Chairman of Sri Lanka’s National People’s Power (NPP) Economic Council has hosed down media reports that the new government intends walk away from plans to sell a stake in SriLankan Airlines (UL, Colombo International), having decided the carrier is too important to be sold off or divested.
Earlier this year, the administration of Ranil Wickremesinghe got as far as calling for expressions of interest in the loss-making airline but abandoned that program after suitable buyers failed to materialise. It then said it would pursue alternative divestment strategies to be disclosed after the September 21, 2024, presidential election.
The 2024 Sri Lankan presidential election, held last month, saw the left-leaning politician Anura Kumara Dissanayake become the country’s 10th president, defeating Wickremesinghe, who won just 17% of the vote. Dissanayake says he will honour the USD2.9 billion deal with the International Monetary Fund (IMF) to bail Sri Lanka out of the economic crisis, but he also wants to reduce the impact of austerity measures on the country’s poorest citizens. He is also generally opposed to selling state-owned assets.
Sri Lanka’s Ministry of Finance was overseeing the SriLankan Airlines divesture as part of “implementing deep economic reforms” across its multiple state-owned enterprises. The ministry had retained World Bank subsidiary International Finance Corporation (IFC) and multi-national financial advisory firm Lazard to assist in the sale process. However, in July 2024, then Aviation Minister Nimal Siripala de Silva said none of the six entities lodging expressions of interest were “worthy,” referencing their lack of aviation experience and financial resources needed to reboot the carrier.
Over the weekend, a Colombo-based outlet reported NPP Economic Council chairman Anil Jayantha saying the new government would not sell any stake in SriLankan Airlines. However, on October 1, Jayantha clarified his comments, saying no drastic action would be taken and a decision likely to be deferred until next year. ch-aviation understands that the government has yet to formally advise SriLankan Airlines of its plans and will meet with the IMF in the near future. Abandoning divestment plans also means the Sri Lankan administration will need to be briefed on the airline’s future financing requirements.
SriLankan Airlines flies to 37 airports in 21 countries with a fleet of 22 aircraft, including seven A320-200s, two A320-200Ns, four A321-200Ns, two A330-200s, and seven A330-300s.