‘SriLankan to break even in 2021, profit thereafter’ | Daily News


 

‘SriLankan to break even in 2021, profit thereafter’

SriLnkan Airlines Chairman Ashok Pathirage and CEO in Colombo. Picture by Shirajiv Siriname
SriLnkan Airlines Chairman Ashok Pathirage and CEO in Colombo. Picture by Shirajiv Siriname

SriLankan Airlines will fly towards a breakeven point in 2021 and then make profits, SriLankan Airlines Chairman Ashok Pathirage said in Colombo yesterday.

A ‘solid’ post covid plan is now in progress and with the scheduled airport opening in August or even before the national carrier will see its operations normalising by 40% in December and 70% by March 2021.”

SriLankan wants to be financially self-sufficient soon and not be a burden to the government and the nation.

He said that SriLankan went through a major restructuring drive in the post Covid era and a new plan was successfully implemented and the airline did make a USD 1 million profit in January. “However the Covid-19 pandemic and the Eater Sunday attacks upset this restructuring process which was moving as planned.” The airline made a UDS 130 million loss last year.

“This pre Covid successful business plan was formulated without obtaining the services of any consultants from aboard who were earlier paid around UDS 10 million to forward a proposal which was not practical as the local plan which we did and implemented.”

SriLankan also has to pay over USD 275 million to CPC and also to the two State banks. “We have to honour these payments as delay of these payments and interest would paint a negative picture of these three state institutions which we want to avoid.”

He said they will also end the leasing contracts of three aircraft to bring down the fleet to 25 soon and will also renegotiate on the other leases which were done under unfavourable terms. “These are some of the overheads we unfortunately inherited. Pathirage said that shedding of excess staff and reducing overheads was a priority in their restructuring agenda even prior to Covid epidemic since the airline is overstaffed with around, 7000 employees. We have temporarily laid-off contract works, pilots, outsourced and other non-essential staff of around 1,000. The top management also are taking a 25% pay cut.”

 “We still have to pay around USD 6 million for staff payments. We are also in the process of offering a Golden handshake’ for employees.” The Chairman said, due to the increasing Covid pandemic in India, they had to cancel around 140 flights per week, resulting in a revenue drop of around 40% and also they saw a decline of revenue from both catering and ground handling.

He said that SriLankan played a key role in flying down over 7,800 Sri Lankans standard aboard from around 30,000.

Under the pre Covid business plan we were looking at operating flights from both Mattala and especially to India from Palali. Resumption of flights to Frankfurt and also adding Sydney was also on the cards. But there are all now on hold.


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