Sri Lanka state airline to get Rs25bn bailout: report

(L-R) : Jeevith Senaratne, Director Operations - Star Garment Group; Shanaka Rabel, Group Chief Digital and Transformation Officer - Stretchline Holdings Ltd; Janaka Botejue, Chairman – Bernard Botejue Industries; Sanjeewa Kodikara, Chief Information Officer- Hirdaramani Group

July 15, 2013 (LBO) – State-run SriLankan Airlines will get a 25 billion rupee tax-payer bailout, through a Treasury bond to settle fuel bills, a media report said. Sri Lanka’s The Sunday Times newspaper quoted civil aviation minister Priyankara Jayaratne as saying that the Treasury has agreed to pay 25 billion rupees owed to state-run fuel distributor, Ceylon Petroleum Corporation.

Another 11 billion rupees remained, the report said.

SriLankan had run operating losses of 20.5 billion rupees in 2012, and Mihin Lanka, state budget carrier another billion rupees.

SriLankan also gets 100 million US dollars of tax-payer funded capital injections a year which was also initially paid through Treasury bonds. It is not clear whether the fuel bailout is in addition to the annual injections.

The airline is to acquire a fleet of long-haul aircraft to upgrade its produce and cut fuel costs, but is facing heavy competition from both full service and budget carriers.

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