Srilankan to post loss of up to US $ 16mn due to Easter attacks
„Airline reported loss of US $ 168mn in 2018/19 FY ended March 31, 2019 „Mismanagement has left Srilankan with US $ 800mn debt as of end-march „Easter attacks delayed carrier’s scheduled 3-year break-even plan- CEO
Sri Lanka’s state-run airline is set to report a loss of up to US $ 160 million this year, as tourism in the island nation suffers following the Easter bombings, the carrier’s chief executive said.
Cash-strapped Srilankan Airlines has cut ticket prices, reduced ground handling charges and offered discounts to prevent empty seats on its flights since Islamist militants on April
21 bombed churches and luxury hotels, killing more than 250 people, including 42 foreign nationals.
“The forecast (for financial year ending March 2020) soon after the Easter Sunday attack is about US $ 160 million… but I’ll be happy if I can cap it around US $ 100-US $ 120 million,” Srilankan Airlines Chief Executive Officer Vipula Gunatilleka told Reuters.
The airline reported a loss of US $ 168 million in the 2018/19 financial year that ended March 31, 2019, he added.
The attacks had also delayed the carrier’s scheduled break-even plan, Gunatilleka said.
“My plan initially was (to break-even) in three years. But with the Easter attack, we may need four years,” Gunatilleka said.
In March, the island nation’s Auditor General noted that the losses and conditions “indicate a material uncertainty that may cast significant doubt on the (Srilankan Airlines) Group’s ability to continue as a going concern”.
For 10 years, Srilankan Airlines was a profitable joint venture with Dubai-based Emirates Airline until the pair split in 2008. Mismanagement in the years since has left it with a debt of about US $ 800 million as of end-march.
The airline’s continued losses have been financed through bank borrowings, secured via Colombo’s sovereign guarantees.
Prime Minister Ranil Wickremesinghe’s government in 2017 failed to execute a plan to sell an up to 49 percent stake in the airlines to revive it, despite interest from private equity firm TPG and asset management company Blackrock Inc.
Gunatilleka said the federal government is still looking to sell that stake without specifying details.