SriLankan Airlines Could Have A Buyer, But Who Is Supreme Global?

It’s no secret that SriLankan Airlines has been having operational problems. The airline faces multiple challenges, including an aging fleet, debts, flight cancellations due to a lack of aircraft, and others.

The government-run airline has chosen to sell non-controlling shares to attract funding from partners and keep the airline afloat. Only six companies have bid in the process, with Supreme Global being one of them.

SriLankan Airlines’ woes

The once-award-winning airline was among the best performers in Asia during the late 1990s and 2000s, thanks to a partnership with Dubai-based Emirates Airlines. In 1998, Emirates bought a 43.6% stake in the airline and helped rebrand the airline to great success. During this period, the airline increased its route network and fleet.

Photo: SriLankan Airlines

In 2008, Emirates chose not to renew its ten-year contract, citing government interference in its operations. The airline refused to bump fare-paying business class passengers to economy class to accommodate then-president Mahinda Rajapakse’s family on a return flight from London.

In 2008, the airline registered a profit of LKR 9.28 billion (USD 86 million). After the government took over, the airline registered continuous losses until Q3 of 2023, when it made a net profit of $3 million. However, it is too little, too late, as the airline has had to borrow millions just to stay afloat.

The problems mainly stemmed from mismanagement. However, the last few years haven’t been kind to tourism and airline operations. On Easter Sunday in 2019, the country faced multiple terrorist attacks, which severely reduced tourism to the island, which relies on it heavily.

Then followed the COVID-19 pandemic, which affected airlines on a global scale and halted international travel. This essentially shut down operations, save for cargo and relief flights, as the island nation doesn’t have regional flights. The pandemic was followed by a crippling economic crisis in 2022, which resulted in increased costs due to fuel shortages.

Enter Supreme Global

Supreme Global Holdings is a conglomerate owned by R.M. Manivannan. The company is in many industries, including mining, energy trading, real estate and investments. It helped the country by extending a $1.5 billion credit during the recent economic crisis and now seeks to help get SriLankan Airlines back to profitability.

Photo: Soos Jozsef | Shutterstock

The company has joined forces with MMAG Aviation Consortium Sdn Bhd (MAC) to submit a bid for the national carrier. Sri Lanka’s State-Owned Enterprises Restructuring Unit has pre-qualified Supreme Global to bid for the airline.

The Colombo Gazette reported a statement made by MMAG about its intentions behind the bid:

“The board believes that the agreement has potential and would allow MMAG Group to enhance its global footprint in aviation and logistics industry through the collaboration with Supreme Global in Sri Lanka, strengthening both companies’ positions and contributing to the advancement of Sri Lanka’s air cargo landscape, should the acquisition plan materialize.”

MMAG already has a presence in airline cargo operations and has secured contracts from carriers such as MasKargo and Teleport by AirAsia. It will provide freighter aircraft and operation support to establish an airline cargo feeder network.

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