By Yakuta Dawood
Regardless of a complete standstill of its operations due to the prevailing Covid-19 third wave, SriLankan Airlines has no plans to lay off its employees as of yet, The Sunday Morning Business learns.
[caption id="attachment_139202" align="alignright" width="330"]
SriLankan Airlines Chairman Ashok Pathirage[/caption]
Speaking to us, SriLankan Airlines Chairman Ashok Pathirage stated that they have not let go of any employee due to the third wave and are not planning to reduce salaries of SriLankan employees.
“We are continuing the manner in which we have been operating and there is no change because of the current situation,” Pathirage said.
SriLankan Airlines had recently stopped all online and offline carriers into Sri Lanka indefinitely, with effect from 21 May until 31 May, in order to contain the spread of the Covid-19 situation in the country.
Also speaking to The Sunday Morning Business, Airport and Aviation Services (Sri Lanka) Ltd. (AASL) Chairman Maj. Gen. (Retd.) G.A. Chandrasiri stated that they too have not taken any decision to downsize and enforce salary cuts for existing employees.
“We have stopped the arrival (of tourists) into the country due to the prevailing condition. However, the departure rate has also gone down, with only 1,000 people going out per day. Other than that, the projects are still going on and the system has not stopped operating,” Maj. Gen. Chandrasiri added.
Last year, SriLankan Airlines was one of the first institutions to resort to salary cuts and layoffs. SriLankan Airlines Group Chief Executive Officer (CEO) Vipula Gunatilleke last year confirmed to The Sunday Morning Business who confirmed that the national carrier had brought down the monthly payroll cost to $ 7 million from approximately $ 8 following this decision.
With reference to the annual accounts from March 2017 to December 2017 of the financial year 2017/2018, the total remuneration cost of senior managers, managers, and executives constituted 2.36% of the total cost, while the total compensation cost of the cabin crew and flight crew constituted 2.84% and 3.75% of the total cost of the airline.
Furthermore, Gunatilleke also said that the monthly lease cost of the airline is around $ 14 million and constitutes about 40% of the airline’s monthly fixed costs.
Rentals on leased aircraft increased to Rs. 29 billion in 2019, compared to Rs. 25.7 billion in 2018, a 13.1% increase year-on-year (YoY). In 2019, the group’s operating expenses amounted to Rs. 215 billion, an increase of 23.2%, over the group’s operating expenses of Rs. 175 billion for the year 2018. Out of the total withholding tax expense of Rs. 6.9 billion, the withholding tax on aircraft leases amounts to Rs. 5.8 billion.
SriLankan Airlines has been a loss-making airline for over 10 years. The airline recorded a loss of Rs. 40 billion in financial year (FY) 2017/18, the highest annual loss since Emirates’ departure from its management in 2008.
Accordingly, SriLankan Airlines accrued losses of Rs. 240 billion during the 10-year period from 2009 to 2019. In addition to these losses, the total value of loans owed by SriLankan Airlines to state banks and state institutions, including the Ceylon Petroleum Corporation (CPC), was Rs. 146 billion as of October last year.
SriLankan Airlines Chairman Ashok Pathirage[/caption]
Speaking to us, SriLankan Airlines Chairman Ashok Pathirage stated that they have not let go of any employee due to the third wave and are not planning to reduce salaries of SriLankan employees.
“We are continuing the manner in which we have been operating and there is no change because of the current situation,” Pathirage said.
SriLankan Airlines had recently stopped all online and offline carriers into Sri Lanka indefinitely, with effect from 21 May until 31 May, in order to contain the spread of the Covid-19 situation in the country.
Also speaking to The Sunday Morning Business, Airport and Aviation Services (Sri Lanka) Ltd. (AASL) Chairman Maj. Gen. (Retd.) G.A. Chandrasiri stated that they too have not taken any decision to downsize and enforce salary cuts for existing employees.
“We have stopped the arrival (of tourists) into the country due to the prevailing condition. However, the departure rate has also gone down, with only 1,000 people going out per day. Other than that, the projects are still going on and the system has not stopped operating,” Maj. Gen. Chandrasiri added.
Last year, SriLankan Airlines was one of the first institutions to resort to salary cuts and layoffs. SriLankan Airlines Group Chief Executive Officer (CEO) Vipula Gunatilleke last year confirmed to The Sunday Morning Business who confirmed that the national carrier had brought down the monthly payroll cost to $ 7 million from approximately $ 8 following this decision.
With reference to the annual accounts from March 2017 to December 2017 of the financial year 2017/2018, the total remuneration cost of senior managers, managers, and executives constituted 2.36% of the total cost, while the total compensation cost of the cabin crew and flight crew constituted 2.84% and 3.75% of the total cost of the airline.
Furthermore, Gunatilleke also said that the monthly lease cost of the airline is around $ 14 million and constitutes about 40% of the airline’s monthly fixed costs.
Rentals on leased aircraft increased to Rs. 29 billion in 2019, compared to Rs. 25.7 billion in 2018, a 13.1% increase year-on-year (YoY). In 2019, the group’s operating expenses amounted to Rs. 215 billion, an increase of 23.2%, over the group’s operating expenses of Rs. 175 billion for the year 2018. Out of the total withholding tax expense of Rs. 6.9 billion, the withholding tax on aircraft leases amounts to Rs. 5.8 billion.
SriLankan Airlines has been a loss-making airline for over 10 years. The airline recorded a loss of Rs. 40 billion in financial year (FY) 2017/18, the highest annual loss since Emirates’ departure from its management in 2008.
Accordingly, SriLankan Airlines accrued losses of Rs. 240 billion during the 10-year period from 2009 to 2019. In addition to these losses, the total value of loans owed by SriLankan Airlines to state banks and state institutions, including the Ceylon Petroleum Corporation (CPC), was Rs. 146 billion as of October last year.