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Turbulence ahead: Airline on the block in Sri Lanka reforms

Published

4 years ago

2022/11/13

By Amal Jayasinghe

Dozens of state-owned Sri Lankan companies employing tens of thousands of people could be restructured or closed as part of an IMF bailout of the bankrupt country, with the country’s airline top of the list for reform.With nearly 6,000 staff, SriLankan Airlines is the biggest and most expensive of the cash-haemorrhaging, sclerotic companies that have drained the budget and compounded the worst financial crisis in national history.

According to treasury figures, the carrier was losing $4.50 for every dollar it earned at the start of this year. It has not turned a profit since 2008, when its chief executive was sacked for offending the country’s then-leader.

“Even those who have never stepped into a Sri Lankan aircraft are paying to subsidise the airline,” government spokesman Manusha Nanayakkara told reporters this month.

“We can’t continue like this.”

Sri Lanka defaulted on its $51 billion foreign debt in April and is now neck-deep in the arduous process of renegotiating its obligations with creditors.Its 22 million people suffered through months of food and fuel shortages, and at the peak of the crisis, a furious mob stormed government buildings and chased Sri Lanka’s former president into exile.

The International Monetary Fund (IMF) has given preliminary approval to a $2.9 billion bailout, and the government hopes to be able to access the first tranche by the end of the year.Terms of the deal have yet to be released, but IMF cash is usually conditional on painful reforms, such as tax hikes, removing consumer subsidies, and privatising or closing underperforming state firms.

The country has more than 300 state enterprises, ranging from nut farms to fuel retailers, and the top 52 firms lost nearly $2.4 billion between January and April — around $140 million a week.

SriLankan Airline’s future is the most urgent priority, and the government last month instructed the finance ministry to begin its restructuring, ideally by attracting outside investment.

But finding a company willing to pour money into the airline will be immensely challenging, analysts say, given its history of interference, mismanagement and turbulent partnerships.In 1998, Emirates bought a minority stake in the carrier and took over its management.

It stayed in the black for most of the next decade, although one of its most profitable years was — ironically — 2001, when the Tamil Tigers separatist movement attacked the country’s main international airport. Several of the airline’s planes were destroyed in the July attack, but insurance payouts and the removal of excess capacity offset a downturn in ticket sales.

But the partnership was terminated and the chief executive sacked by then-president Mahinda Rajapaksa in 2008 after the carrier refused to bump fare-paying passengers to make room for members of his family returning from a jaunt in London. The leader packed SriLankan’s management with relatives and loyalists, several of whom now face corruption charges, and the airline has bled cash since.Rajapaksa even started a rival state-owned airline named after himself, a colossal failure that was eventually merged into SriLankan — along with its accumulated losses.

Authorities tried to sell a 49 percent stake in SriLankan back in 2017 when the island nation’s tourism market was booming, but even then private equity firm TPG eventually withdrew its bid after deciding it was not a viable operation.Airlines are “generally not that attractive” to investors, Singapore-based aviation analyst Brendan Sobie told AFP, “particularly airlines that are government owned and have a lot of legacy issues, have a lot of debt, like SriLankan does”.

“There’s not many foreign airlines, particularly in this post-Covid environment, that are even looking or considering buying stakes in airlines overseas,” he added, and the track record for strategic investments in the sector was “very bad”.

“It’s very difficult,” he said.SriLankan chairman Ashok Pathirage acknowledges the airline’s current balance sheet is not an attractive proposition.

“If you try to privatise the whole thing, people will come and ask the government to take half of the debt,” Pathirage told AFP.

But he said SriLankan could settle about half of its liabilities by splitting off and selling profitable business arms, including its virtual monopoly on catering and ground handling at Colombo airport.Trade union leaders and employees support a restructuring along those lines, on the condition that no jobs are cut.

“The airline is losing money not because of the staff, but expensive leases and poor financial structures,” a cabin crew member, who requested anonymity, told AFP.But selling off the airline’s profitable divisions would leave the rump operations generating even bigger losses for the government.

Former state finance minister Eran Wickramaratne told AFP that if authorities could not find an investor, the airline should be grounded permanently before it could burden the public further.

“We are a bankrupt country,” he said. “We have not been able to service our debt and that reality has struck home.”

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Published

9 hours ago

2026/09/10

Sahan Weerasooriya

GL / Harshana

Opp. lashes out at Justice Minister for disparaging remarks about CLA

By Shamindra Ferdinando

The Joint Opposition yesterday (09) tore into Justice and National Integration Minister Harsha Nanayakkara over some disparaging remarks about the Commonwealth Lawyers Association (CLA) in Parliament on Tuesday (08).

The Convenor of the Opposition grouping, former Law Professor Peiris questioned Minister Nanayakkara’s declaration that the CLA was a private club that granted membership on payments received. Emphasising that the CLA consisted of those in the legal profession in Commonwealth countries, Prof. Peiris told the weekly media briefing at the Flower Road Office of former President Ranil Wickremesinghe that the views expressed by the organisation couldn’t be discarded under any circumstances.

Prof. Peiris dealt with Nanayakkara’s response to the CLA’S concerns about several issues, including the composition of the five-member panel of judges. “How could Minister Nanayakkara dismiss concerns raised by CLA on the basis of the paid-membership of the organisation?” Prof. Peiris asked. If membership became an issue, the government would have to reconsider Sri Lanka’s UN membership, the ex-External Affairs Minister said, pointing out that the country had to make regular payments to retain membership of other UN agencies, as well.

Prof. Peiris said that indefensible attacks on international organisations could cause irreparable damage to the country. Appreciating the CLA’s report on the Supreme Court proceedings on the 01 and 02 September, Prof. Peiris stressed the importance of what he called total transparency in the judicial process. He said that whatever the outcome of a particular legal process, it couldn’t be done behind the backs of the public.

Referring to legal processes regarding the 6th Amendment and 13th Amendment, in 1983 and 1987, respectively, Prof. Peiris said, on both occasions the then Chief Justices Neville Samarakoon and S. Sharvananda constituted benches consisting of all Supreme Court judges.

But, the incumbent CJ Preethi Padman Surasena, in spite of the majority of petitioners demanding all available 13 justices to hear the case, decided to leave out those on the seniority list from second position to fourth position.

The government got offended because the CLA pointed that out for the whole world to take notice, Prof. Peiris said. The former parliamentarian noted that the CJ hadn’t even give a reason for declining the widespread call to involve all available 13 judges. According to him, there had been instances where CJ’s appointed seven justices to hear a particular case. Prof. Peiris cited the 2018 bench of seven judges that heard the petitions against President Maithripala Sirisena over the dissolution of Parliament and a panel constituted in 2023 to hear the 2019 Easter Sunday carnage that claimed the lives of 270 people.

The issue at hand is that the five-member panel of judges hadn’t been selected on the basis of seniority, Prof. Peiris said, once the SC determination was sent and released through the Speaker, they would meticulously examine that to make their position known to the people. Prof. Peiris said that what they really wanted to know was that if seniority hadn’t been the basis for selection what the criterion was.

News

Sri Lanka reiterates its territory won’t be used against India

Published

9 hours ago

2026/09/10

Sahan Weerasooriya

Indian Defence Minister Rajnath Singh listening attentively to President Dissanayake (pic courtesy PMD)

The Indian Defence Ministry in a statement issued yesterday (09) quoted President Anura Kumara Dissanayake as having assured visiting Defence Minister Rajnath Singh that Sri Lanka would never allow its territory to be used for activities inimical to India’s security interests.

The text of the Indian press release: “Visiting Indian Defence Minister Rajnath Singh called on President Anura Kumara Dissanayake in Colombo on September 09, 2026. The two leaders held substantive discussions on issues covering the entire spectrum of the multi-faceted partnership between the two nations, characterised by traditionally warm relations and mutual trust.

The two sides reaffirmed that as civilisational twins, close neighbours and maritime partners, India and Sri Lanka would continue to work together for their development and welfare of the people while working jointly to ensure the safety, security, peace and prosperity of the region. The senior Indian Minister conveyed greetings on behalf of Prime Minister Narendra Modi and underlined that the citizens of the two countries share deep friendship based on strong historical & civilisational links and people-to-people exchanges.

Extending a warm welcome to Mr. Singh, President Dissanayake recalled his interactions with PM Modi and reiterated that Sri Lanka would never allow its territory to be used for any activities inimical to India’s security interests.

President Dissanayake expressed his gratitude for the relief assistance provided by India as part of Operation Sagar Bandhu during Cyclone Ditwah and the comprehensive rehabilitation package extended by New Delhi to facilitate reconstruction and rehabilitation work across different parts of the island. The powerful Indian Defence Minister emphasised that as a closest friend and neighbour of Sri Lanka, India considered it not a favour, but a responsibility to provide assistance as the first responder and would continue to do so in the future as well.

Both leaders virtually inaugurated three Bailey Bridges constructed by the Indian Defence Forces. The two sides also exchanged MoUs on upgradation of L70 Guns for the Sri Lankan Air Force, and cooperation between National Cadet Corps (NCC) & National Defence Colleges (NDC) of both the countries. The MoU on Upgradation of six L70 guns for the Sri Lankan Air Force falls under a Government of India grant. The upgradation of these air defence guns will significantly strengthen the air defence architecture of critical assets in Sri Lanka. These air defence guns were earlier provided to the Sri Lanka Air Force by India.

The MoU on academic cooperation between NDC, India and NDC, Sri Lanka will facilitate knowledge sharing which will be a significant step in further strengthening the academic bonds between both the sister institutes. The MoU on NCC cooperation will formalise the NCC youth exchange programme between India and Sri Lanka. This exchange programme provides a valuable opportunity for NCC cadets from multiple countries across the world to come to New Delhi every year and participate in NCC events.”

News

UK-led Core Group calls Jaffna mass graves a ‘stark reminder’ but stops short of calling for international accountability

Published

9 hours ago

2026/09/10

Sahan Weerasooriya

Eleanor Sanders

Mass grave excavations in Sri Lanka are a stark reminder that thousands of cases of enforced disappearance remain unresolved, the Sri Lanka Core Group has told the UN Human Rights Council, urging Colombo to translate its stated commitment to reform into concrete progress, while again stopping short of calling for the international accountability that Tamils have long demanded.

The statement, delivered in Geneva, on Tuesday (08), during the Council’s 63rd session by the United Kingdom’s Human Rights Ambassador Eleanor Sanders on behalf of Canada, Malawi, Montenegro, North Macedonia and the UK, welcomed, what it called, the High Commissioner’s balanced assessment of the human rights situation on the island.

The group acknowledged that Sri Lanka had faced considerable challenges recently, including severe weather events and global energy shocks, and welcomed positive developments, including the ratification of the ILO Convention 190 and engagement on the Convention on the Rights of Persons with Disabilities.

“However, much further action is needed to build confidence in accountability and reconciliation efforts,” Sanders said. “Progress in several emblematic cases has not yet been accompanied by a comprehensive,

victim-centred accountability process to address past violations. Mass grave excavations are a stark reminder that thousands of cases of enforced disappearances remain unresolved. And reports of intimidation, harassment, and restrictions affecting civil society, journalists and victims’ groups, including in the North and East, still raise concerns.”

The group urged progress on democratic governance, including advancing legal and institutional reforms, resolving land-related issues, ensuring respect for human rights in detention institutions and strengthening independent institutions.

The statement follows a familiar pattern. In June, the group acknowledged “developments in certain mass grave investigations” and urged that excavations meet international standards, and in March it called for the repeal of the Prevention of Terrorism Act. At the 58th session it welcomed a series of measures Tamils regarded as superficial. Neither this statement, nor its predecessors, names Chemmani, calls for international oversight of the excavation, or addresses the demand for a referral to the International Criminal Court.