SriLankan at 45, not much to celebrate

On 1 September, the national carrier, SriLankan Airlines turned 45 years old. It has been a long arduous journey for the carrier, currently bleeding the public coffers with its losses. While it may be a source of pride to operate a national carrier, one that burdens the taxpayers with little return is not a sustainable venture.

There was much hope that the administration of President Ranil Wickremesinghe would finally address this dire issue and divest the loss-making airline. An enthusiastic call was made from interested parties in October 2023 giving some hope for divestment. Yet like many good ideas of the Wickremesinghe administration, this too has remained an idea with the process now being cancelled and policymakers once again talking of vague reforms rather than bold decisions that would have ensured the lifting of the economic burden of a multibillion-dollar loss-making airline on the taxpayers.

This July the Government changed course on its policies to divest SriLankan Airlines and announced that it would ‘reform’ the loss-making enterprise. The statement by the State-Owned Enterprises Restructuring Unit claimed that “the Cabinet of Ministers at its meeting held on 9 July has decided to terminate the current bidding process concerning the divestiture of SriLankan Airlines. Instead, the GoSL will now follow an alternate strategy, to be decided on shortly, to divest the airline based on a framework approved by the Cabinet of Ministers.” This new policy is yet to be announced and as elections are held it is inevitable that these much-needed reforms will be further delayed.

Further exacerbating the matter has been the direct corruption related to SriLankan Airlines. In 2020 the UK’s Serious Fraud Office (SFO) discovered a massive financial fraud by Airbus Industries which exposed that the airline company had paid huge bribes to SriLankan Airlines officials between July 2011 and June 2015 to finalise an aircraft procurement deal completely unfavourable to the national carrier. Then President Gotabaya Rajapaksa ordered an investigation. Not much has been heard of this investigation nor has a single individual associated with this massive fraud been held accountable. 

This Government in particular cannot ignore the serious concerns of corruption and lack of transparency in dealing with SriLankan Airlines. Due to its own dubious record and the serious lack of financial integrity of key players within the administration, the general public is right to be sceptical of any secret deals that are negotiated behind closed doors. The minister in charge of civil aviation himself was accused of corruption and malpractice. It is reported that a North Asian investor had previously complained about the minister asking for kickbacks in the project to expand the Bandaranaike International Airport. No action was taken against the individuals, nor was any explanation provided to the public. It is with such individuals still at the helm that the Government is undertaking this much-needed reform. 

While the reform of SriLankan Airlines is vital at this time of national economic crisis, it needs to be done in a proper transparent manner to ensure that the public does not lose trust in the process. The inability to deliver on the much-needed reforms to SriLankan Airlines and its continued burden on the Treasury is an indictment of the ineffectiveness of the current administration. At least before the airline turns 50 in five years it is hoped it will turn around to be an actual source of pride for the nation.