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SriLankan to begin restructuring when Director Board approves plans

2018-04-17 07:41:11
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The ailing national carrier, SriLankan will begin its restructuring programme soon after the board of directors approve the plan submitted by consultants Nairas - UK.

The airline's Chairman Ranjith Fernando said yesterday the programme included the securing of a partner or investor, streamlining and re-arranging of routes and cutting down on excess or unproductive staff.

He told Daily Mirror the restructuring programme was approved by the Cabinet and the SriLankan board of directors would approve it before the end of April.

“Our priority would be to re-negotiate the purchase and termination contracts with Airbus Industries and the airline leasing company AerCap based on the renegotiation strategy proposed by Nairas on the basis that the leasing of aircraft by the national carrier has become an unbearable burden to the airline and the country," Mr. Fernando said and added that in addition SriLankan would rearrange its routes and lay off excess staff with a reasonable compensation.

"The new board of directors has already discussed contentious issues that is bleeding the national carrier. Our main concern is to renegotiate the purchasing, leasing and termination agreements in a way that would not be a burden to the country and the airline. SriLankan incurs a loss of some US$100 million or Rs.15 billion) annually which is a huge burden," Mr. Fernando said. “Our other objective is to bring SriLankan to a break-even point which will be a major relief to the economy, to the airline and to the employees. I expect the board members and the management team would get the maximum possible cooperation and blessings of employees, the government and the people to make our endeavour a success."

Meanwhile, SriLankan airlines has achieved a record annual passenger revenue of Rs.126.9 billion or US$ 830.7 million for the financial year 2017/18 which is the highest ever in the airline’s 38-year history.

The revenue comes on the aftermath of the expansion of the airline to include services to several new destinations such as Gan Islands, Hyderabad and Melbourne and additional frequencies to popular cities in its network.

The airline’s cargo division has also recorded a spectacular performance, achieving a revenue of Rs.14.7 billion. Both passenger and cargo divisions exceeded their annual target, enabling the SriLankan airlines to be bolstered by an even stronger performance at its best performing business unit SriLankan Ground Services – to comfortably exceed the overall annual revenue target.

The overall Group turnover exceeded one billion US$ making SriLankan one of the handful of companies in Sri Lanka to reach this milestone. It also becomes the highest revenue generating company amongst all Sri Lankan businesses which publicly report their financials.

The re-structuring process including the termination of the lease agreement has been delayed because of differences between the lessee and leaser. SriLankan has recorded a loss of Rs.107 billion within eight years after terminating the management agreement with Emirates.

The new board of directors of SriLankan comprise Ranjith Fernando, a veteran banker and a public servant as Chairman with the other members being Mano Tittawella, Susantha Katugampala, Dr. Roshen Perera, and Air Marshal Kapila Jayampathy. (Sandun A Jayasekera)


  Comments - 16

  • A350 Tuesday, 17 April 2018 08:24

    While appreciating your ambitious plan to turnaround, please don't reduce the Aircraft. We will be proud to have at least one A350.

    Reply : 9       13

    Ramesh Tuesday, 17 April 2018 10:45

    Ya A 350 is also more fuel efficient like the Boeing 787

    Reply : 2       7

    BuffaloaCitizen Tuesday, 17 April 2018 08:56

    Restructure so that the new plan to rob public money is different. In the end, you Politicians can blame it again and again and again on a host of officials and have your pockets full.

    Reply : 13       13

    rajiv Tuesday, 17 April 2018 09:03

    What a ever said and done about UL, it has made revenue of $ 830 Million and that too after 38 Years meaning since 1980 the airline had not made such sales. Losses can be reduced but expecting Rs. 107billion losses that took place in 10 Years to be wiped off cannot be done in just 3 Yrs.

    Reply : 2       23

    sacre blieu Tuesday, 17 April 2018 09:10

    Weeding out the debris who looted and resorted to false claims should be important along with reducing the seemingly, excess baggage. No influence, whatever should be tolerated by the new board. Investors come to Sri Lanka because of the comparatively low costs of establishing and running a business profitably. The Sri Lankan airline has cost the public an unbelievable loss and continuously so.

    Reply : 0       15

    Lord Wolfstein Tuesday, 17 April 2018 09:24

    As long as no qualified foreigner heads the airline, there will always be political influence.

    Reply : 0       26

    rajitha7 Tuesday, 17 April 2018 09:32

    The govt enterprises continue to make a loss over many years because the Auditor General is inoperative. Surely, simple financial audits would raise flags early and corrective measures are taken then? The entire system seems dysfunctional.

    Reply : 0       13

    cheers Tuesday, 17 April 2018 09:41

    Thanks to the previous chairman under Mahinda merging with one world reaps rewards now not this govt

    Reply : 24       4

    Dhammika Tuesday, 17 April 2018 19:45

    CHEERS sounds to be DRUNK !.

    Reply : 0       6

    Empulz Tuesday, 17 April 2018 09:44

    Proud as a Sri-Lankan to see the national carrier doing good, wish all the very best with the restuctring process. We love to see Our Sri Lankan flying high.

    Reply : 6       18

    Nana Wednesday, 18 April 2018 11:24

    Dong Good ? For politicians and their friends. Rescue this Enterprise for Politicians to play with again and again and loose public money. As long as this remains under Govt Control, nothing will happen,

    Reply : 0       0

    Unchikun Tuesday, 17 April 2018 11:06

    Oh! That is news. I though it was the Sirasa Black Coats that was doing the consultancy. Ha Ha Ha

    Reply : 2       6

    john frazer Tuesday, 17 April 2018 11:22

    THE CARRIER IS HERMERAGING MONEY EVERY DAY ONE OF THE MAIN AREA IS TO GET RID OF THE DEAD WOODS IN THE MANAGERIAL AND OPERATIONAL LEVEL PLUS STOP ALL THE EXTRAS

    Reply : 0       7

    Sincere Tuesday, 17 April 2018 13:05

    In any case, for our betterment, we will keep away from it until the so called restructuring is finished!

    Reply : 2       1

    Rohan Tuesday, 17 April 2018 15:46

    Rs 107 Billion loss since our proud former president MARA sack Emirates from Sri Lankan air partnership due to his stupid ego. Now we all pay that money in our everyday taxes. Why on earth people in this country still vote for him?

    Reply : 3       6

    Udaya Tuesday, 17 April 2018 19:22

    Must takes the Hat off to Mr Wickramasinghe for linking Srilankan to One World .

    Reply : 4       1

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