The Sri Lankan government has formally decided to initiate the process of divesting the ownership of the loss-making national carrier, SriLankan Airlines, to select investors, a cabinet note released on Tuesday said.
During a cabinet meeting on Monday the decision to restructure the airline's management was taken. A considerable number of shares would be handed over to select investors through a transparent procurement process, the note said.
The State-Owned Enterprises Restructuring Unit has been given the task to study the methodology for the handover and make recommendations to the cabinet for the same, the note added.
The Lankan government in August announced that it was looking to sell a 49 per cent stake in the catering and ground-handling units of the national carrier in order to restructure it.
The government is now looking to hand over the management of the airline in addition to selling its shares, Aviation minister Nirmal Siripala de Silva said.
President Ranil Wickremesinghe, also the finance minister, had stressed the need to restructure loss-making state enterprises.
"I propose that the loss making SriLankan Airlines be privatised," Wickremesinghe said in an address to the nation in May.
In the 20/21 year alone its loss was Rs 45 billion. By March 31, 2021, its total losses were Rs 372 billion.
Even if the government privatised the airline the country will have to bear the loss, he said.
"You should note that this loss has to be borne by the poorest of the poor who have not set foot in an aircraft," the president said in May.
Formed as Air Lanka in 1979, the management control of the airline was sold to the Emirates in 1998.
The national carrier has accumulated a loss of Rs 372 billion since 2009 when the island nation's government acquired back the management control from the Emirates.
