Chairman of Sri Lankan Airlines, Ashok Pathirage in a recent interview with Bloomberg discussed the current state of affairs of the national flag carrier and the impacts of COVID-19 on the business.
He added that, with the island nation dependent to an extent on tourism as it contributes to around 4% of GDP that figure has now come down to nearly 0% impacting several travel and tourism-focused businesses in the local industry. The airline has experienced a 75% fall in revenues compared to last year as a result of the pandemic, but the Chairman was optimistic of the airline’s future post-pandemic status and sees it as a blessing in disguise to control costs and become a leaner organisation.
Chairman of Sri Lankan Airlines – Ashok Pathirage
Source: Sri Lankan Airlines
Previously the airline did mention that they were considering changing their Airbus 350 orderbook to Airbus 330s, but the Chairman stated they don’t need 30% of their current fleet due to the current operating environment as a result the airline is currently in talks with aircraft manufacturer Airbus on a solution.
He also added that they haven’t terminated people outright other than outsourced and contracted staff, permanent staff have been furloughed and kept on the payroll. Pre-COVID, Sri Lankan airlines had around 7,000 staff altogether now brought down to around 5,000 which is still deemed high given the current operations of the airline. He did add that measures are being taken to make the airline leaner and will soon put in place a Voluntary Retirement Scheme (VRS).
Sri Lankan Airlines Fleet Composition (As at 31 March 2020)
During the interview, it was also noted that the Government being the shareholder of Sri Lankan Airlines has no intentions to sell the airline and are not engaged in such activities. Currently, they have $1 billion of debt which is owed to State banks and are looking at converting some of the debt into equity to further cut down on interest costs.
The Chairman further added that Lease rentals have been reduced by about 18%, saving around $100 billion per annum with more measures to control costs to be enforced, he stated that he was hopeful to turn the fortunes around for the airline and bring it to a break-even level or even profit-making once air travel returns to normalcy.
When asked about Air Bubbles, the Chairman did state that the government was looking at setting up agreements with the UK, Singapore and China, but have yet to come into agreement on any potential Air Bubbles.
Connect with us on Facebook – here