June 26, 2010 (LBO) – SriLankan Airlines has cut losses in the year to March 2010, and was looking to turnaround in the second half of this year, but may need financial re-structuring in the future, an official said. The airline is now saddled with Mihin Lanka, a loss making start-up budget carrier.
A report from Sri Lanka’s Treasury released earlier this month said Mihin Lanka will be integrated to SriLankan as its ‘budget carrier.’
Government officials say there have been options considered to split the airline into separate units. Its catering unit is already a separate entity and is highly profitable.
Sri Lankan itself may need equity infusions if it does not want to lease all its aircraft on a re-fleeting program it may need to carry out by 2015 if it wants to stay ahead of the competition.
SriLankan has a successful engineering unit which does third party maintenance to regional airlines. “Losses in the March quarter were minimal,” chief executive Manoj Gunewardena said.
SriLankan lost 10 billion rupees last year, but Gunewardena said losses were much reduced during the year to March 2010 but did not disclose a number.
Audited accounts for this year are still not out.