Restructuring of the national carrier will take place with the new Board coming up with a strategic plan to revive the airline after the festive season, Public Enterprises and Kandy Development Minister Lakshman Kiriella told Business Observer.
“We are in the process of finding a strategic partner to invest in the airline and turnaround the company from a loss-making entity to a profitable establishment,” the Minister said.
Refuting views that the plans to revive the airline has been dragging too long, the Minister said restructuring of a company that was thrown into the doldrums by the former regime who swindled the assets of the company, is no easy task. “We need time as such a major task cannot be accomplished overnight.”
A new Board of Directors under the Chairmanship of Ranjit Fernando was appointed to the SriLankan Airlines to accelerate the restructuring process and create the enabling environment to proceed with entering into a Public-Private-Partnership with a strategic investor. Other Board members comprise Mano Tittewella (Ministry of Finance), Dr. Roshan Perera (Central Bank), Air Marshal Kapila Jayampathi (Air Force Commander) and Susantha Katugampala (Lawyer/Barrister).
Fernando helped transform the then State-owned National Development Bank where he served from its inception in 1979 until his retirement in 2001. The restructuring and PPP process will continue to be guided by the Officials Committee chaired by the Secretary to the Treasury with the participation of the Secretary, Ministry of Public Enterprise Development and Chairman of the National Agency for Public Private Partnership (NAPPP), Thilan Wijesinghe who serves as the Convener of the Officials Committee.
The Officials Committee will continue to refer required areas for direction by the Ministerial Committee chaired by the Prime Minister and for implementation by the Board of SriLankan Airlines.
Aviation Consultants, Nyras of UK, hired after a competitive process in November 2017 by the Officials Committee, will continue to report to the Officials Committee. This working arrangement is to ensure shareholder (Treasury) interests are adequately addressed in the restructuring process.
The final restructuring plan prepared by Nyras with the assistance of NAPPP has already been presented to the Ministerial Committee and will be submitted to the Cabinet of Ministers for approval upon being endorsed by the new Board of Directors.
Nyras has presented a detailed business plan that demonstrates the SriLankan Airlines Group can become viable in the short to medium term through the restructuring strategy. This has similarities to the strategy adopted by Swiss Air and Aer Lingus, both advised by Nyras, that resulted in turning these loss-making airlines turning into extremely profitable companies. The NAPPP, with the assistance of Nyras, will coordinate the PPP process that will be implemented in parallel with the restructuring process and advise the Ministry of Finance and Officials Committee. The NAPPP will also advise the Officials Committee on the debt restructuring process designed to mitigate any impact on the General Treasury and State Banks, who are the largest lenders to SriLankan Airlines.