Job uncertainty looms for 6,000 Sri Lankan Airlines employees

Sri Lankan Ports and Civil Aviation Minister, Nimal Siripala de Silva, has raised concerns about the possible loss of jobs for approximately 6,000 employees at Sri Lankan Airlines if immediate restructuring measures are not undertaken.

At Saturday’s press conference, on July 1, the Minister said that the Sri Lankan government cannot sustain the financial losses incurred by the airline, and added that it would be unfair to continue using taxpayer funds.

To address the current situation, the Sri Lankan government has taken steps to seek assistance from international financial experts. The objective of this initiative is to ensure a transparent restructuring process for the airline.

“Sri Lankan Airlines, established as our national carrier many years ago, holds a unique position. While it managed to generate a profit of Rs. 30 million during the period it operated under Emirates Airlines, it has struggled to achieve profitability otherwise,” the Minister said.

Emirates Airlines operated Sri Lanka’s flagship carrier for a 10-year period from 1998 until 2008, after which the Sri Lankan government bought back the shares from Emirates.

The airline, which relies primarily on taxes, currently carries a debt of USD 1.2 billion. This has resulted in various organizations, including local state banks, having to cover outstanding payments for international bonds and leased planes.

The Minister emphasized that due to economic challenges and foreign exchange difficulties, the state can no longer afford to fund the airline’s losses as it has done in the past. He highlighted that this approach is no longer equitable, necessitating the need for restructuring.

According to the Minister, the restructuring plan involves the Sri Lankan government retaining a 51 percent share in the airline, while the remaining 49 percent will be made available to potential private sector investors.

The proposal for the restructuring of the airline was submitted to the Sri Lankan cabinet six months ago. Despite generating some profits from ground operations and Sri Lankan Catering Company, these earnings are insufficient to cover the airline’s losses.

Prior to the Covid-19 pandemic, the national carrier of Sri Lanka, which has been in operation for 44 years, served over 40 international destinations. However, these operations were interrupted due to the pandemic.

Article source: https://airlines.einnews.com/article/642590093/w22fykipz9V3ljmp?ref=rss&ecode=vaZAu9rk30b8KC5H

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