 19 May 2023 01:39 PM

Mr. Ashok Pathirage mentioned Sri Lankan Catering made a profit of US 3 million out of Turn Over of US104 million. So expenditure US101 million. Bloody joke. Is he happy with it. If his Softlogic made it by now fired the employees

Dimitri ramaneshwara Friday, 19 May 2023 04:25 PM

I think its great that this team is running the airline ! It is operationally breakeven, as per the news , the leasing of aircraft is no burden to the country as the finance required is being met by the airline , the delay caused was because cope committee put a hold on the leasing of new aircraft last march , where one economist mr. Harsha de silva was also involved...just delayed the progress of the airline.... if they continue onthis path re do some of the local debts so that the airlone can take its time and pay them we shoukd be avle to see it through to better times even without any foreign involvement!

Tissa Fernando Friday, 19 May 2023 05:33 PM

Please disclose the wealth along with the source of you and your close relatives before and after this deal. I am sure there will be a significant increase in the net wealth of those involved and their close families after this deal.

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SriLankan hopeful of completing re-fleeting process in 2-3 months

Comments - 14

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