SriLankan Airlines negotiating with lessors, cutting costs | Daily News

SriLankan Airlines negotiating with lessors, cutting costs

SriLankan Airlines Chairman Ashok Pathirage said that national carrier was negotiating with its lessors and has been able to cut costs.

Pathirage noted the real question facing the airline industry was how and when the COVID virus was going to come under control. Pathirage noted that Sri Lanka had surpassed all peer countries and beat some developed countries in its management of the virus.

He said “Thanks to the president who is spearheading the campaign we are one of the best countries. We have no community spread and COVID patients are restricted to quarantine centers and hospitals. Our country is not the worry it is what is happening in the region and the world.”

He added on SriLankan Airlines “We are operating on cargo and we are bringing back Sri Lankans. We are 25 percent of last year’s turnover. If things get better we will open the airport (to foreign travel).

Pathirage was speaking to Bloomberg Markets on 18 September.

Pathirage said ““We have taken a lot of initiative to reduce our costs. We have negotiated with our lessors, reduced salaries of our employees, and we are planning to have a volunteer retirement scheme (VRS). We are successful in all those initiatives.”

“This is also a good opportunity for Sri Lankan Airlines to cut a lot of costs, particularly in leases. We have managed to reduce leasing cost by 18%, which is about $100 billion per annum.”

Sri Lanka will establish travel bubbles with Singapore and China.

Pathirage noted that 30% of the fleet could be reduced. He said “We are negotiating with Airbus to see what the best option for us is, but at the moment, we are not in a position to tell what it is going to be,”

Pathirage ruled out selling the company. He said “The Government’s vision is not to sell the company, and we are not engaged in any such activity. It is not the thinking of the shareholders.

He added “We are dealing with $1 billion of debt, which we owe to the State banks. We have raised money through International Bonds. We are confident they (government) will support us till we overcome this phase.”

On the likely modality of support he said “If the Government is willing to support us in converting part of the debt into equity, that would help us. We may be in a much better position to turn into profitability – not immediately, but in two-years, we can get there.”