Sri Lanka Opens Bidding for State-owned SriLankan Airlines Amidst IMF Program
Sri Lanka is actively seeking bids for its state-owned airline, SriLankan Airlines, as part of its commitment to diminish losses from government-held enterprises. This move is in line with the conditions of a $2.9 billion financial program brokered with the International Monetary Fund (IMF).
The nation recently achieved a staff-level agreement with the IMF, marking a positive step in its ongoing review process. However, official approval from the IMF’s Executive Board is still pending.
Last year’s economic crisis, spurred by record-low reserves, catapulted the nation into severe inflation and a depreciating currency. Nonetheless, the economy is showing signs of recovery.
The global COVID-19 pandemic, coupled with the economic downturn, has notably affected SriLankan Airlines. These challenges have led to the airline becoming one of the largest loss-inducing public enterprises in the country. The downturn in tourism has significantly contributed to these losses.
Sri Lanka’s finance ministry has set a bid deadline for the airline of December 5th and hopes to finalize the sale by next June. As per the bid announcement, the government is currently working on reconfiguring the airline’s existing debt.
Financial disclosures, part of the bid package, reveal the airline’s operational losses since 2015 amounted to $575 million. In a hopeful turnaround, the airline reported an operational profit of $93 million this year.
Guiding this transaction is the International Finance Corporation (IFC), a principal entity of the World Bank Group.
SriLankan Airlines, which operates a fleet primarily consisting of Airbus 22 aircraft, and no orders, services 111 destinations across 56 countries worldwide. As of December 2022, the breakdown of their aircraft is as follows:
- A320-200: 5 in service, the 4R-ABO in the Oneworld alliance livery.
- A320neo: 2 in service.
- A321neo: 4 in service.
- A330-200: 4, one in Oneworld livery. However, these aircraft are set to be phased out as the airline continues to modernize its fleet.
- A330-300: 7 in service.
reuters.com, SriLankan Airlines