Currency collapse doubles SriLankan Airlines losses to Rs35 billion

SriLankan Airlines reported a Rs35 billion net loss for the June quarter, more than double its operational loss of Rs12.5 billion, according to data contained in a Finance Ministry report. The significant widening between operational and net losses highlights the severe impact of currency depreciation on the carrier's bottom line.

Operational revenue for the airline improved to Rs82.8 billion in the period under review, up from Rs62.6 billion in the corresponding quarter of the previous year. This 32 percent increase in revenue was insufficient to offset operational costs and was further eroded by foreign exchange losses stemming from the rupee's sharp decline against major currencies.

The disparity between the airline's operational performance and its reported net loss underscores the vulnerability of Sri Lanka's aviation sector to currency fluctuations. SriLankan Airlines, which carries significant foreign currency-denominated debt and fuel costs, faces mounting pressure from the weakened rupee environment.

The airline's predicament reflects broader challenges facing Sri Lanka's economy following the currency crisis that intensified in recent months. Foreign exchange pressures continue to weigh on corporate earnings across multiple sectors dependent on imported goods and foreign-denominated obligations.