State-run Sri Lankan Airlines is expecting revenues to drop 60 percent to 400 million US dollars in the coming year forcing the airline to trim its fleet and costs to survive, Chairman Ashok Pathirage said.
SriLankan had earned about a billion US dollar in the just concluded year, and had lost 150 million dollars, Pathirage added.
Before the Coronavirus crisis, the airline was expecting to lose about 120 million US dollars.
Debt-ridden national carrier will receive a US$75 million loan from Bank of Ceylon (BOC) and People’s Bank (PB) based on a Treasury guarantee which will also provide another sovereign guarantee to an international bank worth $5 million for the airline to seek further funding.
This is part of government efforts to sustain the airline and ensure future operations, official sources said.
Even though the SLA’s operational performance was disturbed due to COVID-19, the national carrier continues its contribution in difficult times operating several mercy and charter flights without considering the financial impact, sources said.
Meanwhile a senior Treasury official said a directive is to be issued to restructure current loans of BOC and PB to long term loans and exemption of tax, interest and charges by direct government and government institutions,
BOC and PB granted loans amounting to $25 million each to fund the losses of the airline.
During April and May 2020, SLA recorded $27.1 million in revenue but incurred a loss of $48.7 million. SLA is expected to most likely end with a loss of $185.3 million for 2020/21 accounting period due to the adverse impact on the aviation industry, provisional estimates revealed.
(LIN)