SriLankan Airlines 2024/25 results show improved underlying operations but a LKR 2.7 billion Group loss, 487 cancellations and negative equity.
COLOMBO – SriLankan Airlines improved its underlying operating performance during the 2024/25 financial year, but engine shortages, heavy finance costs and a severely weakened balance sheet continued to weigh on the national carrier, according to its annual report.
Despite 487 flight cancellations, declining passenger revenue and more than LKR 379 billion in negative Group equity, the airline continued operations while government-backed debt restructuring moved forward.
The SriLankan Airlines Group recorded an operating profit of LKR 28,422.90 million before foreign exchange gains, compared with LKR 28,147.92 million a year earlier. Excluding foreign exchange gains and unscheduled engine repair costs, the operational loss identified in the report narrowed to LKR 6,660 million from LKR 18,792 million in 2023/24, an improvement exceeding LKR 12 billion.
Currency movements, however, had a substantial impact on the reported figures. The Group recorded a foreign exchange gain of LKR 3,925 million in 2024/25, sharply below the LKR 26,717 million gain recorded a year earlier following the restatement and revaluation of foreign-currency liabilities after the Sri Lankan Rupee appreciated.
Passenger Revenue Falls as Capacity Tightens
Total Group revenue declined to LKR 303,093.89 million from LKR 339,591.65 million in 2023/24, while standalone company revenue fell to LKR 296,506 million from LKR 333,614.09 million.
Passenger revenue dropped 15 per cent to LKR 234.5 billion, with the report attributing the decline primarily to capacity constraints, lower global yields and the stronger Sri Lankan currency.
Cargo provided a contrasting result. Revenue increased by 2 per cent, while route yield rose from USD 1.17 to USD 1.29 per kilogramme.
The most immediate operational constraint involved the availability of Pratt & Whitney engines for the airline’s Airbus A320neo and A321neo fleet. Unscheduled maintenance, engineering delays and spare-parts shortages reduced available capacity and contributed to 487 flight cancellations during the year.
SriLankan spent LKR 2.2 billion on unscheduled engine repairs and lease costs, while short-term damp-leases and wet-leases were used to maintain schedules and protect important revenue-generating routes.
At the end of the financial year, the operating fleet comprised 22 aircraft, including 13 narrow-body and nine wide-body aircraft.
Passenger capacity, measured in Available Seat Kilometres, fell 5 per cent to 14,714.85 million. Revenue Passenger Kilometres declined to 11,571.61 million, producing a passenger load factor of 78.64 per cent, against 79.08 per cent in 2023/24.
Across the wider operation, Available Tonne Kilometres stood at 1,908.92 million and revenue traffic reached 1,338.08 million Revenue Tonne Kilometres. That produced an overall load factor of 70.10 per cent, below the reported breakeven level of 76.17 per cent.
Ground Handling and Catering Provide Support
Businesses outside passenger operations remained an important source of revenue.
Ground handling and air terminal services increased 17 per cent to LKR 24.9 billion, supported by increased international airline traffic at Bandaranaike International Airport.
SriLankan Catering revenue rose 13 per cent to LKR 7.3 billion. According to the annual report, both auxiliary businesses remained consistently profitable, helping offset deficits from passenger routes while supporting Group cash flow.
Operating expenditure before exchange gains and unscheduled repair costs fell 9 per cent to LKR 276,332.31 million from LKR 312,929.37 million in 2023/24, with lower jet-fuel prices and cost-saving measures contributing to the reduction.
At standalone company level, operating profit before exchange gains was LKR 22,472.37 million.
Those operating improvements were not enough to deliver a positive final result.
Finance Costs Push Group Back Into Loss
The Group ended the financial year with a net loss of LKR 2,735.28 million, reversing the LKR 7,925.01 million net profit recorded in 2023/24.
SriLankan Airlines itself recorded a net loss of LKR 7,594.56 million, compared with a LKR 3,870.86 million profit in the previous year.
Net finance costs reached LKR 31.6 billion, while unscheduled engine repair costs added LKR 2.2 billion. The report identified global supply-chain difficulties and continuing engine performance problems affecting the Airbus A320/321neo fleet among the major causes of additional maintenance expenditure.
The balance sheet presents a more serious long-term challenge.
As at March 31, 2025, Group assets totalled LKR 189,256.80 million, down from LKR 201,648.71 million in 2024. Company assets stood at LKR 181,971.09 million.
Group shareholders’ funds were negative by LKR 379,519.61 million, while company equity was negative by LKR 403,172.55 million, leaving the carrier severely undercapitalised.
Government-Backed Debt Restructuring
The Government of Sri Lanka has initiated financial restructuring measures aimed at addressing the airline’s debt and cash-flow pressures.
State-owned bank loans are being restructured under a framework providing for full repayment over five years, while Lazard Frères SAS was appointed as financial adviser for restructuring the USD 175 million Sovereign-Guaranteed International Bond.
The 2024/25 annual report said negotiations with bondholders were underway at the time of reporting. SriLankan Airlines subsequently announced in March 2026 that the consent solicitation, exchange and tender offer relating to the USD 175 million bond had been successfully completed.
Alongside financial restructuring, SriLankan introduced a five-year strategic plan covering fleet expansion and modernisation, revenue growth, customer experience, operational efficiency, market share, digital transformation, sustainability and workforce development. The airline’s annual report describes the plan as part of its effort to secure medium- to long-term sustainability.
The supplied report also identifies a greater emphasis on higher-demand regional markets, including India, the Middle East and Southeast Asia, alongside optimisation of lower-yield long-haul services, greater automation of revenue management and expanded code-share arrangements.
SriLankan Airlines Group employed an average of 6,786 people during the year, including 6,071 at company level. Staff turnover was approximately 7 per cent, which the report attributed to domestic economic conditions and competition from Middle Eastern airlines for engineering, flight-crew and ground-operations personnel.
The figures leave SriLankan with two markedly different pictures of its performance: underlying operations showed improvement in several areas, but finance costs, fleet constraints and deeply negative equity continued to place substantial pressure on the national carrier as its restructuring moved forward.
