SriLankan Airlines Jet Leasing Sparks Outrage Amidst Deep Economic Crisis

Skift grip

Sri Lanka is struggling to provide fuel to its own citizens, so how can a government-run entity justify using the country’s limited resources to power more planes?

Rashaad Jordan

A plan by Sri Lanka’s national airline to lease two dozen planes has drawn public criticism and condemnation from the opposition as the country grapples with its worst financial crisis in decades.

Sri Lanka is struggling with low reserves which have shrunk by more than 70% over the past two years to $1.93 billion at the end of March.

The dollar crisis has caused severe shortages of fuel, food and medicine, with power cuts for hours a day for more than a month.

On Tuesday, Sri Lanka suspended some external debt repayments and said it would instead use the meager dollar cache to focus on essential imports.

Protesters demanding the resignation of President Gotabaya Rajapaksa staged daily sit-ins outside his office.

Tender notices for the lease of 42 aircraft were published Thursday on the airline’s website.

SriLankan Airlines is struggling with a decline in tourism due to the Covid-19 pandemic and economic crisis.

In 2019/20, SriLankan Airlines reported a loss of 44.14 billion Sri Lankan rupees ($140.90 million) compared to 41.70 billion Sri Lankan rupees the previous year.

“This must be a joke?! said Harsha de Silva, MP for the main opposition Samagi Jana Balawegaya (SJB) alliance, in a post on Twitter.

“Sri Lanka is bankrupt; no fuel, gas or medicine. Where the hell is the money for this nonsense? ! Better to clarify immediately.

Another opposition party, the United National Party (UNP), demanded that the carrier cancel the proposal as many Sri Lankans voiced their disapproval online.

“What good is a new plane when you won’t have fuel to fly,” said Twitter user Shiv Theyagamurti.

The airline’s chairman, Asoka Pathirage, said the carrier was looking for 21 planes to lease in a first round as part of its 2022-2025 business plan to replace planes that would be phased out of its existing fleet.

“We only look at market availability. SriLankan Airlines will finance these leases and we will not be dependent on government funds,” he told Reuters.

“The airline has made a profit. We have debts but we have to earn money to pay them off.

The government will begin talks with the International Monetary Fund on Monday for a loan program.

(Reporting by Uditha Jayasinghe in Colombo; Editing by Robert Birsel)

This article was written by Uditha Jayasinghe from Reuters and has been legally licensed through Industry Dive Content market. Please direct all licensing questions to [email protected].