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April 18, 2024
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It could be the end of the road for SriLankan Airlines, the national carrier of Sri Lanka, Nimal Siripala de Silva, the national Minister for Ports, Shipping, and Aviation, warned on Monday.

The Daily Mirror, a national daily in Sri Lanka, quoted the Minister as saying that the deadline given to potential investors for submitting expressions to partner the national carrier would end on March 5.

The information we have received as of now is that all those who have already expressed interest are planning to withdraw after the Sunday’s flight delay. We will have no option but to ground SriLankan airlines for good in this situation,” the Minister said in a discussion the newspaper said.

The latest statement comes after SriLankan Airlines faced a host of operational issues over the last weekend.

Newspapers quoted SriLankan Airlines officials and Ashok Pathirage, the airline’s Chairman, saying that four flights were delayed last Sunday. At the same time, two flights were delayed as rats were found on them, and two others had technical issues. “We had to spray a chemical to the two aircraft in which rats were found and ground them for one day as per the international standards,” the newspaper quotes the airline’s Chairman as saying.

The plan to privatize SriLankan was announced in May 2022, and in September of the same year, the government put out ‘SriLankan Airlines: Privatization of the National Air Carrier: Investment Opportunity Teaser’. It was proposed to invite Request for Proposals in February 2024 and complete the sale by June 2024. The Minister’s statement suggests the plan is getting stuck, and the airline faces a bleak future.

Earlier media reports in India suggested that several entities and airlines were interested in buying SriLankan Airlines. Reports talked about the Adani group in India, which is into diverse fields, including running airports, and the Tata group, which runs Air India, being interested. This was, however, never confirmed by the Indian companies

Incidentally, this is not the first time that attempts have been made to sell SriLankan Airlines.

In 1998, Emirates Group took a 43 percent stake in Air Lanka (later renamed Sri Lankan Airlines) and signed a 10-year management contract. The agreement helped the airline expand its network, and during that period, SriLankan Airlines became one of the largest foreign operators to India, operating to and from India with over 100 weekly services.

In January 2008, Dubai media quoted Sir Tim Clark, President, Emirates and then Managing Director SriLankan Airlines, saying that Emirates had notified the Sri Lankan government that it would not renew the shareholders’ agreement which expired on March 31, 2008. What led Emirates to make this decision that has never been made public. But financial performance is an obvious one.

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Former Senior Deputy Editor at Business Line (aka The Hindu Business Line)

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