SriLankan Airlines has stated that its debt rose to 64.92 billion rupees at the end of March 2016 compared to a debt of 56.92 billion rupees a year earlier. The airline said that without ‘one-off’ extraordinary payments related to restructuring activities, its group loss was 8.9 billion rupees last year, a 46% improvement aiding mainly by lower fuel costs.
Revenue declined by 4% to Rs115.9bn in 2015/16 from Rs120.4bn in 2014/15. The airline said that it was impacted by a drop in fares caused by a spike in capacity to the Colombo market by other airlines, as well as the depreciation in the exchange rate compared to the previous year.
An added hurdle was the non-receipt of a $125 million loan from the government, which required the airline to take on additional bank borrowing with an additional interest charge of 1.73 billion rupees.
The finance ministry plans to restructure the airline’s financials and pay down debt over the next six months. Shareholders are currently exploring the option of a Public Private Partnership (PPP) for the Company.