Sri Lanka’s national carrier, SriLankan Airlines, is undergoing a significant restructuring effort to attract new investors. The government aims to make the airline more appealing by absorbing a substantial portion of its debt and implementing cost-cutting measures.
The government plans to absorb $512 million of the airline’s debt, hoping to reduce the overall burden to around $500 million. This move is intended to make the airline financially more attractive to potential investors. Additionally, the government expects to generate further revenue through ground-handling and catering services, further improving the airline’s financial standing.
Despite claims from the airline’s current management about their ability to turn things around, the government emphasizes the urgency of attracting an investor. Minister Nimal Siripala De Silva expressed his belief that waiting any longer is not an option and that an investor is crucial for the airline’s future success.
The restructuring process aims to achieve several key objectives. First, it seeks to safeguard the interests of Sri Lankan taxpayers by ensuring the government recovers the funds used to absorb debt through the sale of shares. Second, it prioritizes protecting jobs during this interim period. Finally, the restructuring aims to stem the airline’s current decline, which has been marked by flight delays, cancellations, and additional costs.
The government is confident that the restructuring process will yield positive results, generating over $500 million to be directed back to the treasury. Minister De Silva emphasized the government’s commitment to turning around the airline, mirroring the nation’s economic recovery efforts.
The deadline for potential investors to express their interest in SriLankan Airlines has been extended to April 22nd, allowing more time for interested parties to participate. This move signifies the government’s ongoing commitment to finding a suitable investor and ensuring the long-term success of the national carrier.