Airline partners sought for SriLankan after TPG drops out
May 06, 2017 06:42 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Sri Lanka will negotiate directly with airlines in a bid to find a strategic partner after TPG, a US-based private equity firm ended talks aimed at investing in state-run SriLankan Airlines, a minister said.
"Now we have the next step, to directly talk to the airlines," Deputy State Enterprises Minister Eran Wickramaratne said.
"But what is possible is there may be scope with another airline where there is a strategic fit to form a partnership or management arrangement."
"There has been some preliminary discussions with some airlines. We have to see whether that will work."
TPG was selected as the most suitable party after calling international proposals.
But it had dropped out after conducting due diligence on the loss-making airline saying they had better investment options, SriLankan Airlines Chairman Ajit Dias told staff.
Sri Lanka had earlier formed a ministerial committee to talk directly to airlines, even before negotiations with TPG ended.
In the late 1990 Emirates bought a 40 percent stake in SriLankan and kept it profitable until 2008, when ex-President Mahinda Rajapaksa terminated the deal over a tiff involving dumping paying passengers to accommodate a presidential entourage.
His brother-in-law was made chairman and the airline made nearly billion dollars in losses.
Minister Wickramratne said over the last 15 years the airline industry had gone through fundamental changes.
Aviation de-regulation had made it more difficult for state-run carriers to service and nimble budget airlines were transforming air transportation including in Asia. (Colombo/May05/2017)