Sri Lanka has failed to attract bids from international airlines to privatise its loss-making flag carrier, but will continue its efforts to salvage the company, a minister said yesterday.
The government received nine offers for Sri Lankan but none were from a major international airline operator, State Enterprise Development Minister Kabir Hashim said.
“We are still evaluating the proposals, but we are keen to have an airline of international repute that can also bring in traffic that will help our tourism industry,” the minister told reporters in Colombo.
Of the proposals received, the government has shortlisted three, including one from TPG, a San Francisco-based private equity firm.
Hashim is heading a new three-member ministerial panel to decide the future of Sri Lankan which has debts and accumulated losses of over $2bn.
“The new committee was appointed to explore other options,” the minister said. “We don’t know yet what those options are, but we want to get a good international (airline) partner very soon.”
Official sources said the government was keen to attract a big operator from the Middle East or Asia.
Late last year, Sri Lankan cancelled the previous government’s order to lease four brand new Airbus A350-900 long-haul aircraft after paying a penalty of $115mn to aircraft leasing giant
AerCap.
Minister Hashim said a separate order of four Airbus A350-900 planes will also be cancelled. Those were scheduled to be delivered after 2020.
Former president Mahinda Rajapakse ordered all eight planes as part of a $2.3bn re-fleeting programme for the airline, which is now being investigated for corruption.
Sri Lankan was profitable before Rajapakse cancelled a management agreement with Emirates in 2008 following a personal dispute.
The carrier had refused to bump fare-paying passengers and give their seats to Rajapakse’s family members.
An angry Rajapakse removed the Emirates-appointed CEO of Sri Lankan from the post and replaced him with his own brother-in-law, who had no airline experience, and is now under investigation for corruption.
