SriLankan Airlines’ sudden publicity blitz amidst numerous complications

Early this month, the islanders were treated to a feel-good cheer when the national carrier SriLankan Airlines (SLA) newly added Airbus A330-200 aircraft performed a rare, low-altitude flyover from Colombo Port City to Panadura, providing the masses a clear view of the newest addition to the state-owned carrier’s fleet. The well-thought-out PR exercise captivated the interest of the general public, but it cannot cover up the severe operational and financial constraints the airline is embattled with. 

Despite the euphoria created by the extensive propaganda, the top leadership of the beleaguered carrier took a conscious effort to refrain from disclosing the fact that the latest addition to its fleet is a 13.7-year-old Airbus A330-200, which had been leased from Carlyle Aviation Partners, apart from declining to reveal the value of its monthly rental – $ 360,000.

Unfortunately, whatever the positive image the Government-owned airline firm was able to generate from its grandiose media hype disappeared in no time when its UL (which some mockingly refer to as Usually Late) 306 flight bound for Singapore was forced to make an emergency landing in Indonesia due to a technical fault just days after the showy display of its latest aeroplane. Passengers who were frustrated by the mid-air diversion had complained about lack of communication, poor facilities, and prolonged delays at the airport in Indonesia. 

The incident reached the headlines as well as prime time news. Last year, the controversial State carrier found itself in a scary affair after a captain had locked out his female co-pilot during her toilet break disregarding the safety of passengers while on the journey from Sydney to Colombo.

Those who are viscerally opposed to privatisation and hold the view that there needs to be a Government-owned airline for the purpose of national pride have been visibly enamoured by the latest developments at the State-owned entity. The announced expansion plans of the airline together with its attention-seeking, low-altitude flyover were projected as signs of turnaround of the national carrier under the new Government and new management of the company by the aforementioned group of individuals. Unfortunately, in spite of the hasty optimism, the harsh reality is the carrier is still in the red, hence, its financial performance does not offer any comfort to the taxpayers.  

As per the Finance Ministry, the airline reported a pre-tax loss of Rs. 1.96 billion for the seven months ended October 2024, reversing a profit of Rs. 4.13 billion in the same period last year. The Treasury provided a Rs.9.8 billion equity injection in 2024 and allocated Rs. 20 billion from the Budget 2025 to repay the firm’s debt. The bailout from the taxpayers’ funds would provide a temporary financial relief to the entity, however, as this column has repeatedly pointed out, the Central Governments withdrawing from running airlines is a worldwide phenomenon. Ironically though, the peculiar island as usual is moving in the opposite direction. 

The airline industry is a sector in which even private enterprises struggle to remain profitable. Ansett Australia and Kingfisher were among those reputed private-owned airline companies that went bust. The legendary investor Warren Buffet once remarked: “The airline industry’s demand for capital ever since the first flight has been insatiable. Investors have poured money into a bottomless pit, attracted by growth when they should have been repelled by it.” 

The NPP administration has justified the continuous presence of the SLA under the Government ownership due to its overstated contribution to the tourism industry. Nevertheless, debunking the faulty argument, a few days ago, it was disclosed by the prominent thought leader Dhananath Fernando that only 25% of the tourists who visit the country arrive from the crisis-ridden airline.

Over the years, the masses have suffered greatly from the never-ending financial and operational woes of this burdensome entity. Will it be any different under the new management of the airline? Let’s wait and see.