SriLankan Airlines receives Rs.20bn to settle old debts

As attempts to divest the state ownership and attract private investments have been unsuccessful, national carrier SriLankan Airlines is slated to receive Rs.20 billion to repay the old debts.

The government yesterday said it would sign an agreement with the banks and set aside Rs.10,000 million for loan capital repayment in 2025 as well as Rs.10,000 million for interest payments. 

“The airline would be fully responsible for ensuring operating profitability once these legacy debt service costs are settled by the government,” President Anura Kumara Dissanayake said while delivering Budget 2025.

A new medium-term strategic plan would be devised by the company towards this end, he added.

The national carrier’s financial performance took a beat in the first three months of the 2024/2025 financial year. Its revenue dipped 12.7 percent year-on-year to Rs.63.8 billion in 1Q25. Though it was able to post a profit before tax of Rs.0.6 billion, it was drastically lower than Rs.8 billion recorded in the corresponding period of the previous year. The airline reported a net loss of Rs.12.9 billion in 1Q25, compared to a Rs.25.8 billion net profit recorded in 1Q24.

The Treasury continued to provide equity injections and other supportive measures, including loan guarantees, to maintain the operations of SriLankan Airlines.