COLOMBO, July 7, 2025 — Sri Lanka has launched a sweeping presidential investigation into allegations of fraud, corruption, and irregularities at SriLankan Airlines and Airport and Aviation Services (Sri Lanka) Ltd, marking the most comprehensive probe yet into the country’s troubled flag carrier.
The Cabinet-approved Special Presidential Investigation Committee, announced on July 2, will be chaired by former Auditor General H.M. Gamini Wijesinghe and tasked with reviewing suspected irregularities between 2010 and 2025. The inquiry comes amid mounting losses at the national carrier, raising fresh questions about oversight, accountability, and the future of the state-owned airline.
“The investigation is expected to identify the root causes of the airline’s continuing losses, with a broader objective of transforming it into a viable, efficient, and advanced state-owned enterprise (SOE),” said Cabinet Spokesman and Minister Dr. Nalinda Jayatissa during the announcement.
From Profit to Freefall
When Emirates ended its management role at SriLankan Airlines in 2008, the carrier posted an accumulated profit of Rs. 9.288 billion. Since then, the airline has seen a marked deterioration in performance. During 2009, the company recorded a net loss of Rs. 9.3 billion wiping off its accumulated profits. Between 2008 and 2015, it recorded cumulative losses of Rs. 128.238 billion.
After briefly turning a corner in FY2022–23 with a net profit of Rs. 3.8 billion, the airline fell back into the red in the most recent fiscal year. According to preliminary figures, SriLankan Airlines posted a loss of Rs. 8.4 billion for FY2023–24, driven by weaker yields, rising costs, and underperforming routes.
As of March 2025, 31 of its 45 international routes were loss-making, according to official testimony to Parliament. The airline is also grappling with liabilities nearing US$978 million, underscoring deep financial instability.
A Test for Reform
Once slated for privatization, SriLankan Airlines is now undergoing a state-led restructuring. The government shelved divestment plans, opting instead for a new governance framework aimed at improving efficiency while retaining public ownership.
The outcome of the current probe could shape the direction of those reforms. The committee’s recommendations are expected to address not only past misconduct but also future safeguards against political meddling and operational inefficiency.
With Sri Lanka facing a precarious fiscal position and increased public scrutiny of state-owned enterprises, the airline’s fate has become a litmus test for the government’s broader reform agenda.
For now, all eyes are on the committee and whether its findings will translate into real accountability and lasting structural reform.
Note: Currency figures are shown in Sri Lankan Rupees (LKR). For reference, the exchange rate in July 2025 is approximately LKR 300 = USD 1.
Image: Pexels/Jeffry S.S
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