Newly appointed Prime Minister Ranil Wickremesinghe has pledged to privatise loss-making SriLankan Airlines (UL, Colombo International) to offload the costs of restructuring the carrier to private investors rather than the state's coffers.
Wickremesinghe pointed out in a televised nationwide address that the flag carrier lost LKR45 billion Sri Lankan rupees (USD125 million) in the financial year ended on March 31, 2021, while its accumulated loss through March 31, 2022, totalled LKR372 billion (USD1.04 billion).
"Even if we privatise SriLankan Airlines, this is a loss that we must bear. You must be aware that this is a loss that must be borne even by the poor people of this country who have never stepped on an airplane," Wickremesinghe said.
He did not outline any specific steps that the government would take to sell the state-owned airline.
SriLankan Airlines, then still known as AirLanka, was partially privatised in 1998 when the Emirates Group acquired a 43.63% stake and was awarded a ten-year management contract. The contract lapsed in 2008, leading to the Emiratis' divestment and the renationalisation of the carrier in 2010. It has remained wholly state-owned since then, despite occasional attempts at re-privatisation.
The new PM took office amidst a deep economic crisis ravaging Sri Lanka. After months of fuel and goods shortages, rampant inflation, and default on the country's foreign debt, violent clashes culminated in the stepping down of Wickremesinghe's predecessor Mahinda Rajapaksa on May 9. Rajapaksa's brother, Gotabaya, is the current President of Sri Lanka, although he faces a non-binding vote of no confidence in parliament in the coming days. In the address, he conceded that the coming months would be extremely difficult for the island's residents with power cuts, fuel shortages, and financial hardships expected.
