Wednesday Oct 22, 2025
Wednesday Oct 22, 2025
Wednesday, 22 October 2025 00:00 - - {{hitsCtrl.values.hits}}
National carrier SriLankan Airlines reported a Rs. 2.73 billion loss for the year ending 31 March 2025, compared with a profit of Rs. 7.9 billion the previous year, its annual report showed, a reversal representing a decline of about 134.6 percent% year-on-year.
Revenue fell 10.8% to Rs. 303 billion from Rs. 339.6 billion, while operating expenditure decreased 11.7% to Rs. 276.3 billion from Rs. 313 billion.
Total assets declined 6.1% to Rs. 189.2 billion from Rs. 201.6 billion, while shareholders’ funds remained negative at Rs. 379.5 billion, a marginal improvement of 0.6% from the previous year’s negative Rs. 381.7 billion.
“The Airline recorded a net loss of Rs. 7.6 billion after accounting for unscheduled engine repair costs of Rs 2.2 billion and net finance charges of Rs. 31.6 billion,” Acting CEO and Group CFO Yasantha Dissanayake said.
He said that passenger revenue declined by 15% YoY to Rs. 234.5 billion, primarily due to capacity limitations, global reduction of yields and the impact from exchange rate, since Sri Lankan Rupee exhibited an appreciation during FY 2024/25.
In contrast, the cargo segment posted a 2% increase in revenue over FY 2023/24.
“This growth was driven by the implementation of a dynamic pricing strategy that accounted for fluctuating demand, seasonal patterns, capacity limitations, and targeted customer segmentation,” Dissanayake said.
“This approach enabled the airline to optimise revenue per kilogram of cargo transported, leveraging strategic freight opportunities amid broader logistics disruptions,” he added.
Other revenues grew by 16% to Rs. 27.1 billion, driven primarily by ground handling and ancillary services provided to other carriers operating to Sri Lanka which reflected the market’s robust recovery.
In notes to the financial statement, the airline said that the 7% Sovereign Guaranteed International Bonds issued by SriLankan Airlines in 2019 matured on 25 June 2024.
In line with Sri Lanka’s debt restructuring policy, the airline has been negotiating the timeline and manner of payment under the international Bonds in relation to which the interest had fallen due on 25 December 2022, 25 June 2023, 25 December 2023 and 25 June 2024 and in respect of the principal repayment which fell due on the 25 June 2024.
In 2025, with the approval of the Cabinet of Ministers, SriLankan appointed Lazard Freres SAS as its international financial adviser who has come up with a restructuring plan which has been approved by the Cabinet of Ministers. The financial adviser is in engagement with the Ad hoc committee of Bondholders for a potential restructuring plan.
SriLankan has also appointed Norton Rose Fulbright LLP as its international legal adviser to communicate with the Bondholders and the Trustee.
On 11 June 2025, SLA received a statutory demand from the Delegate of the Trustee that SLA shall make the full payment on or before 02 July 2025 with an indication of a possible winding up application against SriLankan under the Companies Act No 07 of 2007 of Sri Lanka if the airline fails to do so.
Upon SriLankan filing a petition seeking injunction preventing such winding up application, after consideration of the submissions made by the airline and the Government, the Commercial High Court has issued an enjoining order in favour of the airline.
The Attorney General’s Department is appearing for the Government in the said winding up application and has taken up the position that no cause of action has arisen for instituting a winding up application against the airline.
The airline has bonds worth $ 211.57 outstanding which included $ 175 million capital and $ 36.57 million unpaid interest.
In September S&P Global Ratings S&P explained that the latest upgrade reflects Sri Lanka’s efforts to complete the restructuring of remaining commercial debt, including Government-guaranteed SriLankan Airlines bonds, following the December 2024 exchange of most Eurobonds.
Talks on the airline’s debt began earlier this year with an offer grounded in comparability of treatment with other external creditors.
The agency sees a possibility of some holdout creditors that could make further resolution unlikely as time passes, but does not expect this to derail or reverse the overall restructuring because of comparability-of-treatment principles and most-favoured creditor clauses in the restructured bonds.
