Adani, Emirates, Tata interested in SriLankan Airlines: Report

8 September 2023 01:41 pm – 0      – 471

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The Sri Lankan government is actively exploring options for the privatisation of SriLankan Airlines (UL, Colombo International) and is engaging in talks with various private entities and airlines, according to a report by ch-aviation. Among the potential investors are well-known names such as Emirates (EK, Dubai International), Tata Sons, and the Adani Group.

Veeraperumal Ravindran, the carrier’s regional manager for India, Bangladesh, and Nepal, revealed this information during an interview with The New Indian Express, aimed at increasing the airline’s presence in the Indian state of Kerala.

SriLankan Airlines plans to enhance its services between Colombo and Thiruvananthapuram during the upcoming winter schedules, increasing from six times to seven times weekly. Additionally, it intends to maintain its 10 times weekly frequencies to Kochi International and explore new flight routes to Kozhikode due to available aircraft. According to the report, Ravindran noted a significant increase in traffic from India to Sri Lanka in the past seven months, signalling a positive trend for the airline, as Sri Lanka’s situation gradually returns to normalcy. However, Ravindran provided no further details about the ongoing privatisation discussions.

Tata Sons, the parent company of Air India, Air India Express, Vistara, and AirAsia India, has long been considered a potential investor in Sri Lanka’s state-owned carrier. In contrast, the involvement of the Adani Group is a recent development. Group chairman Gautam Adani held discussions with Sri Lankan President Ranil Wickremesinghe during the president’s two-day visit to India in July, focusing on multiple projects within Sri Lanka. While the meeting encompassed various initiatives, there was no mention of the airline at the time.

Emirates’ history with SriLankan Airlines dates back to 1998 when it acquired a 43.63 per cent stake in the carrier, along with a ten-year management concession. However, a falling out between Emirates-installed executives and the Sri Lankan government led to Emirates choosing not to renew its contract in 2008. The airline subsequently divested its shares to Colombo in 2010, and efforts to find a strategic investor since then have been unsuccessful.

Sri Lanka’s commitment to privatise loss-making SriLankan Airlines, as pledged by then-Prime Minister Wickremesinghe in May 2022, aimed to shift the burden of restructuring the airline, including addressing its high legacy debt servicing costs, to private investors instead of relying on state finances, as stated by the report. The initial focus will be on restructuring the carrier’s balance sheet with the subsequent sale of the airline. In early July, Sri Lanka’s civil aviation minister, Nimal Siripala, emphasised the completion of the airline’s restructuring within six months.