Colombo to bail out Sri Lankan Airlines

SriLankan Airlines is to be bailed out by the Sri Lankan government which is to takeover unproductive investments made in the airline by the country’s three state banks: Bank of Ceylon, National Savings Bank and Peoples Bank.


Colombo to bail out Sri Lankan Airlines


SriLankan Airlines is to be bailed out by the Sri Lankan government which is to takeover unproductive investments made in the airline by the country’s three state banks: Bank of Ceylon, National Savings Bank and Peoples Bank. “The investments made in SriLankan Airlines by these banks, which have not yielded any returns, will be bought back by the government relieving the banks of such long-term investments,” a report carried by the Daily Mirror said. The government has already infused US$375 million in direct funding to the airline since the beginning of the year.

According to the paper, the national carrier’s debt to the three banks stood at LKR26.8 billion (US$212.4 million) in 2013 and is expected to grow to LKR36.31 billion (US$278.57 million) this year. The move will now allow SriLankan to formulate a viable business plan without having to rely on loan capital as was previously the case and readies the carrier for its fleet renewal plan which will see six A330-300s and four A350- 900s delivered from October onwards.