SriLankan Airlines (UL, Colombo Int'l) is negotiating a fresh loan of USD75 million from two state-owned banks, Bank of Ceylon and the Peoples Bank, to which it already collectively owes USD407 million, Chairman Ashok Pathirage said during a media briefing.

The Government of Sri Lanka has already approved a new loan to the state-owned carrier but talks about terms have yet to conclude. The airline will also restructure its existing debt to the two banks, of which USD220 million is owed to the Bank of Ceylon and USD187 million to the Peoples Bank. The carrier underlined that while it suspended the payments of the principal, it has not paused repayments of interest on its existing loans.

SriLankan Airlines is going to seek to extend the terms of the existing loans and secure a grace period in the short-term. Pathirage added that the airline would also seek to restructure its USD275 million debt to state-owned fuel supplier Ceylon Petroleum Corporation.

Besides approving the new loan, the government has also agreed to suspend withholding tax, effectively providing an extra USD80 million in relief to the airline.

For its part, SriLankan Airlines has been in talks about the terms of its aircraft leases. According to the ch-aviation fleets ownership module, the carrier leases all of its 26 aircraft from Air Lease Corporation (seven aircraft), Avolon (six), AerCap, Carlyle Aviation Partners (three each), Park Aerospace Holdings (two), Aircastle, Peregrine Aviation, Thunderbolt Aircraft Lease, Whitney Leasing, and Seraph Aviation Management (all one each).

The airline is continuing to review its post-COVID fleet and network.

Pathirage reaffirmed that "if anything, [the pandemic] accelerated" the ongoing restructuring, a point made earlier by Chief Executive Vipula Gunatilleka in an interview with ch-aviation.

Having already terminated contracts with around 500 outsourced staff, the airline is currently planning to reduce its in-house staff by the same number. Pathirage underlined that this process will be conducted entirely through voluntarily leaves and no forced redundancies are planned.