Sri Lanka’s loss-making carrier seeks foreign partner
Sri Lanka is seeking foreign assistance to rescue its loss-making national carrier, a minister said Thursday, after the government announced the airline was unable to pay back nearly $1 billion in debt.
The country cannot afford to bear SriLankan Airlines’ losses of 128 billion Sri Lankan rupees ($872 million) on top of its massive debt, International Trade Minister Sujeewa Senasinghe told reporters in Colombo.
The airline owes at least $933 million but the government last week said the true figure could be much higher.
“We want to restructure SriLankan (Airlines) with either direct foreign capital or through a management agreement with a foreign airline,” Senasinghe said.
He added that he hopes the process will be completed within “two to three months”.
Official sources said Colombo was in talks with a Middle Eastern carrier to form an agreement that would see the airline hand over control of its management to a foreign carrier.
A previous management deal with Emirates was ended in 2008 by the former Sri Lankan government following a personal disagreement between the flag carrier and then-president Mahinda Rajapakse.
The airline had refused to bump fare-paying business-class passengers to economy class and give their seats to members of Rajapakse’s family, who were returning from London.
An angry Rajapakse removed the Emirates-appointed CEO of SriLankan Airlines from his post and replaced him with his brother-in-law.
The beleaguered national carrier has also drawn controversy in recent years after an independent investigator last year found evidence of serious corruption in a $2.3 billion deal to buy Airbus aircraft during Rajapakse’s presidency.
Rajapakse’s brother-in-law, Nishantha Wickramasinghe, is under investigation for bribery and corruption dating back to when he was the chairman of the national carrier.
A mounting debt crisis of its own has forced the Sri Lankan government to request a bailout for the country from the International Monetary Fund. Media reports have placed the requested bailout amount at $1.5 billion.
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The problem in Sri Lanka is they employ brainless ( memorize the book and pass the exam) idiots to run these establishments.
Look at virgin Atlantic and Easy jet. How successful these companies are. Inventors of these air lines only had primary education.
Another example was CTB. Before it was nationalize it was done by so called “(mudalalies) and maintain by (base unnahayas.)”. The buses ran to a time table and obeyed rules and regulations. When it nationalize buy the government at that time every thing deteriorated beyond belief
We should get business people to run these institutes regardless of there academic qualifications
If I had my own way I employ these (mudalalies) to run these establishments and employ graduates from Universities to clean the toilets. in these places.
‘Round and ’round the cobbler’s bench
The monkey chased the weasel,
The monkey thought ’twas all in fun
Pop! Goes the weasel.
This sgould be made the Central bank song. To bridge the budget gap decentralise the Bank. If those employed by the bank are so enterprising then get them to cobble something lucrative to do thereby contributing to the economy. This would at least help reduce the budget gap by a million or more directly and then indirectly another billion or more by way of morning tea, afternoon too, traveling incentives and meaningless foreign trips.
The problem with the CB is that it is subservient to the `private banks’ and does what CB is supposed to be doing control the flow of foreign exchange. A lot of foriegn exchange leaks through foreign investors speculating on our stock excahnge, and then the gambling dens patronised by indians and pakistanis.
@Ranjith, Well Said.
It’s really sad to see that the government is not taking any efforts to uplift government co-operations.
Rather they intend to advertise negative side and sell it off.
We have seen CB, had sold bonds worth of millions and currently paying installments/ interest to them.
This was the first thing done by Ranil the PM and the Chief of CB along with Ravi the MP.
No one knows that the impact currently appearing to the economy is this. Country bankrupted due to this wrong BOND sale. Officers who pointed this had transferred and pressurized.
Why no one is talking about this?
give it back to emirates they did a good job until our former leader took it back by force
Emirates used our national carrier to go to the other countries using our national flag.
They cheated us for entering to many countries using national flag carrier.
As Niyamasinhalaya says, Emirates used our carrier to gain entry to countries where the Emirates flag was not welcome.
Isn’t that a fantastic and fruitful business strategy? The Emirates made our airlines profitable.
Unfortunately, managers from Sri Lanka cannot think strategically to return a profit to shareholders.
Almost all appointments from top to bottom are political (including the current Board and Managing Director). There is no merit based selection.
Asset acquisitions are made on the basis of commissions received and not on economic principles.
Several ministers have been crying over allegations of massive corruption while a report on corruption in the airline written by a leading anti-corruption activist is gathering dust. The Board of Directors and CEO are most likely enjoying the perks including free business class overseas trips to family and relatives.