Business

President yet to act on SriLankan report

Madhusha Thavapalakumar

President Maithripala Sirisena is yet to officially respond to the proposals of the report submitted by the restructuring committee he hurriedly appointed for SriLankan Airlines, more than two weeks after it was handed over to him.

On 8 January, Sirisena appointed a 12-member committee headed by State Minister of Finance Eran Wickramaratne to make recommendations for a restructuring strategy for loss-making SriLankan Airlines within a mere two weeks.

However, SriLankan Airlines Chairman G.S. Vithanage told The Sunday Morning Business that the board had not heard from President Sirisena.

“We are waiting for a directive from the President. Until that, we cannot do anything.”

He added that SriLankan is in dire need of directives from higher authorities to ensure the continuity of its operations.

He further stated that SriLankan does not have any issues with the proposals submitted to the President in the report.

“Whatever the proposal made, it has been approved by the board. Internally, we do not have any problems but the only thing is we need some directives from the top levels,” he added.

Following the evaluation of already developed restructuring plans of the SriLankan Airlines for two weeks, the 12-member restructuring committee officially handed over its report to President Sirisena on 28 January.

Wickremaratne said the proposals were informally approved by the President. However, he too confirmed to The Sunday Morning Business on Friday (8) that he was yet to receive an official response from the President.

At the press briefing, Wickremaratne said that the President assured the airlines would be gazetted under a ministry the following week, as it has been ministry-less since 30 December, 2018.

Before this, SriLankan Airlines was under the purview of the Ministry of Transport and Civil Aviation.

Vithanage said that SriLankan required a capital infusion to ensure its smooth functioning, but that it had not been received so far.

“Still, we have not got any capital infusion. It is very important now; otherwise we cannot run this organisation.”

However, he said that capital injection is a short-term measure and emphasised the importance of authorities providing proper directives as a long-term measure.

Meanwhile, convening a press conference late last month, State Minister Wickremaratne briefed the recommendations and proposals which are included in the report submitted to the President.

On the same day of this press conference, the committee also briefed proposals to the board of SriLankan Airlines.

According to Wickremaratne, the committee made recommendations on a policy level due to the limited time period given to them.

However, they have recommended several options to restructure the loss-making airlines including debt restructuring and internal capital generation. According to the committee, this proposal could attract a strategic partner, but they have left it up to the board to decide.

Wickremaratne stated that SriLankan is open to a strategic partner and also welcomed investment into SriLankan Catering, ground handling, and the engineering division. Accordingly, the strategic partner would get a 49% stake in the national carrier.

Unlike the airlines, SriLankan Catering and ground handling are profit-making entities and investment into these segments could improve profits and allow for regional expansion.