Gov’t Pushes Governance Reform at SriLankan Airlines

The Sri Lankan government plans to introduce the Public Commercial Businesses Bill to improve governance, financial transparency, and accountability at state-owned enterprises, including SriLankan Airlines. The Cabinet has endorsed the bill, which seeks to eliminate Treasury guarantees and remove political appointments from boards, replacing them with industry experts.

The reform comes amid pressure from the International Monetary Fund (IMF), which has urged Sri Lanka to accelerate the debt resolution process for the loss-making national carrier. SriLankan Airlines currently holds approximately USD 1.2 billion in debt.

The proposed legislation is part of a broader government strategy to enhance state enterprise efficiency and transparency. Although there were earlier plans to privatize SriLankan Airlines, the new administration canceled the process in mid-2024 after several expressions of interest had been submitted. The current government has reiterated that the airline will remain state-owned, citing its strategic importance to the country’s tourism-driven economy.

Civil Aviation Minister Bimal Rathnayake confirmed that the government is committed to funding the airline’s operations and fleet expansion while continuing to restructure its financial liabilities.

At a press conference on April 29, IMF Mission Chief Evan Papageorgiou acknowledged the government’s steps to improve SriLankan Airlines’ financial standing, including allocating LKR 20 billion (USD 66.8 million) in the national budget for debt repayment and hiring a financial advisor for bond restructuring. However, he urged faster action to fully resolve the airline’s outstanding issues.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com