Despite initial expectations of Mihin Lanka being a budget carrier with a potential to be profitable, the financial performance of the airline since inception has been “far below expectation” the company admitted in a statement to the media last week.
Confirming media reports Mihin Lanka said that they had never recorded an annual profit since inception and the accumulated loss as at 31st March 2016 was LKR 17.27 Billion.
“The financial performance for the current year has followed the same trend of losses. For the six month period ending September 30, 2016, the airline reported a net loss of LKR 181 million and for the remainder of the Financial Year it was budgeted to lose a further LKR 1 Billion,” the statement revealed.
Accordingly, SriLankan Airlines has taken over the services to Mihin Lanka destinations effective October 30, 2016. Of the nearly 300 employees of Mihin Lanka, 130 employees have already been absorbed by SriLankan Airlines effective November 2016. The remaining employees have been offered a VRS scheme in accordance with Government specified guidelines.
In view of the ongoing GoSL led project to find a suitable partner for SriLankan Airlines to form a Public- Private Partnership (PPP), it has been decided that Mihin Lanka will continue to have its Air Operator Certificate (AOC) until March 31, 2017.