Hong Kong-based private equity firm Transwell Corporation Limited has submitted a private investor-led turnaround proposal for SriLankan Airlines, offering to return the loss-making national carrier to sustainable profitability within 24 to 36 months without drawing on the state treasury.
The proposal was lodged by Transwell Chief Executive Officer Christopher Radhakrishan through corporate advisory channels, for review by Dr Hans Wijayasuriya and the government’s restructuring committee. That committee was appointed by Cabinet in June to run the carrier’s strategic review, with the International Finance Corporation as transaction adviser.
How the ownership structure would work
Incoming investors would carry full responsibility for capital from the first day — operating expenses, fleet expansion and growth spending — with no treasury support and no state-backed debt.
The government would initially retain full ownership, with its shares placed into an escrow trust. A convertible note instrument would then govern the transfer of a minimum 49 per cent equity stake to the investors across a 10-year operational term.
Capital released only against targets
Investor capital would sit in escrow, released only as the airline clears defined milestones.
Year one requires on-time performance of at least 85 per cent over a rolling 90-day period and a 5 per cent cut in cost per available seat kilometre through renegotiated supplier contracts. A second phase turns to fleet lease restructuring — lifting narrow-body utilisation to at least 12 hours of flying a day, retiring legacy sub-fleets, and holding unscheduled aircraft-on-ground delays below 1.5 per cent of scheduled flights.
By year three the focus shifts to the Colombo hub, targeting a 15 per cent annual rise in connecting traffic and a load factor of at least 80 per cent on core routes. A final phase requires 75 per cent of new routes to turn a positive operating margin within 180 days, plus a 10 per cent gain in workforce productivity.
The pitch
Radhakrishan argued the carrier is undervalued rather than terminal. Global travel demand remains strong, he said, but the gap between the airline’s revenue per available seat mile and its cost per available seat mile has widened sharply under high fuel prices and legacy inefficiencies.
“Sri Lankan is not an asset in decline, but rather a company with significant unlocked potential,” he said, describing the airline as “underperforming on ancillary revenue” and “suffering from low asset utilisation”.
Founded in May 2002, Transwell invests in smart cities, digitalisation and aviation infrastructure. Its aviation portfolio includes master planning and funding for a Southeast Asian airport and an adjacent “AeroCity” project with an initial phase exceeding 2 billion euros.
The government has not responded publicly to the proposal.
Source: Daily Mirror.
