A vision for SriLankan Airlines

SriLankan Airlines has spent far too long being treated as a national asset whose losses can be excused in the name of tourism, connectivity and national pride. That approach has failed taxpayers, drained public resources and allowed the airline to operate without the commercial discipline expected of a sustainable business. If the national carrier is to have a future, its first priority must be to become profitable. Everything else must follow from that objective.

Recent reports that SriLankan Airlines is exploring opportunities to expand its network to Perth, China and Africa have once again raised questions about the airline’s strategic direction. The newly appointed CEO of the airline has argued that the airline must take the lead in developing routes that support Sri Lanka’s tourism industry, including destinations other airlines might initially consider commercially unattractive.

The argument sounds attractive on the surface. More flights could bring more visitors, stimulate economic activity and strengthen Sri Lanka’s international connections. But it also reveals the fundamental confusion that has plagued the national carrier for years. Is SriLankan Airlines a commercial enterprise, or is it an instrument of government tourism policy?

The distinction matters because SriLankan Airlines is not an independent business operating with unlimited capital. Its losses ultimately burden the Treasury, diverting public money from healthcare, education, infrastructure and other essential services. Every rupee used to sustain an unprofitable route is a rupee that must be justified to taxpayers.

Tourism is undoubtedly vital to Sri Lanka’s economy. But developing tourism is not the airline’s primary responsibility. Its responsibility is to operate a viable airline, generate revenue, control costs and deliver a return on the capital invested in it. Tourism promotion can be a welcome secondary benefit, but it cannot serve as a permanent excuse for commercial failure.

If the government believes that a particular route is essential to national tourism policy despite being commercially unviable, it should make that decision transparently and establish whether the wider economic benefits justify the cost. The airline should not be expected to conceal the price of public policy within its operating losses.

The first task, therefore, is to establish a clear commercial strategy. SriLankan Airlines must determine what kind of carrier it can realistically become, given its finances, fleet, competitive position and access to markets. Can SriLankan be a smaller regional carrier connecting selected destinations? Can the airline profitably sustain a broader international network? Which routes generate adequate returns, and which merely consume scarce resources? These questions require evidence, not ambition.

Expansion into Perth, China or Africa should proceed only where rigorous commercial assessments demonstrate a credible path to profitability. Opening a route simply because it might attract tourists is not a strategy. It is a gamble with public money.

The airline must also examine its ancillary businesses. Ground handling, catering, cargo and aircraft engineering may offer opportunities to generate independent revenue and improve operational efficiency. These activities should have transparent accounts, measurable performance targets and clear management responsibilities. Where practical, their performance should be assessed separately so that profitable operations are not obscured by losses elsewhere. Any restructuring must, of course, account for shared costs and operational dependencies.

Once SriLankan Airlines has demonstrated sustained operational improvement, the government should seriously consider strategic partnerships with credible international aviation companies. Such partnerships could bring capital, technical expertise, management discipline and access to wider commercial networks. But partners will be difficult to attract on favourable terms if the airline remains burdened by political interference and an unclear business model.

Ultimately, SriLankan Airlines needs a strategic vision that survives changes of government. That vision must identify its core markets, define its competitive advantage, establish realistic financial targets and hold management accountable for results.

National pride cannot be measured by the number of destinations on a route map. Nor can the value of a national carrier be judged by the flag painted on its aircraft.

SriLankan Airlines deserves the opportunity to recover. But recovery requires an end to the comfortable assumption that taxpayers will always pay for its failures. The airline must learn to fly on its own wings and prove that it can do so profitably.