Sri Lanka Aviation

• The GOSL will write off the losses in the books via a capitalisation to present a clean balance sheet and achieve a zero finance cost status. This will cost the GOSL approximately Rs. 135 billion or US$ 939 million.
• The four A350 900 aircraft be subleased to other operators or cancel the lease contract at a cost of US$ 200 million to US$ 300 million and the GOSL to foot the bill. This will cost the GOSL approximately Rs. 43.2 billion or US$ 300 million.
• Although resource optimisation is strongly recommended by Nyras, the costs and outcome have not been incorporated in its projections. The implementation of a resource optimisation programme will have a cost impact in the year of implementation and could be in the range of Rs. 15 billion to Rs. 18 billion or US $ 100 million. Analysing the above, Nyras says, the cash outlay would be in the range of Rs. 175 billion to Rs. 200 billion.
• Among the factors covered by the Nyras plan are a shrink in Srilankan fleet from 25 to 20, increase in aircraft utilisation, increase passenger numbers, increase seat capacity, increase block hours and “consider Alternative D to remove ‘hangman’s noose’ of Aercap, Airbus and Rolls Royce contracts.” This alternate “D” related to the administration process.

Around $1.25 billion injection is required from GOSL to have a clean sheet with the current economic crisis that is highly unlikely.

A telling excerpt from the article (not taking the plundering into account) is this though:-

In 2008, when Emirates pulled out, the accumulated profit of SriLankan was Rs. 9.288 billion in that financial year. From 2008 to 2015, when the Rajapaksa administration ran it, the loss for the seven years was Rs. 128.238 billion.

And there are some who want them back

One of the other other reasons for the early presidential election in 2014 other than the astrological bruuhaa was this oncoming economic crisis.

I'm wondering about this too!!, Publicity to SriLankan A350XWB from Airbus is 0% till this moment when comparing to other #1 A350XWB aircrafts of other carriers. UL is one of the first 10 carriers operating A350XWB.

Aercap has not responded to my inquiry regarding the UL A350 order - these deals are normally confidential - not really a surprise.



Good article. Unfortunately the GOSL is nothing but NATO members.....

They did just vote themselves more vehicles and money - shows where their priorities lie.

The sad truth is the entire country is bankrupt - the fact that they are talking to the IMF says it all.

As long as the culture of impunity and zero accountability continues to exist it's all a lost cause imho.

There could be # of new airlines could be launched for a faction of billion dollars. EK was $10million dollars in 1985...air arabia was 10million dollars to name few

SriLankan's first A350 / MSN52 when the aircraft was at Station 40 for FAL



source: 6play

Beauty!!!

Well UL's debt is apparently around $1 billion so if UL is unable to service said debt, the government as the ultimate owner of UL will need to cover the amount unless they put the company into liquidation. However if they do that then no supplier would ever touch another airline from Sri Lanka.

That said they could theoretically transfer select liabilities (such as aircraft and non excess staff) to a new company and restart the airline as a Public Private Joint Venture - like what Malaysia did with MH. This might be what Ejanson alluded to above?

Honestly anything is possible these days!

Honestly I believe government should get out airline and airport business...

Lets look at scenarios

1. Closing down the airline

This will be a political suicide to the current government...imagine over 6000 employees out of jobs. MR and gang would go to town complaining that current administration made over 6000 unemployed.

2. Injecting over $1.3 bn (new Capital)

with so many debt GOSL is unable to borrow any more money. For Country like Sri Lanka 1.3 bn is a extremely big money. Again new capital would not do any benefit to the airline; unless airline trims its operational costs...i.e. trimming the workforce by at least 30%. If that does not take place in about 5 Years airline need further capital injection.

3. Closing down and relaunch

it would be like Air Ceylon 3.0 and 10 years later requesting more capital

4. Looking for a foreign partner

No airline is going to touch this airline at current state

What I would do
Sell catering and ground handling. this would cover nearly 10% debt and close this airline.

Sell CMB and RML to 2 different entities (will induce competition and bring the landing cost down...then more airline will fly to SL)
Revamp Ceylon Petroleum Corp; Jet A 1 fuel business (currently most expensive Jet fuel in Asia)

^^^thats what I would do...it would never happen coz politicians are politicians

UL is technically bankrupt according to auditors as total liabilities exceed total assets.

The entity requires bold decisions to restore administrative and financial discipline within the top management and a policy of zero tolerance for any conflict of interest.

What UL needs is an honest and professional hands-on management and all transactions subject to transparency and strict audit with emphasis on improving human resources and weeding out inefficient members.

UL needs to rearrange the fleet and network by reviewing the schedule, frequency and timing of flights, and looking at which destinations were working and which were not.

UL over relied on short haul traffic, the long haul network it does have is not robust.

There is a strong future for UL if it can implement a deep restructure and embark on a new strategy, UL needs to refocus and be reinvigorated and the challenge is to transform a culture and deliver.

The routes, aircraft, seats and marketing plans flagged under the restructuring plan are not bold, despite being overdue, and in response to the "desperate" situation.

A vision for Sri Lankan is lacking, despite many opportunities it sits on.

Dude you just plagiarized http://tribune.com.pk/story/1039855/...ake-off-again/

and



and changed PIA and Asiana to UL??

There is a further $2 Billion + in future liabilities. Taxpayers will be on the hook for this as well.

It's not correct that a liquidation will result in suppliers refusing to do business with any Airline in Sri Lanka.

Business is business.

In this case Airlines will need to pay a premium for things like leases and they may be put on a "cash only" basis for parts - it's not a deal breaker of any kind.

I've sub contracted to a Nigerian Airline that didin't pay anyone on time (including their own staff). Some nights we couldn't get fuel as the bills hadn't been paid - they literally paid for one bowser at a time! They were on a cash basis with most suppliers - but continued to operate.

My company took an A340-500 in lieu of payments!

UL's first A350 (MSN52) had been parked in the P18 since 17-Mar for ground tests which normally takes upto two weeks then it will be moved to A380site for Rework.

Hi got somes pics for you my friends Tell me if you want more and see you soon @THOFBOSS https://flickr.com/photos/131621852@...57666596846865

Wow!! when did you take these pictures? Any idea when it will be rolled out to A380site for rework. Looking forward to see more pictures. thanks a lot.

Thanks mate for the photos. Can't wait to see her fully painted.

Also thanks to banuthev for the earlier picture of the bird in the FAL