Sri Lanka will re-start its search for a new partner for state-run SriLankan Airlines within the next three months through public call for offers, with a new leadership on track to cut losses, a top official said.
“The public private partnership unit in the Treasury will request expressions of interest sometime in September or October and we feel as of now we will be in negotiations with one or two interested parties by the first quarter of 2019,” advisor to the finance ministry Mano Tittawella said.
“The new board at SriLankan (Airlines) has now activated a strategic business plan and are confident that by the end of the 2018/19 financial year the airline can record a significantly lesser loss than was recorded when the new board took office in April 2018.”
SriLankan has lost 105 million US dollars in the year to March 2017, new Chairman Ranjith Fernando, a former bank chief and senior public servant said.
Tittawella said there were ‘fairly serious’ parties who have already expressed interest in the airline.
The government has said it will take off legacy debt from the airline, if a new investor can run it without making further losses.
In 2017, TPG, a private equity group pulled out at the last minute after being shortlisted from a call for expressions of interest.
Sri Lankan Airlines has negative net assets, but Sri Lanka is in a strategic location within 3-4 flying hours away from South Asia, Middle East and East Asia, with a route network and airport slots that some investors feel can be used more effectively.
SriLankan made profits when it was managed and part-owned by Emirates from the late 1990s to 2008, when the Middle Eastern carrier exited following a dispute with then President Mahinda Rajapaksa, who appointed his brother-in-law as chairman.