After determining that none of the parties expressing interest in Sri Lankan Airlines (UL, Colombo International) were fit, the Sri Lankan government has chosen to restructure the airline instead of privatizing it.
The aviation minister, Nimal Siripala de Silva, announced the change of heart in a July 3 media statement posted on the Sri Lankan government website. He said that none of the bidders were “worthy.”
The government decided to sell the state-owned carrier for $51% in 2023. The sale was a component of a larger plan for economic reform, which called for the government to divest its holdings in several state-owned businesses. De Silva had previously declared that it was unreasonable to expect taxpayers to continue supporting the airline, which started a reorganization procedure earlier this year with debts totalling around USD 1.2 billion.
Requests for qualification were received in April in response to a formal solicitation process from Dharshaan Elite Investment Holding (Pvt.) Ltd, Sherisha Technologies Private Limited, Treasure Republic Guardians Limited, Hayleys PLC, FITS Aviation (Private) Limited t/a FitsAir (8D, Colombo International), and AirAsia Consulting Sdn. Bhd., the sister company of AirAsia.
This week, de Silva declared, “We are not going to sell Sri Lankan Airlines; instead, we will restructure it.” “Only 49% of Sri Lankan Airlines’ shares may be transferred to (a non-Sri Lankan) corporation, under Sri Lankan legislation. However, there isn’t much of a market for that. There were only six bidders for the airline, and none of them impressed us. A Sri Lankan entrepreneur would still need to prove their ability even if we were to give them this chance.”
The minister made no mention of the Sri Lankan restructuring process that is now in progress or of his intended agenda for restructuring. He did, however, voice some sadness that a capable local investor could not be found to purchase the stake. “The parties should have a strong balance sheet and expertise, as there are the jobs of 6,000 people at stake,” de Silva stated.
SriLankan Airlines operates a fleet of 22 aircraft, comprising seven A320-200s, two A320-200Ns, four A321-200Ns, two A330-200s, and seven A330-300s, and flies to 37 airports across 21 countries, according to ch-aviation PRO airlines statistics.
