By Hema Senanayake –

Certain things, we the people of Sri Lanka, cannot comprehend. Either complete information is not revealed or is willfully hidden. This is especially true in the case of the business of the SriLankan Airlines. It has been reported that there is a Rs. 340 billion “hole” in Sri Lankan Airlines’ Balance Sheet (refer Daily Ft, 13 June, 2026).

According to the same report of Daily FT, during the 2025/26 financial year, passenger revenue increased to Rs. 265.9 billion from Rs. 234.5 billion, while total net traffic revenue rose to Rs. 333.5 billion from Rs. 298.9 billion. These developments are positive. Then “earnings before interest and tax (EBIT) improved by 13.8% to Rs. 26.4 billion”, or profit before interest and tax amounts to Rs. 26.4 billion. It is an operational profit. So, what would the profit or loss be after interest only? The same report says that “interest expenses declined sharply to Rs. 24.7 billion”, I guess in the same financial year 2025/2026. Then, profit after interest (before tax) must be Rs. 1.7 billion (26.4 – 24.7).

However, after the exchange rate volatility is taken into account, “net loss before tax widening to Rs. 23.2 billion.” This means that profit after interest (before tax) amounted to Rs. 1.7 billion becomes a net loss after interest (before tax) amounting to Rs. 23.2 billion due to foreign exchange rate volatility. We are not convinced.

Whatever the case is, the government has now appointed a high-powered committee to conduct a strategic review and oversee a comprehensive restructuring process aimed at restoring financial sustainability while reducing the burden on public finances. The committee will be chaired by Presidential Adviser on Digital Economy Dr. Hans Wijayasuriya. Other members joining the committee are Senior Presidential Economic Adviser Duminda Hulangamuwa, corporate strategy specialist and Economist Deshal De Mel, investment banker and Asia Securities Chairman Dumith Fernando, representatives of the Finance and Transport Ministries, the airline’s Chairman, legal specialists and aviation experts.

This Committee needs to reveal the truth to the public. Their statements must be backed by financial statements such as a profit and loss account, cash flow statement and finally the balance sheet. Making these financial statements public is particularly important for government-owned enterprises such as Sri Lankan Airlines because they use public resources and can create fiscal risks for the entire economy.

A government enterprise ultimately belongs to the public. If losses are financed through government support, guarantees, or borrowing, taxpayers bear the burden. Published financial statements allow citizens to see how public assets are being managed.

For a country like Sri Lanka, understanding the financial position of major state-owned enterprises is important because losses can significantly affect budget deficits, public debt, foreign exchange needs, etc.

Therefore, accountability to taxpayers can be assured only by allowing them to understand profitability, assess liquidity and cash sustainability and to understand financial strength. This responsibility might not have been mentioned in terms of reference when the committee members of the new committee were appointed, yet this remains as their greatest responsibility.

Usually, the committee can synthesise the best insights from all members of the committee. However, even though when a committee has been appointed, it is often beneficial for each member to prepare an independent report or assessment before the committee reaches a collective conclusion.

This is particularly important to reduce biases. Independent reports make it easier to identify whether conclusions emerged from evidence or from pressure within the committee. This strengthens the credibility of the final findings.

A common criticism of committees to review State Owned Enterprises is that they may fail to provide truly independent professional assessments if members feel compelled to align their findings with the views of the authority that appointed them.

For a public enterprise such as SriLankan Airlines, where serious issues may involve large financial losses, governance failures, public funds, and national economic implications, compiling independent reports from each key committee member can significantly enhance credibility, transparency, and most importantly, public confidence in the review process.