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Sri Lankan Airlines looks for external sources to stay afloat

The government owned Sri Lankan Airlines has sought S$175 million of external funding after posting a record loss last year.

The cash strapped airlines posted a Rs.2.6 billion loss, and is turning to both the government and external funders in order to keep the company running.

Initially, the Civil Aviation Ministry of Sri Lanka sought an allocation of US$500 million over a period of three years for the airline from the budget. The Ministry also asked for US$20 million each over a period of three for Mihin Lanka, a wholly government owned enterprise which has made a loss of Rs.7 billion since its founding in 2007.

However, the government declared that only US$100 million each for a period of three years for Sri Lankan Airlines would be paid and US$10 million each for a period of two years for Mihin Lanka.

Sri Lankan Airlines Chief Executive Officer Kapila Chandrasena said that external sources of funding now had to be considered.

“We are discussing it. We wanted US$500 million in three years. Yet, we were promised it in the budget in five years. There is a gap in our financial requirement. To bridge that gap, a commercial borrowing will be considered.”

The decision comes at a time when Sri Lankan Airlines looks to expand the number of aircraft in its fleet from 20 to 30, despite the losses posted.