SriLankan Airlines reported a loss of $525 million in the year to March 2023, almost triple the loss reported in the previous financial year when demand for air travel plunged following the pandemic-related travel restrictions. The results reflect the current financial crisis of the airline amidst news of proposed privatization making rounds.
In December 2022, the airline failed to repay interests of five years on loans obtained from local financial institutions. The Sri Lankan National Audit Office (NAO) stated the airline received $200 million in 2016/2017 and loan facilities amounting to $80.5 million from two different state banks to address short-term financial needs.
As of March 31, 2021, the total amount due by the SriLankan amounted to $196 million. Plus, the airline secured another loan of $75 million during FY 2021-22.
However, in April 2022, the Sri Lankan government suspended all external debt repayments amid an acute currency shortage and collapsing economic stability. This decision affected SriLankan Airlines' debt repayments since the Sri Lankan government owns 99.56% of the national carrier. Towards the end of December 2022, the airline still owed interest repayments on an $175 million bond, for which SriLankan hoped for a 12-month deferral.
Ashok Pathirage, Chairman, SriLankan stated that: “The country's unprecedented financial crisis came at a particularly critical time for the carrier, which had just started its recovery from the pandemic. As of now, restructuring the carrier is now the only viable option to save the national airline.”
The Chairman did not make any mention of a potential sell-off in spite of news circulating over the potential interest of external investors to invest in the airline.