The Sri Lankan government hopes to secure financing from local investors to restructure SriLankan Airlines (UL, Colombo International) "in a transparent manner" by the end of 2022, Ports, Shipping and Aviation Minister Nimal Siripala de Silva told trade unions.
De Silva said that considering the giant losses suffered by the state-owned carrier and the country's deep financial crisis, it was no longer prudent for the government to inject funds into the airline. SriLankan Airlines posted a LKR171 billion Sri Lankan rupees (USD476 million) loss in the financial year ending March 2021, while its accumulated losses have reached LKR542 billion (USD1.5 billion). The carrier has total liabilities of LKR618 billion (USD1.7 billion).
While privatisation is seen as the only way forward, de Silva emphasised to the unions that it would not be conducted to the detriment of the workers. He stressed that there would be no forced redundancies, and even if some employees do lose their jobs, they would receive substantial severance pay or "a golden handshake". The government will also seek union input as the privatisation and restructuring of the carrier continues.
The privatisation of the loss-making carrier was one of the key pledges of Prime Minister Ranil Wickremesinghe, who took office in mid-May 2022 amidst violent unrest and the economic collapse of the island country. The previous management explicitly identified overstaffing and rigid labour contracts as one of the factors contributing to the airline's calamitous state.
