The Sri Lankan government has abandoned its plans to privatize SriLankan Airlines (UL, Colombo International) and will instead pursue a restructuring strategy, citing concerns over the suitability of interested parties.
In a statement released on July 3, Sri Lanka’s aviation minister, Nimal Siripala de Silva, confirmed the decision, noting that none of the bidding entities met the government’s criteria. The initial decision to sell a 51% stake in the state-owned carrier in 2023 was part of a broader economic reform agenda aimed at reducing the government’s ownership in various state-owned enterprises.
“The decision to restructure rather than sell SriLankan Airlines comes after evaluating bids from several interested parties, none of which were deemed suitable,” de Silva stated. The airline has been undergoing restructuring efforts since earlier this decade, grappling with debts amounting to approximately USD1.2 billion.
In response to the solicitation process, bids were submitted by entities including AirAsia Consulting Sdn. Bhd., Dharshaan Elite Investment Holding (Pvt.) Ltd, FitsAir (8D, Colombo International), Sherisha Technologies Private Limited, Treasure Republic Guardians Limited, and Hayleys PLC.
“We have decided not to proceed with the sale but to focus on restructuring SriLankan Airlines,” de Silva emphasized, highlighting legal constraints limiting foreign ownership to 49% under Sri Lankan law.
Despite expressing regret over the lack of a viable local investor, de Silva underscored the importance of securing a robust partner capable of sustaining the airline’s operations and safeguarding the jobs of its 6,000 employees.
SriLankan Airlines currently operates a fleet of 22 aircraft, including models such as the A320-200, A321-200N, and A330-300, serving 37 airports across 21 countries, according to data from ch-aviation PRO airlines.
