News
Colombo says it will take on SriLankan’s debt pile
April 29th 2016
The Sri Lankan government this week said it will absorb SriLankan Airlines’ debts of 461 billion rupees ($3.15 billion). Read More »
"A suitable shareholder should be joined to assign its operations to make it a profitable institute again. In this regard the proposal made by Hon. Prime Minister Ranil Wickremesinghe, to take over all liabilities of the SriLankan Airlines by the Government of Sri Lanka, was approved by the Cabinet of Ministers," a statement read.
In the meantime, Colombo said it would provide SriLankan and budget carrier, Mihin Lanka, with a $200 million bridging loan to sustain operations until October.
SriLankan has been haemorrhaging money after intense competition from the Gulf, paired with ineffective strategic planning and poor cost management that has crippled its Europe to Asia (via Colombo) network. It has curtailed its operations in Europe and dropped plans to enter the Kangaroo Route. It plans to focus primarily regional flights, with China and India named as its biggest potential growth markets.
The carrier has officially cancelled an order for four A350-900s from Airbus, which could incur a $50 million penalty, while the fate of three additional -900s, on order from ILFC and due to arrive in the third quarter, remains unclear.
