Sri Lanka Carrier’s Long-Term Plan To Expand Airline Fleet Despite Crisis

Just two days after the government defaulted on
its $51 billion foreign debt, Sri Lanka cash-strapped national carrier announced plans to lease up to 21 aircraft.

The island nation is suffering its worst economic downturn since 1948, with severe shortages of essential goods and frequent blackouts.

Huge protests have called for the government’s resignation, which has asked Sri Lankans abroad to help pay for imports.

Despite the crisis, Sri Lankan Airlines plans to increase its fleet from 24 to 35 planes over the next three years.

“Sri Lankan Airlines has issued four requests for proposals to lease up to 21 aircraft,” it said in a statement.

The announcement came after the government suspended all foreign debt repayments ahead of next week’s IMF debt restructuring talks.

The national carrier’s balance sheet shows $1.7 billion in debt and a $1.56 billion loss for March 2020.

On the same day, Fitch downgraded $175 million in airline bonds from C to CC, indicating the carrier was “near default.”

Fitch said the airline’s new rating reflected Sri Lanka’s default announcement.

The IMF has repeatedly urged Sri Lanka to privatize the airline, calling it a financial burden.