SriLankan Airlines Chief says procurement delays impact fleet expansion plans

SriLankan Airlines Chairman Ashok Pathirage - Pic by RuwanWalpola

• Reveals only 2 of 4 wide-body aircraft approved by Cabinet available for lease
• Cites sovereign rating downgrade poses additional challenge in leasing aircraft

SriLankan Airlines Chairman Ashok Pathirage revealed yesterday that procurement delays have resulted in only two of the four wide-body aircraft approved by the Cabinet being available for lease for the national carrier. 

On Monday, the Cabinet of Ministers approved the leasing of four A330 wide-body aircraft from Ireland-based ORIX Aviation and Aergo Capital Ltd., on monitoring lease facilities along with an additional aircraft, based on recommendations from the Technical Evaluation Committee (TEC) and the Standing Procurement Committee.

Speaking to the media, Pathirage explained that the lengthy Government procurement procedures, coupled with the high global demand for aircraft post-COVID pandemic, have significantly delayed the acquisition of additional flights for the airline.

“By the time we finalise the procurement procedures, those aircraft are no longer available,” he added.

Recalling that the lease cost of an airplane of A330 four years ago was $ 1 million, but after taking a 25% haircut, they were able to lease one for $ 750,000, he argued that $ 360,000 for a six-year lease was a favourable price for an airplane. “Today, we could obtain two for that amount, but regrettably, we are unable to do so due to the drawn-out procurement procedure,” he said.

Pathirage also noted the reluctance of lessors to take on the risk associated with Sri Lanka’s sovereign rating, which further complicates the aircraft acquisition process. 

The Chairman highlighted that the fleet expansion efforts have been underway for the past year and a half, but the airline has been unable to acquire aircraft to a suitable level despite several attempts owing to the multiple challenges involved.

“Prior to the COVID-19 pandemic, SriLankan Airlines operated 27 aircraft, but the fleet has since been reduced to 17. The plan is to get 10 new flights, but given the situation at least six,” he said, insisting on the importance of adding wide-body aircraft to the fleet to better serve long-haul destinations like the UK, France, and Australia.

He stressed the necessity of acquiring A330 aircraft to address the challenges faced by the airline. “Despite these challenges, if we can bring down the average cost, there is a possibility for the airline to improve turnover given the high demand for its services,” he added.