SriLankan Airlines requests capital injection of $300mn

Colombo (News 1st) - Ceylon today reports that Chairman of SriLankan Airlines, Ashok Pathirage had requested for a capital injection of 300 million US dollars, to prevent the airline from facing a debt crisis. The request was made in a backdrop, where many corrupt transactions within the airline, have come to light. According to the financial column of Ceylon today, the Chairman of SriLankan Airlines had made this request when testifying at the parliamentary Committee on Public Enterprises. Citing the chairman of SriLankan, Ceylon FT said that the national carrier has reported a loss of USD 130 Mn, for the financial year ending March this year. The request follows after the government in February this year, approved a cash infusion of USD 50 Mn to SriLankan Airlines. According to Pathirage, since the government taking over SriLankan from Emirates in 2009, the national carrier has suffered cumulative losses amounting to approximately Rs.232 Bn. The capital injection request of USD 300 Mn is made against a backdrop, where many corrupt transactions, equipped with political influence and the support of former powerful leaders, have come to light. During the recent revelation of the Airbus scandal, it was revealed that the spouse of the former CEO of SriLankan, was involved in a bribery case worth 16 Mn USD, where 2 MN USD had been accepted. Trade unions of the national carrier point out, 6 of the 10 Airbus aircraft, that the Airline agreed to purchase, have already been obtained through a wet lease, and the lease installment being paid is higher than market rates. The losses arising due to this transaction, are yet to be quantified. In addition, the government incurred a USD 98 Mn cancellation fee to cancel three leases under the controversial USD 2.6 Mn re-fleeting deal that was signed in 2013. SriLankan suffered a further loss of USD 15.9 Mn, when an aircraft was left idle after Pakistan rejected an agreement to purchase an aircraft through a wet-lease. The airline also had to pay an extra cost of nearly USD 2 Million for failing to return an Airbus A320 aircraft which was leased from an Indian company. If such unplanned transactions that were done for personal gain were avoided, would SriLankan have to request for a capital injection of $ 300 million today?