Wickremesinghe: The government will absorb the airline’s losses and debts
THE Sri Lankan government is looking for suitable partners to manage its ailing national carrier, SriLankan Airlines, which has an accumulated debt of US$3.5 billion.
A top government source told TTG Asia e-Daily that expressions of interest from interested investors will be called in two weeks. Further details were not given at press time.
Earlier on Tuesday this week, prime minister Ranil Wickremesinghe told reporters that the government would absorb the airline’s losses and debts. Promising to retain the airline’s 7,800 workforce, the government has also said that it will finance and manage the airline until October this year when a viable partner is found.
He said: “If we don’t solve the issue of debt in SriLankan Airlines now, the airline will go bankrupt and our tourism sector will also collapse. This should not be allowed to happen.”
Wickremesinghe added that an order for four new A350 aircraft has also been cancelled in the first cost-cutting step, halting its fleet renewal plans announced earlier this year.
The cabinet of ministers have also agreed to enter into a partnership to manage the airline. This is similar to an earlier arrangement with Emirates, before the Dubai-based carrier exited in 2008, which had a 43.6 per cent stake plus management.
A meeting between Qatar Airways’ CEO Akbar Al Baker and Sri Lankan prime minister Ranil Wickremesinghe in Colombo in January 2016 had triggered speculation that the Doha-based carrier may be eyeing SriLankan Airlines.
According to its last 2014/15 annual report, SriLankan Airlines suffered a loss of 16.3 billion rupees (US$111.8 million), while assets stood at 78.2 billion rupees.
The airline has been struggling since 2008 due to political interference in operations, mismanagement, previously high oil prices and competition, particularly from the Gulf carriers on the lucrative Middle Eastern routes.
