The Sri Lankan government this week invited bids from the global industry to run and manage the island’s national carrier, SriLankan Airlines, which has been suffering accumulated losses over the years.
While the airline has reported an operating profit for the period April 2022 to end March 2023, its accumulated debt is US$1.2 billion.
The authorities are banking on enticing investors with the intention of creating Colombo, the capital of Sri Lanka, as a regional (South Asia) travel hub with a huge focus on operations to and from India and other regional cities.
For over four decades, the airline has been operating as a full service carrier covering Europe, the Middle East, Indian sub-continent, South-east Asia, the Far East and Australia.
In advertisements carried on local and foreign media on Tuesday, the government announced Invitations to Tenders (ITTs). The divestiture is planned to be completed through a two-stage competitive bidding process – namely RFQ (Request for Qualification) and RFP (Request for Proposals for the Proposed Transaction). World Bank-affiliate, the International Finance Corporation is the financial advisor of this process.
Founded in 1979, SriLankan Airlines operates a fleet of 24 Airbus A320 and A330 aircraft and has a route network of 126 destinations in 61 countries.
The part sale (the government will retain 51 per cent control while offering investors a 49 per cent state) which has been talked of for several months has attracted interest particularly from Indian airline operators, industry sources said.
“It is good that the government is inviting private sector engagement in the airline which would help the airline grow further with its strong links to India,” one industry source said. SriLankan Airlines is the biggest foreign operator in the Indian market operating multiple daily and weekly flights to Indian destinations. India is also Sri Lanka’s biggest tourism source market.
This is the third time the airline is seeking a foreign partner, having expertise from Singapore Airlines at the inception followed by a partnership during 1998 to mid-2008 with Emirates.
The 2024 edition of Arabian Travel Market (ATM) will return to Dubai from May 6 to 9 with the theme, Transforming Travel Through Entrepreneurship.
Attendees will consider how the segments of leisure, business, luxury and MICE are driving economic growth and sustainable development across destinations, hospitality and aviation, creating fresh opportunities for entrepreneurs and investors from across the Middle East and beyond.
Danielle Curtis, ATM’s exhibition director, said: “Holidaymakers represent a crucial focus for the Middle East’s travel community, but leisure is only one component of a much bigger picture. Business, luxury and MICE travel are also making significant contributions to economic growth and sustainable development, with Statista predicting a global market volume of more than US$1 trillion by 2027.
“It is therefore no surprise that the travel and tourism sector is creating unprecedented opportunities for entrepreneurs and investors, thousands of whom will showcase their innovations, exchange ideas and forge new partnerships at ATM 2024,” she added.
The travel and tourism sector is on course to contribute US$49.18 billion to the UAE economy alone in 2023, according to figures released by the WTTC. This figure is predicted to reach US$64.12 billion by 2033, accounting for an impressive 10.2 per cent of the nation’s GDP.
As the Middle East’s travel and tourism industry continues to mature, it is expected to create new jobs and income for millions of people from across the globe. The UAE Government, for instance, estimates that the country’s travel and tourism market will support 770,000 jobs by 2027. At the same time, the sector is expected to generate ever-increasing revenues for regional economies – Gulf travellers spending approximately 6.5 times more than tourists from other parts of the world, according to the UN Tourism.
Sustainable development will represent another key focus at ATM 2024. Dubai’s Department for Economy and Tourism (DET), ATM’s Destination Partner, will showcase its ongoing efforts to protect the environment and secure a greener and more sustainable future for the emirate.