Sri Lanka’s new government has scrapped plans to sell the debt-laden national carrier, SriLankan Airlines, opting instead to restructure the airline for a more profitable future.
“SriLankan Airlines should be an institution that all Sri Lankans can be proud of, and it should remain owned by Sri Lankans,” the airline’s new chairman, Sarath Ganegoda, told TTG Asia. He revealed that President Anura Kumara Dissanayake gave clear instructions to retain the airline under national ownership.
The previous government had initiated bids to partially sell and manage the airline, which has been accumulating losses over the years. Despite reporting an operating profit for the period from April 2022 to March 2023, SriLankan Airlines still carries a staggering US$1.2 billion in debt. Under the previous plan, the government intended to keep 51% ownership while selling 49% to investors. However, none of the six interested parties, some lacking airline management experience, qualified for the next stage of bidding.
Anura Kumara Dissanayake, a left-leaning politician from the National People’s Party, won last month’s presidential election after pledging to halt the sale of state assets, including SriLankan Airlines. Upon assuming office, Dissanayake quickly dismantled a government unit responsible for selling loss-making state entities.
Ganegoda emphasized the airline’s critical role in tourism, contributing to 50% of tourist arrivals. Sri Lanka aims to attract 2.3 million visitors this year, with goals of reaching three million in 2025 and five million by 2030.
Although the sale has been canceled, Ganegoda stated that plans are in place to restructure the airline and implement a sustainable business model. “Some adjustments to our operations are necessary to strengthen the balance sheet,” he added.
Source: TTG Asia
