fl360aero: The authorities of Sri Lanka plan to sell the national carrier SriLankan Airlines, the buyer may be from Russia, the country’s Minister of Transport Bandula Gunawardana said in an interview with Russian agency RIA Novosti.
“Yes, I can confirm that the Sri Lankan authorities are planning to sell SriLankan Airlines, but a buyer has not yet been found. There are many business opportunities here, and the buyer could very well be any Russian company,” Gunawardana said.
The Minister also noted that the country’s authorities want to find a good buyer for the carrier. He also explained why SriLankan Airlines does not fly to Russia now: because of insurance problems.
“The airline has problems with insurance: as soon as they solve it, they will try to resume flights to Russia. I think this will happen in the future.
On March 30 , Country’s President Ranil Wickremesinghe had said that the country’s resources are wasted on the Ceylon Electricity Board (CEB), Ceylon Petroleum Corporation (CPC), and SriLankan Airlines.
Things were never this bad for the carrier — SriLankan Airlines is the award-winning national carrier of the Island country Sri Lanka. Launched in 1979, and formerly known as Air Ceylon, SriLankan once became a major player in South Asian aviation establishing a reputation for service, comfort, safety, reliability, and punctuality. SriLankan had joined the oneworld airline alliance in 2014 as the first carrier from the Indian Sub-continent.
However, time is tough for the airline business now, there is not an airline in the world over that has not faced difficulties in the wake of Covid-19. Fuel costs have also been a challenge for everyone.
Srilankan Airlines case is unique , as the carrier was emerging from these challenges with a strong return to operations and profit, Sri Lanka was also on the brink of an economic crisis , multiple factors affected the recovery process.
“Fuel has gone from 25% of our costs to over 50% of costs at one stage last year. Obviously, that makes a big difference in a low-margin industry,”says Richard Nuttall, CEO of the airline.
Shortly thereafter, Sri Lanka defaulted on its foreign debt, prompting discussions with the IMF for a package to address the shortage of foreign currency in the country. There is nowhere the airline can borrow from, while its existing loans are at a high-interest rate.
Sri Lanka has also been in talks with Washington-based International Finance Corporation to help re-structure SriLankan Airlines and two other firms listed for divestiture.