Non-competing airline to manage SriLankan
The Srilankan Airlines restructuring committee report has recommended securing a non-competing airline as a management partner for the loss-making national carrier.
The head of the committee State Minister of Finance Eran Wickremeratne told reporters today that the partner would preferably be a non-competing airline to ensure the development and expansion of SriLankan would not be affected by any conflicting regional business considerations of the partner.
On 7 January President Maithripala Sirisena appointed a 12-member Committee headed by State Minister of Finance Eran Wickramaratne to make recommendations to restructure the national carrier and the report was handed over to the President on Monday.
However, Wickramaratne said that in the event SriLankan fails to attract an airline partner, the report recommends partnering with a non-airline entity.
The committee had even briefly flirted with the idea of closing down the airline altogether to prevent further losses. However, this idea was not pursued as the process of shutting down would be costlier than keeping it running and due to the fact that having a national carrier is closely linked to national pride and identity.
Another recommendation of the report is internal capital generation through the integration of SriLankan Airlines group’s profit making entities such as SriLankan Catering and Ground Handling to mitigate the massive accumulated losses of Srilankan Airlines and Mihin Lanka, which stood at Rs. 145 billion from 2012 to 2017.
Debt restructuring is another main recommendation of the report, as the Government is currently in no position to provide a capital infusion to the struggling airline.
According to Wickremeratne the President has informally accepted the report. However, no formal announcement has been made by the Presidential Secretariat yet on acceptance or implementation.
SriLankan Airlines recently recorded a loss of Rs. 40 billion in the financial year (FY) 2017/2018, the highest annual loss since Emirates’ departure from its management in 2008, and which has come in only the first 9 months.
Photo: Saman Abeysiriwardena