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Sri Lanka halts sale plan for SriLankan Airlines amid unsuitable bids

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Sri Lanka halts sale plan for SriLankan Airlines amid unsuitable bids
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Tom Boon Content Manager | Simple Flying

The Sri Lankan government announced that it will restructure SriLankan Airlines instead of selling a minority stake, following a lack of suitable bids from interested parties. Despite efforts to make the airline more attractive by absorbing some of its debt, the government found none of the proposals satisfactory.

Nimal Siripala de Silva, the Sri Lankan Minister of Ports, Shipping, and Aviation, confirmed on July 4 that the airline would not be sold to either national or foreign entities. He noted that regulations prevent selling more than 49% of SriLankan Airlines to foreign individuals or investors. De Silva mentioned minimal interest in purchasing a stake in the airline, with only six expressions of interest received.

The government had attempted to attract third-party investors by absorbing over $500 million of SriLankan Airlines' debt. Reports from local media outlets EconomyNext and Daily FT indicated that the Ministry of Finance, Economic Stabilization, and National Policies would absorb $512 million in debt. An additional $70 million in revenue from ground handling and catering divisions was expected to improve liquidity.

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According to Daily FT, SriLankan Airlines' short-term liabilities stood at LKR234.5 billion ($769.4 million), while long-term liabilities were LKR154 billion ($505.3 million). De Silva expressed hope for restructuring within six months: "Now we are showing the bride who is looking more attractive. We just have to see who the groom will be."

SriLankan Airlines operates a fleet of 22 aircraft—17 active and five inactive—including various Airbus models such as A320ceo, A320neo, A321neo, A330-200, and A330-300. The airline has not acquired new aircraft since December 2023 when it received an Airbus A320ceo previously operated by Royal Brunei Airlines.

Ch-aviation data indicates four A350-900 aircraft remain in backlog according to Airbus’ latest orders and deliveries filings for May. Former CEO Suren Ratwatte suggested in 2017 that there could be arrangements with Airbus to switch these orders to different aircraft types due to ongoing financial struggles.

Organizations Included in this History
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