Sri Lankan Air - The next to go?
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Sri Lankan Air - The next to go?
Sri Lankan Airlines posts negative net worth
COLOMBO, Nov. 20, Kyodo - SriLankan Airlines total liabilities exceeded total assets in the year ended March 31, 2001, and its auditors have cast doubts ''the company will be able to continue as a going concern,'' the beleaguered airline's annual report revealed Tuesday.
SriLankan incurred its biggest-ever loss, 6.5 billion rupees (about $70.7 million), during the year, with current liabilities exceeding current assets by 4.4 billion rupees and total liabilities ahead of total assets by 3.7 billion rupees.
In July this year, the airline suffered a crippling blow when a terrorist attack on the Colombo International Airport saw the company lose half its fleet -- three Airbus aircraft destroyed and three more damaged.
SriLankan, which is owned 43.6% by Emirates of Dubai and managed by Emirates, said the airport losses will be fully borne by the insurers, but it will not be replacing the aircraft destroyed in the attack.
''We have already taken a number of key decisions: to reduce our route network; not replaced the aircraft lost in the July 24 attack; introduced voluntary severance schemes to reduce staff numbers; a complete freeze on all staff recruitment; and a major cost reduction program,'' Managing Director Tim Clark said.
The Sri Lankan government owns the airline's controlling equity.
[ 22 November 2001: Message edited by: L1011 ]
COLOMBO, Nov. 20, Kyodo - SriLankan Airlines total liabilities exceeded total assets in the year ended March 31, 2001, and its auditors have cast doubts ''the company will be able to continue as a going concern,'' the beleaguered airline's annual report revealed Tuesday.
SriLankan incurred its biggest-ever loss, 6.5 billion rupees (about $70.7 million), during the year, with current liabilities exceeding current assets by 4.4 billion rupees and total liabilities ahead of total assets by 3.7 billion rupees.
In July this year, the airline suffered a crippling blow when a terrorist attack on the Colombo International Airport saw the company lose half its fleet -- three Airbus aircraft destroyed and three more damaged.
SriLankan, which is owned 43.6% by Emirates of Dubai and managed by Emirates, said the airport losses will be fully borne by the insurers, but it will not be replacing the aircraft destroyed in the attack.
''We have already taken a number of key decisions: to reduce our route network; not replaced the aircraft lost in the July 24 attack; introduced voluntary severance schemes to reduce staff numbers; a complete freeze on all staff recruitment; and a major cost reduction program,'' Managing Director Tim Clark said.
The Sri Lankan government owns the airline's controlling equity.
[ 22 November 2001: Message edited by: L1011 ]
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Having worked for these folks for over five years...would have to say, the BEST I have worked for in many a moon but, they have big problems...wish them all the best of luck....they will need it. Would suggest that...they expand the schedule and concentrate on promoting SriLanka as a tourist destination...they have no other choice. Would have to say...cabin service is superb, company management...well, less so, flight ops excluded, they were first rate IMHO.
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411...........the BEST you have ever worked for? I went down there a few years back to look around and it scared the %^&^$ out of me. Very surprised to hear those comments from anyone! Yikes
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It doesn't matter how shiny and new Air Lanka's jets are, and how good its service is: Sri Lanka is no garden spot. The ongoing civil war between the Sinhalese and Tamil separatists with 55,000 dead soldiers and dead civilians during the past 15 years does not promote tourism. Instead of pumping millions of dollars into its national "showcase" airline, this bankrupt government would be well to do to get its basket case economy in order first, starting with a geopolitical settlement with the Tamils. Meanwhhile, the airline would be well to do in providing essential regional service with cheaper, older jets, rather than to try to be a world player with big jets in funneling passengers from Euorope to the Far East.
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The Tamils want over 50% of the island yet are only 18% of the population....no end to the conflict IMHO anytime soon. Up until 1996 or so, UL expats were treated rather well, better than the locals in many cases, and if one stayed for over five years, a sizeable length of service payment at contract termination. The financial problems started with the airline once Airbus equipment was purchased...way too expensive...should have kept the TriStars and 737's.
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Emirates' investment in Sirlankan was really rather cunning - it allowed them to route substantial numbers of subcontinent workers through CMB to India (which has some of the most restrictive policies on passenger air transport around - and correspondingly airlines that can get in there enjoy high yields) as their own services were running close to capacity.
They can of course 'franchise' more routes from Indian Airlines - but at vast expense (as happened with BLR earlier this year).
Emirates also benefits from the 'economies of scale' generated by having Srilankan operate A320s and A330s - and I have no doubts at all they make huge amounts of money (as did SAir Group in the same way) from the provision of management, software, crewing, training, marketing and other support services.
I saw the L1011s at GAMCO being prepared for delivery to Transat (in the case of the -500s anyway; the longbodies were parted out). Cosmetically, they were in terrible shape - I was told that the GAMCO staff refused to go on the things until they were fumigated and steam cleaned - but structurally sound as a pound. Next to them was a Gulf Air A330 which was only a couple of years old, undergoing a C check. Lots of cracks, lots of corrosion and lots of snags.
Says it all really - El-Tens for ever!
They can of course 'franchise' more routes from Indian Airlines - but at vast expense (as happened with BLR earlier this year).
Emirates also benefits from the 'economies of scale' generated by having Srilankan operate A320s and A330s - and I have no doubts at all they make huge amounts of money (as did SAir Group in the same way) from the provision of management, software, crewing, training, marketing and other support services.
I saw the L1011s at GAMCO being prepared for delivery to Transat (in the case of the -500s anyway; the longbodies were parted out). Cosmetically, they were in terrible shape - I was told that the GAMCO staff refused to go on the things until they were fumigated and steam cleaned - but structurally sound as a pound. Next to them was a Gulf Air A330 which was only a couple of years old, undergoing a C check. Lots of cracks, lots of corrosion and lots of snags.
Says it all really - El-Tens for ever!
Heck - how will I get to my island if UL fall over !!!!
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Its a shame that Sri Lanka is going through all this. Its is potentially a fantastic 'garden spot'. The culture, (ancient temples carved into rock etc...) the beaches (great surf destination) the incredible food, the friendly people (those not holding automatic weapons) and the affordability make it my favourite place to go.
Before the attack on the airport, tourism was really starting to kick off, with lots of holiday- makers heading in from Europe. They are beginning to return now, but 5 of my friends who have just returned last week say its still pretty quiet.
Seeing that Emirates are expanding their own fleet, would they let Air Lanka cease to exist, or would it be in their interest to prop it up?
Before the attack on the airport, tourism was really starting to kick off, with lots of holiday- makers heading in from Europe. They are beginning to return now, but 5 of my friends who have just returned last week say its still pretty quiet.
Seeing that Emirates are expanding their own fleet, would they let Air Lanka cease to exist, or would it be in their interest to prop it up?
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411
I also worked for Air-Lanka for a few years, and really enjoyed myself there. The routs and layovers (specially Rome) were wonderful.
The only problem I had was pay. I agree with you about the purchase of the air buses being foolish, but the Shirlankans cannot refuse anything offered on credit. For example, the two - 500 Tri-Stars, not that they ever made a payment on them. I suspect the same thing with the Airbuses. We had ("e") made special to Kuwait that was bought cheap except when you concider the high time on the airplane. I would still love to go back.
I also worked for Air-Lanka for a few years, and really enjoyed myself there. The routs and layovers (specially Rome) were wonderful.
The only problem I had was pay. I agree with you about the purchase of the air buses being foolish, but the Shirlankans cannot refuse anything offered on credit. For example, the two - 500 Tri-Stars, not that they ever made a payment on them. I suspect the same thing with the Airbuses. We had ("e") made special to Kuwait that was bought cheap except when you concider the high time on the airplane. I would still love to go back.
