Cabinet Spokesperson Minister Nalinda Jayatissa says the government remains committed to transforming SriLankan Airlines into a profitable entity, adding that some progress has already been made towards achieving that goal.
With tourist arrivals increasing, the government aims to bring the national carrier to a position where it can operate without incurring losses, Jayatissa said.
He added that the exact financial allocation for the initiative would be outlined in the 2027 Budget.
His comments follow the release of the Finance Ministry’s Mid-Year Fiscal Position Report, which highlighted continued financial difficulties at SriLankan Airlines.
According to the report, SriLankan Airlines recorded a loss before tax of Rs. 35.6 billion during the first three months of the 2026/27 financial year, compared with a net loss of Rs. 12 billion in the corresponding period of the previous financial year.
The airline’s revenue increased to Rs. 82.8 billion from Rs. 62.6 billion. However, expenditure rose by 40.4% to Rs. 95.2 billion, largely due to a 93% increase in aircraft fuel costs, which reached Rs. 41.2 billion.
The report attributed part of the airline’s operational difficulties to disruptions caused by the escalation of conflict in the Middle East, which led to the suspension of flights to several destinations in the region.
SriLankan Airlines’ group net loss stood at Rs. 32.2 billion, after taking into account a net income of Rs. 3.4 billion from SriLankan Catering.
The Finance Ministry said the airline continued to face significant structural financial and liquidity challenges, including high fuel and maintenance costs, foreign exchange losses, finance costs and a substantial debt burden.
As of the end of June 2026, the airline’s total liabilities stood at Rs. 561.4 billion, against assets of Rs. 209.9 billion, resulting in negative equity of Rs. 351.5 billion.
The government provided financial support during the first six months of 2026 to meet selected loan instalments and released US$30 million to address the airline’s short-term funding requirements.
In June 2026, the Cabinet also approved the establishment of a Strategy and Restructuring Committee to review the airline’s operations and strengthen its financial sustainability and commercial viability while reducing the long-term burden on government finances. (Newswire)