Will turbulence at SriLankan Airlines hamper restructuring process ?

• SOEs Restructuring Unit said current challenges in the national carrier not a surprise to the closely knit aviation community 
• Plans are in place to finish restructuring by second quarter of 2024 
• International Finance Corporation (IFC), would come up with its proposal by the end of this year

By Kelum Bandara   

Despite concerns being raised in some quarters whether the current problems at SriLankan Airlines will hamper its restructuring process, a top official said yesterday the global aviation community is well aware of the current challenges confronting the national carrier, and therefore it won’t be a surprise for any potential investor coming forward to invest in it.   

 In addition to its cash flow issues, SriLankan Airlines went through a difficult time in recent times due to flight delays, cancellations and the shortage of pilots. The government, in its plan to revive the State- Owned Enterprises (SOEs), has earmarked the national carrier to be restructured along with bundling or unbundling of its various functions.   

Head of State Owned Enterprises Restructuring Unit Suresh Shah said airlines in the global aviation community know each other well, and the current developments of Sri Lanka’s national carrier is nothing new to them.   

“Therefore, it won’t be a surprise for any potential investor,” he said.   

Addressing a workshop in Colombo to brief the media on the process of restructuring SOEs. He said the government expects to finish the transaction related to the restructuring of SriLankan Airlines by the second quarter of next year.

He said the International Finance Corporation (IFC), the transaction advisor of the airline, would come up with its proposal by the end of this year.   

In a detailed presentation on the restructuring process, his office had identified 85 SOEs that could be divested, 15 to be liquidated and another and the balance to remain under state control out of a total of 130 deemed commercial.   

Sri Lanka currently has more than 400 SOEs operating across 33 economic sectors. He said commercial SOEs will be subjected to divestment except in the following instances where the government is required to engage in commercial activities; to ensure national security, where there is no potential for private participation, where the private sector participates in the supply of an essential service but insufficient in number to ensure competition.   

State Minister Lasantha Alagiyawanna who is the chairperson of the Committee on Public Accounts said he is not opposed to the restructuring process but requested the Unit to make sure the noble objectives in the creation of these institutions are not lost. Also, he said though the privatization of the passenger bus service was well meaning, it had led to a mess today. He said action should be taken to make sure that such a predicament would not happen after the
current process.