The Sri Lankan government will introduce the Public Commercial Businesses Bill to provide a legal framework to ensure effective management, financial discipline, and transparency at state-owned enterprises such as SriLankan Airlines (UL, Colombo International), according to the country's The Sunday Times newspaper. This comes as an International Monetary Fund (IMF) representative said the airline needs to speed up its debt resolution processes.
The proposed bill, which the Cabinet of Ministers has endorsed, focuses on improving governance and will strip the Treasury of preferential treatment and guarantees. It calls for experts to be appointed to boards rather than political appointees.
SriLankan Airlines is among the country's highest-profile state-owned enterprises. Plans to privatise it were abruptly cancelled in mid-2024 after several prospective buyers had submitted formal expressions of interest and before a national election and a change of government. The new government has no interest in privatising the airline, saying it is a vital cog in the country's all-important tourism sector and is best left in state ownership.
Sri Lanka's civil aviation minister, Bimal Rathnayake, says the government will ensure funding is available to maintain and grow the carrier. He also says the government is focused on restructuring SriLankan's USD1.2 billion debt.
IMF Mission Chief for Sri Lanka Evan Papageorgiou told an April 29 press conference that the government had taken some steps towards turning around SriLankan Airlines and resolving its debt.
"We know that the current budget has set aside LKR20 billion rupees [USD66.8 million] to pay off some of the airline's debt," he said. "We are also aware that Sri Lankan Airlines has hired a financial adviser to restructure its international bonds. But we think these need to pick up pace so we can have a good resolution of all these outstanding issues."
