What Sri Lanka can learn from Air India’s lengthy privatisation
Daily Mirror, quoted the Lankan civil aviation minister T D Abeysuriya as saying there were no “suitable suitors" for the country’s national carrier SriLankan Airlines. The minister hinted that the government may shelve its plans to sell the airline, and instead take on some of its debt and restructure it. SriLankan and Sri Lanka find themselves in a position that Air India and the government of India were in not too long ago. For years the Sri Lankan government has been bailing out its national carrier, which has a huge debt burden.
The government has also taken over a $310 million loan guaranteed by the treasury and has infused equity worth 5 billion Sri Lankan rupees ($16.4 million) this year to ease the airline’s cash-flow problems. In July 2022, soon after taking over as Sri Lanka’s president, Ranil Wickremesinghe said in a televised address that the country’s severe economic crisis would be resolved. One of the measures his government would take to stabilise the economy would be to sell the debt-ridden airline, he said.
“It should not be that this loss has to be borne by the poorest of the poor who have not set foot in an aircraft," he said. The national carrier’s losses had run up to 45 billion Sri Lankan rupees ($124 million) in the financial year 2020-21. Its financial performance hasn’t been reported since.
Like its Sri Lankan counterpart, the Indian government had been bailing Air India out for years. The Manmohan Singh government sanctioned equity infusions totalling ₹30,000 crore over nine years starting 2012-13. In 2018, the Narendra Modi government decided to sell a 76% stake in Air India.
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