Crucial evaluation of SriLankan Airlines restructuring progress under way

• Ministerial Committee and Officials’ Committee to present recommendations to Parliament
• No final decision on debt absorption by Finance Ministry

By Chathuri Dissanayake

The Committee overseeing the restructuring efforts of national carrier SriLankan Airlines has called for an evaluation of reforms carried out, with plans to make recommendations to the Cabinet, top Ministry source said.

Both the Finance and Public Enterprise Ministries met last week to discuss ways of offloading the debt burden of the airline, in a bid to find new investor. Although discussion has focused on creating a Special Purpose Vehicle to absorb all the debt, no final decision has been made on the matter until an evaluation on the restructuring has been completed by the two committees, Officials Committee and the Ministerial Committee, Daily FT learns.

The meeting to discuss the debt burden included members of the Board of Directors of SriLankan Airlines, members of the Officials Committee, and officials from Bank of Ceylon and People’s Bank. Finance Mass Media Ministry Senior Advisor Mano Tittawella were also present, along with the two ministers.

At the meeting, the committees decided that a proper evaluation needed to be carried out to understand progress made under restructuring efforts.

“The restructuring board claim that progress have been made in route rationalisation, internal cost cutting, and in other departments, but this has not been quantified. So we are trying to understand to what extent the restructuring has happened,” one source told Daily FT.

The evaluation will also take into consideration the restructuring plan given by British consultant Nyras Consulting Company, specialising in the global aviation sector, which was appointed to lead the restructuring of the carrier.

The evaluation will require the committees to meet at least three to four times to finalise, one source told Daily FT. Once the evaluation is done the committees will formulate a set of recommendations to the Cabinet on the future plan for the Airline, Daily FT learns.