Sri Lanka Invites Bids for Divestment of Loss-Making State Carrier, According to Reuters

Sri Lanka Invites Bids for State-Run SriLankan Airlines Amid Economic Recovery Efforts

COLOMBO (Reuters) – Sri Lanka has called for bids for its state-owned airline, SriLankan Airlines, as part of a strategy to mitigate losses from government-operated enterprises under a $2.9 billion International Monetary Fund (IMF) program.

The South Asian nation recently reached a staff-level agreement with the IMF following the first review of its bailout, although final approval from the IMF’s Executive Board is still pending.

After facing a severe economic crisis last year marked by historic low reserves, rampant inflation, and currency depreciation, Sri Lanka’s economy is on a gradual path to recovery.

SriLankan Airlines, known for being one of the largest loss-making state enterprises, has struggled significantly in recent years due to a drop in tourism resulting from the COVID-19 pandemic and the ongoing economic challenges.

The finance ministry has issued a notice inviting bids for the airline, with a submission deadline set for December 5. The government aims to finalize the sale by June.

As part of the bidding process, the government is also working on restructuring the airline’s debt.

Since 2015, SriLankan Airlines has accumulated operational losses totaling $575 million. However, recent financial disclosures indicate that the airline achieved an operational profit of $93 million this year.

The International Finance Corporation (IFC), a member of the World Bank Group, is advising on the transaction.

Currently, SriLankan Airlines operates a fleet of Airbus aircraft serving a global network that includes 111 destinations across 56 countries.