The future of SriLankan Airlines

Few weeks ago, it was revealed in the Parliament that the national carrier SriLankan Airlines had received 200 applications for the post of Chief Executive Officer (CEO). The NPP administration has made a firm decision to maintain the crisis-ridden airline under State ownership although the entity has been a huge burden to the taxpayers for so many years under Government control.

As per the Government, the ideal candidate should have at least 10 years of senior management experience in a recognised international airline, with a strong grasp of commercial aviation, flight operations, service delivery, engineering and maintenance. The previous CEO of the airline was Richard Nuttall – a British national who steered the airline from 2022 before stepping down last year to assume the role of President of Philippine Airlines. When the airline was under the management control of Emirates Airways, the CEO post was held by Peter Hill- another British citizen. 

Nuttall played a key role in managing the operations of the national airline amidst serious operational and financial challenges, coinciding with the COVID-19 pandemic as well as the 2022 economic crisis. Experts of the aviation industry criticised the Government for not renewing the contract of Nutall as his presence would have been hugely beneficial during the anticipated transformation and reform of the airline.

Having an experienced, foreign CEO brings a professional outlook to the airline, as such an individual is able to lead the organisation with objectivity and clarity, without being biased towards any particular faction or political party besides bringing his expertise and international connections to improve the overall performance of the organisation.  In the past, having local CEOs caused numerous problems to the organisation apart from opening the doors for the downfall of the airline. Readers may recall Kapila Chandrasena — the former CEO of SriLankan 

Airlines — was arrested in 2020, as he was accused of money laundering and bribery regarding certain fixed asset acquisitions during his tenure.

Whether the Government would opt for a local or foreign individual remains to be seen. Whoever is fortunate or unfortunate to become the CEO would have a highly challenging task on his hand given the extremely volatile and challenging nature of the aviation industry in addition to the operational and financial drawbacks associated with the airline itself. It was reported that the SriLankan Airlines group lost Rs. 10.7 billion in the three months to June 2025. Accumulated losses running into Rs. 628.3 billion is a huge impediment the airline has to overcome. The 2025 Budget allocated Rs. 20 billion to repay the interest and capital repayments of the national carrier. Over a five-year period, the Treasury is expected to inject Rs. 100 billion as equity to restructure the debt of the airline. While Sri Lanka continues to pour billions of taxpayers’ money to safeguard the State-owned airline, the Governments of neighbouring states are divesting State-owned  airlines to private ownership. Last December, Arif Habib Group acquired Pakistan International Airlines with the goal of transforming the loss-making airline. Similarly, in India too, Tata Group officially reacquired Air India in 2022.

The airline industry is characterised by intense competition, high operating costs, and external factors that can significantly impact profitability. Another serious challenge for the sector is the high capital requirements and operating costs. Airlines need significant investments in aircraft, maintenance and infrastructure, which can put a strain on cash flows and balance sheets and even private enterprises struggle to remain profitable. 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 should seriously rethink its stance on the national carrier once the financial restructuring process is finalised in view of the enormous burden the airline has placed on taxpayers over the decades.