Summary
- SriLankan Airlines, after achieving an operating profit for the primary time in 15 years, could also be an appealing goal for acquisition by Gulf-based airlines.
- SriLankan Airlines currently has a small fleet of 23 aircraft, consisting of Airbus A330s, A320s, and A321s.
- Despite the operating profit, the airline still reported a net loss, primarily on account of the devaluation of Sri Lanka’s currency in 2022.
SriLankan Airlines is reportedly considering the potential of being acquired by Gulf-based airlines after its anticipated privatization, as reported by the UAE media outlet The National. This development comes at the side of the airline’s return to an operating profit after a span of 15 years.
Likely bidders
While no official statements have been made and Gulf-based carriers haven’t yet indicated their interest, SriLankan Airlines’ chief executive Richard Nuttall has hinted that the airline could potentially change into an appealing goal for acquisition.
Photo: Suparat Chairatprasert/Shutterstock
In keeping with Nuttall, Gulf carriers – Emirates, Qatar Airways, Etihad Airways, Riyadh Air, or Saudia – may gain advantage from the airline’s quick access to its Asian neighbor India. The airline currently serves 13 Indian destinations, in accordance with its official website. Commenting on why the airline may very well be a worthwhile fit for a takeover, Nuttall added:
“For those who work with us then you definitely start being relevant to the Indian market in all directions. So, I believe that is the large interest for the Gulf carriers.”
The airline currently has a comparatively small fleet consisting of 23 aircraft. In keeping with Planespotters.net, SriLankan Airlines’ fleet comprises 11 Airbus A330s, seven Airbus A320s, and five Airbus A321 aircraft.
Photo: Soos Jozsef/Shutterstock
It’s value noting that SriLankan was once owned by a Gulf carrier. Emirates previously owned 40% of SriLankan Airlines until the Sri Lankan government bought all of the airline’s shares in 2008.
Current financial situation
SriLankan Airlines achieved a big milestone by recording an operating profit of 1.7 billion Sri Lankan rupees ($5.1 million) in FY22, marking the primary time in 15 years that the airline has turned an operating profit. This improvement is available in contrast to the previous 12 months’s lack of 8.1 billion Sri Lankan rupees ($25 million). In a press release, the airline’s spokesperson said:
“This can be a significant achievement considering the problems faced by airlines worldwide during that period owing to the Pandemic. SriLankan Airlines, furthermore, presented its unaudited dollar financial statements for the newest financial 12 months that led to March 2023 on the recent COPE meeting within the Parliament. In the course of the recently accomplished fiscal 12 months, the airline generated a passenger and cargo revenue of USD994 million and an operating profit of USD53 million.”
SriLankan Airlines has faced a myriad of challenges throughout the past years, including the sharp decline in tourism on account of the COVID-19 pandemic, the coordinated Easter suicide bombings by ISIS in 2019, and the financial disruptions experienced last 12 months.
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Sources: The National, Planespotters.net