Company incurred heavy losses since 2008 | Daily News
Presidential Commission probing SriLankan learns

Company incurred heavy losses since 2008

It was revealed before the Presidential Commission of Inquiry investigating SriLankan Airlines, SriLankan Catering, and Mihin Lanka, yesterday, that SriLankan Airlines (SLA) had incurred heavy losses since 2008, and its board of directors had not been represented by the Treasury since the same year.

SriLankan Airlines was managed by Emirates on an agreement and SLA Head of Financial Management Yasantha Dissanayake, testifying before the Commission, said that the management agreement between SriLankan and Emirates was not terminated; however, it came to an end on March 31, 2008, after a period of 10 years, in accordance with its conditions.

During the last two financial years of the Emirates management, which was from April 1, 2006 to March 31, 2007 and from April 1, 2007 to March 31, 2008, the airline had earned profits worth Rs.862 million and Rs.4.89 billion, respectively. But after the government reclaimed management as the main shareholder, it had faced losses continuously, it was revealed. Dr. P.B. Jayasundara was the last Chairman under the Emirates management, and he was succeeded by Nishantha Wickremesinghe in 2008.

The company had faced a loss of Rs.9.99 billion at group level and Rs.9.3 billion at company level from 2008 to 2009, Rs. 6 billion at group level and Rs. 2.69 billion at company level from 2009 to 2010, Rs.202 million at group level and Rs.381 million at company level from 2010 to 2011, Rs.17.17 billion at group level and Rs.19.67 billion at company level from 2011 to 2012.

They had also faced losses of Rs.22.5 billion at group level and Rs.21.7 billion at company level from 2012 to 2013, Rs.32.4 billion from 2013 to 2014, Rs.16.3 billion at group level and Rs.16.49 billion at company level from 2014 to 2015, Rs.12.1 billion at group level and Rs.12.6 billion at company level from 2015 to 2016, and Rs.28.3 at group level and Rs.28.9 billion at company level from 2016 to 2017. Nishantha Wickremesinghe held the chairmanship until February 2015.

According to the witness, half of the total loss incurred during 2016 and 2017, approximately Rs.14.3 billion, was due to the compensation paid for terminating and cancelling the lease agreement on three aircrafts in 2016. It was also revealed that SriLankan had incurred losses due to the closure of the Bandaranaike International Airport for three months due to construction work, which had resulted in the cancellation of 600 flights.


 

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