The total loss of SriLankan Airlines has increased to Rs.12,961 million in the first four months of 2019, while the total debt of Sri Lankan 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. Therefore, it is observed that the GOSL needs to have a significant business restructuring model, owing to the high possibility for the Government to bear the loss, and also due to the high correlation between Aviation industry and the tourism sector in the country, according to mid –year Fiscal Position Report -2019 of the Finance Ministry.
The Government of Sri Lanka (GOSL) is currently in the process of restructuring the SLA, and an Expert Committee was appointed by the President to provide a report of policy recommendations.
Accordingly, the committee has recommended restructuring the SLA through financial, corporate, and human resource restructuring and developing an effective strategic plan. The Cabinet has approved the same on May 5, 2019.
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