The minister emphasized that the government cannot sustain the financial losses incurred by SriLankan Airlines and it would be unfair to continue using taxpayer funds in this manner. To address the situation, the government has already initiated efforts to engage the support of international financial experts, with the aim of conducting the restructuring process in a transparent manner, as part of their commitment to building a stable country.
Addressing the media briefing, Minister Nimal Siripala de Silva said;
“SriLankan Airlines, established as our national carrier many years ago, holds a unique position. While it managed to generate a profit of Rs. 30 million during the period it was under the control of Emirates Airlines, it has struggled to achieve profitability otherwise.
The airline is primarily funded by the taxes of ordinary citizens, including those who have never experienced air travel. We take pride in having our own national airline, but we must question whether the cost associated with maintaining it is justified.
Presently, SriLankan Airlines carries a debt of US$ 1.2 billion. Various organizations, including local state banks, have had to cover outstanding payments for international bonds and leased planes. Additionally, we have accumulated unpaid fuel bills. Operating an airline under such immense debt is unsustainable.
Due to economic challenges, including foreign exchange difficulties, the government is unable to provide financial support for losses as it has done in the past. This approach is no longer equitable, which led to the decision to restructure SriLankan Airlines. The restructuring plan entails the government retaining a 51% share, with the remaining 49% to be offered to another investor.
The proposal for the restructuring process of SriLankan Airlines was submitted to the Cabinet six months ago. Although some profits are generated through ground operations and SriLankan Catering Company, they are insufficient to cover the airline's losses.
Considering the need to sell shares separately and the memorandum presented to the Cabinet, a series of proposals have been forwarded to international financial experts through the Ministry of Finance. We are committed to transparently maximize the benefits of this process.
The completion of the SriLankan Airlines restructuring is anticipated within the next six months. It will then be transferred to the identified investor under conditions that safeguard the rights of employees. Through this initiative, we aspire to enhance the performance of SriLankan Airlines. Failure to undertake this task promptly puts the jobs of approximately 6000 employees at risk.
The airline industry worldwide experienced a severe setback due to the COVID-19 epidemic. Tourists ceased to visit countries, and many nations had to ground their planes. In fact, even Qatar Airways had to lay off 72 pilots. In contrast, our government ensured that our pilots received half their salaries, even when they were not actively flying. This gesture was driven by a humanitarian approach.
Following the COVID-19 epidemic, our country faced immense challenges, including a decline in tourist arrivals. However, under the leadership of President Ranil Wickremesinghe, the government successfully navigated these difficulties and revitalized tourism through the efforts of SriLankan Airlines. As a result, tourists gradually began returning to our country.”
In response to a journalist's query regarding the domestic debt restructuring, the minister said:
“The Opposition has a history of disseminating misleading information. Before having access to accurate details, they have already made predictions today. Their claims about the imminent collapse of the banking system and the potential loss of benefits from the Employees Provident Fund are baseless. Such false advertisements have been widely circulated. However, financial experts assert that there will be no adverse impact on the public. The Domestic Debt Optimization is currently in parliamentary and we will obtain approval with a simple majority.”
