Press briefing of Cabinet Decision taken on 2016-04-26

Re-orientation of SriLankan Airlines (SA)

- The SriLankan Airlines, initially founded, as 'Air Ceylon Limited' in the year 1947, was incorporated thereafter as a limited liability company as 'Air Lanka Limited', in the year 1979. According to the 10 year management contract entered into with the Emirates Airlines in 1998, 40% of the shares of the Air Lanka Limited were divested to the Emirates Airlines and at the same period 'Air Lanka' was renamed as 'SriLankan Airlines'. The SriLankan Airlines, as a whole, successfully functioned as a profit making entity, paying taxes to the Government, during the period between 1998 to 2008 when the Emirates was handling the administrative activities of SriLankan Airlines. Subsequently, in the year 2010, operational activities of the Airlines were re-vested with the Government and presently, it is functioning with continuous operational losses due to many reasons including unsound management. As per the analysis conducted by the Ministry of Finance, the total liabilities of SriLankan Airlines as at 2015-12-31 stands at Rs.461 billion. Therefore, a suitable partnership has to be sought for taking over of the operational activities of the SriLankan Airlines with the objective of re-orienting the SriLankan Airlines, having redeemed it from the financial crisis. Accordingly, the proposal made by Hon. Ranil Wickremasinghe, the Prime Minister, for the Government of Sri Lanka to take over all the liabilities of SriLankan Airlines, to enable it to reorient on its own, was approved by the Cabinet.