The government is now calling for bids for the divestiture of the debt-ridden national carrier SriLankan Airlines, Minister of Ports, Shipping & Aviation says.

As such, Invitations to Tenders (ITTs) have been published using local and foreign media and websites, according to Minister Nimal Siripala De Silva.

The divestiture is planned to be completed through a two-stage competitive bidding process; RFQ (Request for Qualification) and RFP (Request for Proposals for the Proposed Transaction).

In its notice calling for RFQs, the Finance Ministry noted that the Sri Lankan government is currently in the process of restructuring and/or removing its debts or liabilities which are on the latest financial statements of the airlines.

The bidders can submit prequalification applications between 9 a.m. and 2 p.m. on December 05, and prequalified bidders will be selected on December 19.

Last month, Minister De Silva, joining Ada Derana’s “State of the Nation” program, addressed the reports alleging that the government is planning to sell off the national carrier by the end of 2024. Denying the claims, the Aviation Minister reiterated that the government intends to retain 51% of SriLankan Airlines’ shares and divest the remaining 49%.

He had mentioned that running the national carrier as a joint venture is the solution as SriLankan is in debt. The airline’s total debt amounts to USD 1.2 billion.

Sri Lanka is looking to cut down the losses incurred by state-owned enterprises under a USD 2.9 billion Extended Fund Facility (EFF) from the International Monetary Fund (IMF). In late October, the island nation secured a staff-level agreement on economic policies to conclude the first review of its 48-month EFF-supported program.

The country’s economy is also seeing a gradual recovery from the crisis last year stemmed from record low reserves, sky-rocketing inflation and currency depreciation.

Key highlights about SriLankan Airlines:

• Founded in 1979, SriLankan Airlines operates with a fleet of 24 Airbus A320 and A330 aircraft and has a route network of 126 destinations in 61 countries.

• Before the COVID-19 pandemic, SriLankan Airlines carried around 5 million passengers and 100,000 tons of cargo annually, with 15,000 flights per year.

• The network of international destinations served by SriLankan Airlines has expanded from 37 destinations in 2019 to 39 in 2023. It has extensive landing rights in many Indian cities, with Male, Chennai, London, and Singapore being the largest destinations served, contributing to a combined 25% of the airline’s seats.

• The Air Services Agreement between Sri Lanka and India is highly liberal, allowing SriLankan Airlines-designated carriers unrestricted frequencies to the majority of Indian cities, including metros, along with fifth freedom traffic rights connecting SAARC countries.

• Holder of IATA Operational Safety Audit (IOSA) certification, SriLankan Airlines is a predominantly foreign-exchange-earning business, expected to generate USD 1.1 billion in revenue from airline operations in 2023/2024

• Holder of IATA Safety Audit for Ground Operations (ISAGO) certification, SriLankan Airlines is the sole ground handling operator at Colombo airport, expected to generate USD 60m in revenue in 2023/24

• SriLankan Airlines’ subsidiary “Srilankan Catering” is the exclusive provider of catering services in Sri Lanka, expecting to generate over USD 40m in revenue in 2023/24