Sri Lanka’s loss-making carrier seeks foreign partner

Colombo / AFP

Sri Lanka is seeking foreign assistance to rescue its loss-making national carrier, a minister said, after the government announced the airline was unable to pay back nearly $1 billion in debt.
The airline owes at least $933 million but the government last week said the true figure could be much higher.
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.
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.
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.
“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”. 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.
SriLankan Airlines is the flag carrier of Sri Lanka and it was launched in 1979 as Air Lanka, following the termination of operations of the original Sri Lankan flag carrier Air Ceylon.