After many media houses published news of losses incurred by Cash-strapped Sri Lanka’s national airline "SriLankan" for last year , ending on 31 March 2022 , the carrier came out with a clarification , saying "news is misleading".
The airline through a press release said,
SriLankan Airlines would like to clarify that the figure quoted in certain misleading news headlines refers to the financial position of the company as at 31 March 2022.
Few new publishers also published that the carrier lost LKR163.58 billion (US $ 525 million) in the year to March 2022, it said in a statement - more than three times its deficit in the previous 12 months, but "Sri Lankan" said , truth is ,
The highlighted loss figure includes a foreign exchange loss of LKR142.6 billion resulting from the revaluation of net foreign currency liabilities due to the sudden depreciation of the Sri Lankan rupee exchange rate in March 2022.
Many media houses compared the company to a burden on SriLanka's economy , as they believed , With nearly 6,000 staff, SriLankan Airlines is the biggest and most expensive of the cash-haemorrhaging state companies that have drained the budget and compounded the worst financial crisis in Sri Lanka’s history.
But the Airline company said,
The group, in fact, made an operating profit according to the audited financial statement and before the occurrence of exchange losses, amounting to LKR1.7 billion in the year. This is a significant achievement considering the issues faced by airlines worldwide during that period owing to the Pandemic.
Sources said that the airline missed interest payments on a US $ 175 million bond in December, eight months after the government itself defaulted on its sovereign debt after running out of foreign exchange.
On a reply , SriLankan Airlines said that it has presented its unaudited dollar financial statements for the latest financial year that ended in March 2023 at the recent COPE meeting in the Parliament. During the recently completed fiscal year, the airline generated a passenger and cargo revenue of USD994 million and an operating profit of USD53 million.
The operating profit at group level was USD104 million. The group, however, incurred financing costs of USD101 million, resulting in a profit of USD3 million. These figures may vary slightly during the finalization of year-end accounts, but essentially the airline has broken even for the first time in over a decade.
Sri Lanka has been unable to buy goods it needs from abroad. And in May 2022 it failed to make an interest payment on its foreign debt for the first time in its history.
Despite the crisis, Chairman of SriLankan Airlines stated during the recent COPE meeting, the airline has received no funding in the last two years, and continues to operate using its own cashflows.
Lanka Daily Mirror reported that , the country’s flag carrier has not turned a profit since 2008, when its chief executive was sacked by then-president Mahinda Rajapaksa for refusing to bump fare-paying passengers to make room for members of the leader’s family returning from a jaunt in London.
However, the carrier is quite optimistic , and said,
The airline maintains operating margins in line with the best industry standards. We are optimistic that these will be stronger in the year ahead as the country moves forward from the challenges of 2022.
As discussed at the COPE meeting, the biggest challenge yet is the country’s situation and extremely high financing costs.
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