Ports, Shipping and Aviation Minister Nimal Siripala de Silva in discussion with SriLankan Airlines trade union representatives Says it will be carried out in a transparent manner with Cabinet and Parliamentary approvals
Urges local investors to come forward; assures job security to employees
While urging the local investors to come forward, the government plans to complete the restructuring process of loss-making SriLankan Airlines in a transparent manner within this year.
In a recent meeting with trade unions attached to the national carrier, Ports, Shipping and Aviation Minister Nimal Siripala de Silva stressed that all stakeholders must agree in principle the need to restructure the airline, as it would be a great unjust to the citizens if the government continues to fund the loss-making airline in the current context with taxpayer money.
In 2021, SriLankan reported a staggering loss of Rs.171 billion, bringing its accumulated loss to a whopping Rs.542 billion. As of March 31, 2022, SriLankan’s interest-bearing loans had increased to Rs.372 billion and its unpaid bills rose to Rs.183 billion, including bills payable to Ceylon Petroleum Corporation amounting to Rs.89 billion, bringing the total liabilities to a record Rs.618 billion.
The minister pointed out that the government has already exhausted a large amount of public funds, which could have been invested in other crucial areas to maintain SriLankan, which has turned to end up as another “white elephant”.
Last year, the government approved the reissuance of all Letters of Comfort amounting to US $ 205.4 million and Rs.27.6 billion, in favour of two state banks to continue SriLankan’s operations, despite the financial crisis.
“The uneconomical operations of SriLankan Airlines and losses cannot be absorbed either to the limited fiscal space or state banking sector, hindering the productive private sector credit growth,” the Finance Ministry recently noted.
The Finance Ministry has recommended an immediate transformation for the airline to clear up its liabilities through a proper business restructuring by selecting a suitable business partner.
Speaking at the occasion, Sri Lanka Nidhahas Sevaka Sangamaya – SriLankan Airlines branch (SLNSS) President Janaka Wijayapathiratne accepted the urgent requirement to restructure the airline. However, he blamed the politicians and top management for driving the national carrier to bankruptcy.
He urged the minister to handover the management of the airline to a local investor.
In responding, the minister encouraged the local investors to come forward with their proposals and noted that the government would welcome if a local investor comes forward to take over the management of the airline.
He assured the trade union representatives that the restructuring of the national carrier would be carried out in a transparent manner with the approval of the Cabinet of Ministers and Parliament and with trade union inputs.
In the restructuring process, he said that the airline’s trained and efficient workforce would be regarded as an asset to the company in particular, given that the airline does not have any of its own aircraft.
He further assured that no employee would be forced to resign and they would be compensated under the golden handshake method, if they are to lose their employment.
The minister said he has already held discussions with the board of directors of SriLankan on restructuring.
The board is scheduled to submit a detailed report to the minister on potential restructuring models and challenges within two weeks. After receiving the report, the minister will be seeking the inputs from trade unions on the restructuring.
Daily Mirror