Cash-strapped SriLankan Airlines’ restructuring committee has proposed the sale of the carrier’s catering and ground handling units, according to reports.
According to a report on the Seychelles News Agency it has though decided against liquidating its national airline and will instead look for a foreign investor to pump in funds and help turn around its financial woes.
The airline has two profit-making subsidiaries in catering and ground handling that could go some way to “enhancing the value of the company” through proper restructuring, the report says.
The airline is estimated to be saddled with loans and accumulated losses of nearly $2 billion.
Previous attempts to privatise the airline failed in May 2017 when San Francisco-based private equity firm TPG withdrew its bid for a 49 per cent stake. Since then, there has been no foreign or local investor interest in SriLankan Airlines.
SriLankan Airlines was profitable until 2008 until the then president of Sri Lanka Mahinda Rajapakse cancelled the management agreement with minority stakeholder Emirates after it reportedly refused to kick fare-paying passengers off a flight and accommodate his family instead.
Rajapakse removed the Emirates-appointed chief executive officer and appointed his brother-in-law Nishantha Wickremasinghe – who is now under investigation for corruption and mismanagement while in charge of the airline.