National carrier SriLankan Airlines reported a loss of Rs. 2.73 billion for the year ending 31 March 2025, compared with a profit of Rs. 7.9 billion the previous year, marking a year-on-year decline of approximately 134.6 percent, according to its annual report.
Revenue fell 10.8% to Rs. 303 billion from Rs. 339.6 billion, while operating expenditure decreased 11.7% to Rs. 276.3 billion from Rs. 313 billion. Total assets declined 6.1% to Rs. 189.2 billion from Rs. 201.6 billion, while shareholders’ funds remained negative at Rs. 379.5 billion, a slight improvement of 0.6% from the previous year’s negative Rs. 381.7 billion.
Acting CEO and Group CFO Yasantha Dissanayake stated that the airline recorded a net loss of Rs. 7.6 billion, factoring in unscheduled engine repair costs of Rs. 2.2 billion and net finance charges of Rs. 31.6 billion.
Passenger revenue fell 15% year-on-year to Rs. 234.5 billion, primarily due to capacity limitations, reduced global yields, and the appreciation of the Sri Lankan rupee during FY 2024/25. In contrast, cargo revenue grew 2% compared to FY 2023/24, supported by a dynamic pricing strategy accounting for demand fluctuations, seasonal patterns, and targeted customer segmentation.
Other revenues rose 16% to Rs. 27.1 billion, driven mainly by ground handling and ancillary services provided to other carriers, reflecting a strong market recovery.
The airline noted in its financial statements that its 7% Sovereign Guaranteed International Bonds issued in 2019 matured on 25 June 2024. In line with Sri Lanka’s debt restructuring policy, SriLankan has been negotiating repayment timelines for these bonds, including unpaid interest and principal amounts.
In 2025, the Cabinet approved the appointment of Lazard Frères SAS as the airline’s international financial adviser, which has proposed a restructuring plan also approved by the Cabinet. Norton Rose Fulbright LLP was appointed as the international legal adviser to coordinate with bondholders and the Trustee.
On 11 June 2025, SriLankan received a statutory demand from the Trustee Delegate requiring full payment by 2 July 2025, with a warning of a possible winding-up application under the Companies Act if payment was not made. The airline filed a petition seeking an injunction, and the Commercial High Court issued an enjoining order in favor of SriLankan. The Attorney General’s Department, representing the government, has stated that no cause of action exists for winding up the airline.
SriLankan currently has $211.57 million in outstanding bonds, including $175 million in principal and $36.57 million in unpaid interest. In September, S&P Global Ratings upgraded its view, noting Sri Lanka’s progress in restructuring remaining commercial debt, including government-guaranteed SriLankan bonds. While some holdout creditors may delay full resolution, the agency does not expect this to derail the overall restructuring due to comparability-of-treatment principles and most-favored creditor clauses in the restructured bonds.
