Mattala Airport losses narrow 15% in 2017 on reduced exchange losses

• Partial closure of BIA during first 4 months helps revenue
• But average daily loss for first two months of 2018 tops Rs.57mn
• Total losses stand at Rs 19.4bn up to February this year

By Nishel Fernando 

The losses of Sri Lanka’s Mattala Rajapaksa International Airport (MRIA) have decreased by 15 percent to Rs.3.39 billion in 2017 against Rs.3.9 billion recorded in 2016, mainly due to the slowing down of the rupee depreciation against the US dollar, the unaudited accounts of the Airport & Aviation Services (Sri Lanka) Limited showed. 

“The reduction of loesses was mainly due to the reduced exchange loss in 2017 compared to 2016 as the rupee depreciation against US dollar moderately came down in 2017” an Airport & Aviation Services (Sri Lanka) Limited official, who requested anonymity, told Mirror Business.
The rupee only depreciated by 2.5 percent against the US dollar compared to 3.9 percent in 2016.

However, during the first two months of this year, MRIA incurred a net loss of Rs.733 million recording Rs.57.45 million average loss per day against Rs.9.2 million average daily loss in 2017. 

The total losses of MRIA amounted to approximately Rs 19.4 billion since the beginning of operations up to February, 2018. 

MRIA saw its revenue increasing by 59.1 percent to Rs.77.5 million in 2017 from Rs.48.7 million in 2016 due to the partial closure of the Bandaranaike International Airport (BIA) during the first four months of 2017 due to re-laying of a track. 

However, the surge of MRIA revenue only lasted during the renovation period of the BIA track.

The revenue of MRIA during the first two months of 2018 was at Rs 4.5 million while the operational expenditure was at Rs.393 million. The total expenditure, including interest payments for the two months, stood at Rs.737 million.  

MRIA handled 48,810 passengers during the first four months of 2017, which was 35 times of the 1,395 passengers it had handled during the corresponding period in 2016. 

The official from the Airport & Aviation Services (Sri Lanka) Limited said MRIA incurred its highest loss of Rs.5.8 billion in 2015, which was mainly due the drastic devaluation of the rupee against the U.S. dollar, which contributed for almost Rs.3 billion out of the Rs.5.8 billion.

MRIA was dubbed as the world’s emptiest international airport by Forbes in 2016.

The airport has a 12,000 square metre terminal building, 12 check-in counters, two gates, a runway long enough to handle the largest commercial jets, and capacity for one million passengers per year. 

However, there’s only one international airline (Fly Dubai) and a few unscheduled domestic flights currently operating at MRIA.

It was constructed at a cost of US $209 million, out of which US $190 million came in the form of loans from Chinese Exim Bank  and the rest was funded by the Airport & Aviation Services (Sri Lanka) Limited. The official noted that the loan repayment that began in 2015 will continue until 2025. 

The Indian government has expressed their interest to develop MRIA as joint venture with the Sri Lankan government. According to the proposal submitted by the Indian government, India has proposed an equity ratio of 70:30 percent for a period of 40 years and is willing to invest US $205 million.

The Civil Aviation Authority of Sri Lanka has studied the proposal and has handed over their observations to Cabinet Appointed Negotiation Committee (CANC).

The negotiation was set to resume at the end of March in Sri Lanka, according to an official from the Ministry of transport and Civil Aviation.