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Sri Lanka tax-payers in fresh Rs11.7bn bailout of SriLankan Airlines

Jul 23, 2016 10:26 AM GMT+0530 | 0 Comment(s)

ECONOMYNEXT - SriLankan tax payers have just paid out 80 million dollars (about 11.7 billion Sri Lanka rupees) to bailout state carrier SriLankan Airlines which has been making losses since ex-President Mahindra Rajapaksa reversed a privatization, ministers said.

The 80 million dollar subsidy had just been given to cover "oil and old bills" State Enterprise Minister Kabir Hashim said.

Sri Lanka had just raised 1.5 billion dollars in international markets from a sovereign bond, which will have to be repaid by tax-payers.

Deputy State Enterprises Minister Eran Wickremeratne said though it was considered a nice thing to have the Sri Lanka flag flying through a national carrier ordinary citizens who never travelled by air were paying for it every time they went to the shop (kdamandiyata) to buy goods though sales taxes.

Wickremaratne said there was a benefit for the tourist industry but the losses were covered by the ordinary people.

Large number of its users were foreigners, he said.

Thought some people wanted a national carrier they travelled in other airlines when they went abroad, he said.

"I am not saying it is wrong to buy a ticket from another airline, everyone wants to save money," Wickremeratne said.

"But the losses are then covered by other people."

SriLankan had made losses of over 900 million dollars since ex-President Mahinda Rajapaksa terminated a management contract with Emirates, Minister Kabir Hashim said.

"To imagine how much this means it is enough money to build 60 hospitals with 300 beds," he said.

Hashim said the airlines had been making profit until 2008, when ex-President Rajapaksa due to a dispute with the chief executive terminated the management contract and appointed his brother-in-law as chairman, driving the airline down.

The airline had 21 aircraft and 300 pilots, he said. Under state-management workers had also expanded sharply, raising costs.

Sri Lanka had called for expressions of interest to invest and management the airline. (Colombo/July23/3016)


 

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