By: Staff Writer
October 27, Colombo (LNW): SriLankan Airlines has once again come under public scrutiny as the national carrier reported a Group loss of Rs. 2.73 billion for the 2024/25 financial year, reversing the Rs. 7.9 billion profit recorded in the previous year. The loss, largely masked by a one-off exchange gain in 2023/24, underscores the airline’s deep-rooted financial and administrative troubles — issues that continue to challenge its long-term sustainability.
According to the airline, the apparent profit in the previous financial year was mainly due to a substantial foreign exchange gain of Rs. 26.7 billion, which fell sharply to Rs. 3.9 billion in 2024/25 as the Sri Lankan rupee stabilized. Excluding these accounting adjustments, the Group’s operational loss widened to Rs. 6.66 billion, revealing persistent inefficiencies in cost management, high debt servicing, and weak revenue growth amid mounting competition from regional carriers.
The airline’s debt burden remains staggering estimated at over USD 1 billion including unpaid loans to state banks and overdue fuel bills to the Ceylon Petroleum Corporation. Industry analysts point out that the absence of meaningful restructuring has left SriLankan Airlines vulnerable to liquidity crises, with limited flexibility to modernize its aging fleet or expand profitable routes.
Despite several calls from the International Monetary Fund (IMF) and the Treasury for a comprehensive restructuring, the government has opted to keep the airline under state control. Officials argue that strategic state oversight is necessary to maintain national connectivity and protect the thousands of employees whose livelihoods depend on the carrier. However, critics claim this decision delays long-overdue reforms, including the possibility of attracting private investment and overhauling management practices plagued by inefficiency and political interference.
IMF program conditions explicitly call for the rationalization of state-owned enterprises (SOEs), including loss-making entities like SriLankan Airlines. The airline, once a flagship carrier in the region, has instead become a symbol of fiscal mismanagement, relying on Treasury guarantees and foreign borrowings to stay afloat.
Sources within the aviation sector say the airline’s administrative structure remains bloated, with overlapping roles, outdated procurement systems, and weak financial oversight. Attempts to restructure operations through staff rationalization and route optimization have stalled due to political resistance and employee union pressure.
Analysts warn that without decisive restructuring including debt write-downs, cost discipline, and professional management SriLankan Airlines risks remaining a persistent fiscal burden on the taxpayer. As IMF-led reforms gain momentum, the government faces increasing pressure to decide whether to reform, partially privatize, or continue subsidizing a carrier that has been flying through financial turbulence for over a decade.
