Indian conglomerate Tata Sons has appeared again in recent media reports as a possible investor in SriLankan Airline which is one of the state entities lined up for privatization. Tata is a major player in airline business in India already owning Air India, Vistara, Air India Express and AirAsia India.
SriLankan Airline Chairman Ashok Pathirage recently told a government committee on public enterprises that privatization is good as long as the right buyer is found while CEO Richard Nuttall said he was focused on replacing aircraft and rebuilding the fleet ahead of any privatisation.
SriLankan presently flies to the Indian airports of Bangalore International, Chennai, Delhi International, Hyderabad International, Kochi International, Madurai, Mumbai International, Thiruvananthapuram, and Tiruchirapally from its Colombo hub and commands a 63.21% market share on Sri Lanka - India sector.
Meanwhile Air India and Vistara have 13.68% and 4.69% market shares respectively. If Tata acquires SriLankan Airlines its airlines would provide 81.58% of all seats on the country pair with hardly any competitors.
Aviation minister Nimal Siripala De Silva told Sri Parliament on March 24 that the USD500 million expected to be raised from selling the subsidiaries would cover less than half SriLankan Airlines' USD1.2 billion of debts. "The rest of the debt will have to be borne by the Treasury," he said
Sri Lanka's Ministry of Finance is liaising with the International Finance Corporation (IFC) regarding the divestment of SriLankan Airlines, along with its subsidiaries SriLankan Catering Limited and SriLankan Ground Handling Limited. The move follows the government bringing multi-national financial advisory firm, Lazard, onboard to assist in the sale process.
Subscribe to our newsletter to get notification about new updates, information, etc..
