COVID-19 aids SriLankan in restructuring – Chairman

SriLankan Airlines (UL, Colombo Int’l) sees the COVID-19 pandemic as an opportunity to accelerate and/or launch cost-cutting initiatives that would otherwise have been impossible, Chairman Ashok Pathirage told Bloomberg Markets Asia. Pathirage said that despite the current problems, the carrier would likely emerge from the crisis stronger than before the pandemic. “We have negotiated with our lessors, reduced salaries of our employees, and we are planning to have a voluntary retirement scheme (VRS)… This is also a good opportunity for SriLankan Airlines to cut a lot of costs, particularly in leases. We have managed to reduce leasing cost by 18%, we have saved almost USD100 million per annum,” he said. He underlined ae point made earlier by Chief Executive Vipula Gunatilleka in an interview with ch-aviation that the crisis provided an opportunity to implement a lot of changes that had been stalled earlier. The airline has not sacked any of its workers but has trimmed many of the outsourced and contracted positions. Through voluntary measures, SriLankan has reduced its headcount by over 25% – from 7,000 to 5,000 employees. Pathirage admitted that even the reduced headcount was still excessive for the current environment. “There is still more work to be done. This is in a way a blessing in disguise,” he admitted. Pathirage underlined that in light of the crisis, the Sri Lankan government has steadfastly supported its flag carrier. But while the airline is currently in talks regarding a potential debt-for-equity swap with the state to lower its financial cost, privatisation is not on the cards.