The restructuring of Rs. 91.3 billion in state-bank loans owed by SriLankan Airlines is now complete, Ports and Civil Aviation Minister Anura Karunathilaka told Parliament on Tuesday, while disclosing that the national carrier’s total outstanding liabilities stand at USD 993.78 million.
Responding to a question from New Democratic Front MP Ravi Karunanayake, the Minister said the Treasury, the banking authority and SriLankan Airlines have agreed on a structured repayment mechanism, under which the government injects capital every April and October to allow repayments to state banks. Restructuring of the airline’s USD 175 million international sovereign bond guarantee is under way and is expected to conclude by end-2026.
Karunathilaka said the Auditor General has questioned whether the carrier can be run profitably in the long term. The Cabinet and Treasury Secretary have given written assurances that financial support will continue, he added, but the government does not intend to retain the airline in its current form indefinitely. Talks at ministerial and Treasury level are exploring a public-private partnership, a management contract or continued full state ownership.
Karunanayake noted that the airline forms part of the country’s discussions with the International Monetary Fund and argued that commercialisation is necessary. The Minister replied that there is no conflict between the restructuring exercise and the IMF programme.
The disclosure follows the Sydney handling contract awarded to Menzies Aviation and a continuing search for a new chief executive, as the airline tries to stabilise operations while a long-term ownership model is settled.
