National Carrier Sri Lankan Airlines (SLA) currently in the process of restructuring on the directions of Presidential expert committee is nose-diving with no escape in sight.
The losses of the SLA now become unbearable along with the failure to implement the committee recommendations to separate management from ownership and introduce a legal framework and performance monitoring mechanism, official source said.
It has recommended restructuring the SLA through financial, corporate, and human resource restructuring and developing an effective strategic plan.
The Expert Committee recommends SriLankan Airlines to be the holding company for the two subsidiaries—SriLankan Catering and SriLankan Ground Handling—and 49 percent stake in each subsidiary to be divested to a strategic partner as the first phase of partial privatization.
The cash inflow from these divestitures is to be used to settle a component of outstanding debt, in order to create a more favaourable balance sheet for SriLankan.
The second phase of the privatization which the Expert Committee suggests is the divestiture of 49 percent stake in the holding company SriLankan Airlines to a strategic partner where the management of the airline will fall under the purview of this partner with an independent board.
These recommendations were pushed in to the back burner facing the same fate of other presidential committees, officials said.
According to latest Finance Ministry statistics the total loss of SLA has increased to Rs.12,961 million in the first four months of 2019, while the total debt of SLA has exceeded USD 750 million.
Further, the Government is currently bearing USD 375 million and Rs.26,250 million of contingent liabilities piled up since 2014.
This includes the guarantee granted for International Bonds and letters of comfort issued to obtain loans during the BIA closure in 2016.
(LI)