The Cabinet has decided to operate SriLankan Airlines as a viable venture with a partnership, Prime Minister Ranil Wickremesinghe said.
He added that the Government is currently looking for a business partner or an investor.
He stated that if left untouched, the piling up debt of SriLankan Airlines would lead to the collapse of not only the airline but also Sri Lanka’s economy and tourism sector. “That cannot be allowed.”
He stated that the government has decided that SriLankan Airlines cannot pay the debt of US$ 3.2 billion (Rs 460 billion) for Airbuses ordered.
He stated that production has not commenced of 4 planes which had been ordered. “We have informed to halt the production of those aircraft,” he told reporters in Colombo.
The Prime Minister stated that the government was left with two options; to either shut it down or move forward with a private partner.
He stated that this is only one “debt bomb” the government has had to deal with and that it is currently in the process of disarming the bomb by cutting wires one by one so that no one is harmed.
The government had previously said it would seek foreign assistance to rescue Sri Lanka’s loss-making national carrier, as the airline was unable to pay back debt.
A previous management deal with Emirates was ended in 2008 by the former Sri Lankan government headed by Mahinda Rajapaksa.
The beleaguered national carrier has also drawn controversy in recent years after an independent investigator last year found evidence of serious corruption in a $2.3 billion deal to buy Airbus aircraft during Rajapakse’s presidency.
