SriLankan Airlines (UL, Colombo Int'l) sees the COVID-19 pandemic as an opportunity to accelerate and/or launch cost-cutting initiatives that would otherwise have been impossible, Chairman Ashok Pathirage told Bloomberg Markets Asia.

Pathirage said that despite the current problems, the carrier would likely emerge from the crisis stronger than before the pandemic.

"We have negotiated with our lessors, reduced salaries of our employees, and we are planning to have a voluntary retirement scheme (VRS)... This is also a good opportunity for SriLankan Airlines to cut a lot of costs, particularly in leases. We have managed to reduce leasing cost by 18%, we have saved almost USD100 million per annum," he said.

He underlined ae point made earlier by Chief Executive Vipula Gunatilleka in an interview with ch-aviation that the crisis provided an opportunity to implement a lot of changes that had been stalled earlier.

The airline has not sacked any of its workers but has trimmed many of the outsourced and contracted positions. Through voluntary measures, SriLankan has reduced its headcount by over 25% - from 7,000 to 5,000 employees. Pathirage admitted that even the reduced headcount was still excessive for the current environment.

"There is still more work to be done. This is in a way a blessing in disguise," he admitted.

Pathirage underlined that in light of the crisis, the Sri Lankan government has steadfastly supported its flag carrier. But while the airline is currently in talks regarding a potential debt-for-equity swap with the state to lower its financial cost, privatisation is not on the cards.

"We are sitting with almost USD1 billion of debt, which we owe predominantly to the government. We have raised money through international bonds. We are talking to the government on either converting some of the debt or putting in new capital," Pathirage said, underlying that the authorities have so far been very helpful to the airline.

Pathirage added that the airline was in talks with Airbus about its future aircraft deliveries but had not reached any decisions yet. According to the ch-aviation fleets advanced module, the airline has outstanding firm orders for four A350-900s, although it said before the pandemic that it would like to replace them with A330-900s.

Pathirage underlined that while Sri Lanka, as a country, has successfully controlled the intercommunal spread of COVID-19, given a lack of domestic routes, SriLankan Airlines is now awaiting the outcome of talks with other countries on the creation of travel bubbles. "The problem is not with Sri Lanka, it is with the region", he claimed adding that the government is in talks with Singapore and the United Kingdom, and also to facilitate connecting travel via Colombo Int'l between these two destinations. China is also involved in the talks.