The Sri Lankan government has announced plans to partially sell its national carrier Sri Lankan Airlines because it can “no longer afford to inject money” into running the carrier.
Government has decided to sell 49% stake of SriLankan Airlines to a foreign investor keeping 51% majority stake with the government: Aviation Minister Nimal Siripala de Silva / Hiru #LKA #SriLanka— Sri Lanka Tweet (@SriLankaTweet) August 29, 2022
Sri Lanka’s aviation minister Nimal Siripala de Silva said that the government is looking to sell a 49% stake in both SriLankan Airlines’ catering and ground-handling units, according to local news outlet the Deccan Herald. The sale is part of efforts to restructure the state-run carrier. 51% will be retained under state hold.
“This restructuring is essential as the government can no longer afford to inject money into running the airline,” de Silva told local media.
“Annually the government has been providing the airline between $80 billion to $200 billion to run its operations,” he added.
De Silva told local media that revenue from the sale of the catering operation could be used to pay off the airline’s debt, which amounts to $80 million obtained by mortgaging its shares, as well as some other loans.
The aviation minister said that without retaining a 51% stake, Sri Lanka could lose ownership of the companies due to be sold.
“So we can only give 49 %. But if the investors are Sri Lankan nationals, we can go for more. There are many rich people in Sri Lanka, they can come together as a syndicate or with airlines and offer a bid,” de Silva said.
Selling the national carrier was one of the new government’s goals when it assumed office in May 2022.