Already in poor financial health before the COVID-19 crisis, Sri Lankan Airlines is now reliant on its government owner, having suffered a 70% fall in sales during a pandemic-hit 2020/21 financial year.
Thus it is keen to secure alternative revenue streams from its cargo business, for which it is seeking extra freighter capacity, and from Sri Lankan Engineering.
On the MRO side, one avenue to explore is transition and end-of-lease checks for lessors retrieving aircraft from struggling airlines in India and Southeast Asia.
Last week the maintenance company said it had completed an inspection for Aircastle at its home base in Colombo, adding: “We are proud to have had Aircastle as a valuable customer and can support the wider leasing community with their aircraft parking, transitions checks, inspections and C checks.”
Although that aircraft was reported to have come from one of the healthier Indian airlines—and was not an early lease termination—opportunities may arise from more distressed situations.
For example, in May a UK court issued a summary judgement for $25 million in favor of Irish lessor Goshawk in a claim against Spicejet, although it also granted a stay to allow the parties to explore alternative dispute resolution in order to avoid an insolvency of the airline.
Speaking to Aviation Week in March, Sri Lankan’s head of engineering, Shevantha Weerasekera, said the company was “looking at new capabilities that we can justify based on the demand from our parent airline as well as external customers”.
These included an expansion of its line maintenance network into Asia and the Middle East, and a larger airframer maintenance operation.
“We are also evaluating the feasibility of opening an additional MRO complex at Mattala Rajapaksa International Airport in the south of Sri Lanka. This will most likely be through a joint venture with one or more OEMs or an established MRO looking to expand capacity in Asia,” he said.
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