The Government of Sri Lanka has approved a loan of LKR13.2 billion (USD86 million) to be paid to SriLankan Airlines (UL, Colombo Int'l) as it struggles to find a new owner, reports The Sunday Times. The cash, provided by the Bank of Ceylon and the People's Bank, will keep the airline going while the Board attempts to turn it around.

SriLankan Airlines has been courting investors for some time after suffering crippling losses. Earlier this year, US-based investment firm Texas Pacific Group (TPG) was in talks to take over 49% of the carrier, but pulled out after due diligence revealed the extent of the airline's debts. In August, a Japanese consortium of ANA - All Nippon Airways (NH, Tokyo Haneda) and JAL - Japan Airlines (JL, Tokyo Haneda) was linked to a potential deal, but no official information has been released.

With progress stalled on both improving the airline's operational performance and finding a strategic partner, State Enterprise Development Minister Kabir Hashim petitioned the government to provide the loan. A restructuring plan is currently being reviewed by a government committee, in the hopes of getting the airline to breakeven point in the next few years.

SriLankan's operational losses widened to LKR28.14 billion (USD183.5 million) in 2016 from LKR12.62 billion (USD82 million) in 2015 although this has been attributed to its absorption of loss-making low-fare airline, Mihin Lanka (MJ, Colombo Int'l). SriLankan's operational losses for the first four months of 2017 are said to stand at LKR9.52 billion (USD62 million).