SriLankan Airlines & Mihin Lanka outlook improves following strategic adjustments by new government

Sri Lanka's new government is pursuing strategic changes at SriLankan Airlines and sister low-cost carrier Mihin Lanka aimed at improving their financial position. The new government, which took over in Jan-2015, aims to merge the two state-owned airlines and has suspended all flights from the new international airport at Mattala.

SriLankan and Mihin Lanka have both been highly unprofitable in recent years, posting some of the lowest margins in all of Asia. The new government is not willing to maintain the status quo and seems eager to implement long overdue changes that should make the soon to be merged airline a viable entity.

SriLankan's position has been improving, driven by fleet renewal and membership of oneworld. But the previous strategy still had the airline on a course that likely would have required continued financial support from the government over the long term.