SriLankan Airlines looking for a strategic partner

Chairman of SriLankan Airlines Ashok Pathirage said the government is looking for a strategic partner for the airline in the wake of economic crisis in the country.

“SriLankan’s primary shareholder, the Government of Sri Lanka, has announced a desire to sell a stake in the airline to a strategic partner. This process will be carried out in a transparent manner, and with the participation of all relevant stakeholders,” Pathirage told Khaleej Times during an interview.

SriLankan Airlines, formerly known as AirLanka, was partially privatised in 1998 when the Emirates Group acquired a 43.63 per cent stake and was awarded a 10-year management contract. The contract lapsed in 2008, leading to the Emiratis’ divestment.

Last month, newly-appointed SriLankan Prime Minister Ranil Wickremesinghe pledged to privatise state-run SriLankan Airlines to offload the costs of restructuring the carrier to private investors rather than the state’s coffers.

‘Economic turbulence’

Pathitage said SriLankan Airlines is confident of surviving ongoing ‘economic turbulence’ in the country and will soon resume its normal flight operations. He said the airline has adopted an effective strategy to minimise the impact of economic crisis and will return to normal operations once the tourism activity picks up in the country.

“We have implemented a number of strategies to mitigate the impact of the economic crisis on the airline. In that, we have sought to reduce our operating cost and redeploy our capacity to more profitable markets wherever possible,” Pathitage said.

SriLankan Airlines was launched in 1979 and it is the largest airline in Sri Lanka by number of aircraft and destinations. The airline operates to more than 100 destinations from its main hub at Bandaranaike International Airport near Colombo.

Banking on international markets

“We continuously review our internal processes and introduce numerous initiatives to improve productivity. SriLankan has also successfully negotiated with key suppliers for concessions in payment terms,” Pathirage said.

Fortunately, he said SriLankan earns a significant percentage of its revenue from international markets, although there is a decline in the number of bookings by tourists to visit Sri Lanka in the wake of the recent travel advisories.

“Some of these travel advisories are now being lifted and we remain optimistic to spread our wings to new horizons in the long run, and once demand for travel to Sri Lanka is restored,” he said.

Rejuvenating tourism

Pathirage said a reasonable level of political stability is currently discernible in the country, with a new government and key cabinet portfolios in place.

“The current economic situation is largely due to an acute shortage of foreign currency in Sri Lanka. Therefore, the government is looking at new avenues to bring in foreign currency and tourism is one key contender, especially with the impending new National Policy for Tourism, which is expected to play a pivotal role in rejuvenating tourism,” he said.

The chairman said SriLankan Airlines is also looking forward to a positive turn in the inbound traffic to the country in summer 2022, and for that to further grow as winter season approaches.

“We are hopeful that the basic necessities and infrastructure would be restored to a great extent before winter, as that will boost passengers’ confidence to spend their holidays in Sri Lanka,” he said.

No domestic flights

Pathirage said SriLankan Airlines does not operate any domestic flights at the moment.

“Our international network provides convenient connections through direct and codeshare flights to major cities across the Middle East and Africa; Europe; Australia; Indian Subcontinent; Southeast Asia; Far East; and North America. However, our current schedule of operations is dynamic and sensitive to alterations in the form of frequency reductions or flight route changes for refueling purposes considering the current economic factors at play,” he said.

In reply to a question about the outlook for the airline, he said the situation will return to normalcy during the summer season.

“We are anticipating some level of normalcy in passenger arrivals to Sri Lanka during this summer peak, and a greater revival in the winter 2022 season. These forecasts are dependent upon a continuation of political stability and the overall efforts towards economic rehabilitation in the months ahead,” he said.

Resilient business model

Pathirage said SriLankan has a resilient business model that will help the airline to come out of the present economic crisis. He said the airline’s revenue has been affected by the economic situation in Sri Lanka and as well as increasing fuel prices, the latter of which is a problem that is common to airlines the world over.

“In spite of these challenges, Sri Lankan authorities have been very supportive and assured SriLankan Airlines to maintain its hub, the Bandaranaike International Airport, well-equipped to facilitate smooth connections for passengers,” he said.

“Being an airline with a large international network has given us some recourse to navigate through the local economic challenges that we have faced up to now. We believe that SriLankan Airlines will be able to offset a portion of its additional costs from the anticipated gradual recovery in the demand for travel to Sri Lanka and the revenue that the airline generates in foreign currency.

“I am confident that SriLankan Airlines and Sri Lanka will emerge out of this situation, more resilient and stronger in the future,” Pathirage said.

Govt looking for a strategic partner

Chairman of SriLankan Airlines Ashok Pathirage said the government is looking for a strategic partner for the airline in the wake of economic crisis in the country.

“SriLankan’s primary shareholder, the Government of Sri Lanka, has announced a desire to sell a stake in the airline to a strategic partner. This process will be carried out in a transparent manner, and with the participation of all relevant stakeholders,” Pathirage said.

SriLankan Airlines, formerly known as AirLanka, was partially privatised in 1998 when the Emirates Group acquired a 43.63 per cent stake and was awarded a 10-year management contract. The contract lapsed in 2008, leading to the Emiratis’ divestment.

Last month, newly-appointed SriLankan Prime Minister Ranil Wickremesinghe pledged to privatise state-run SriLankan Airlines to offload the costs of restructuring the carrier to private investors rather than the state’s coffers.

— muzaffarrizvi@khaleejtimes.com