Merger
The restructuring plan prepared by state-owned Merchant Bank of Sri Lanka, had also suggested the smaller airline merge with national flag carrier SriLankan Airlines.
"I can't see a problem to merge with SriLankan," Gunawardene said.
"We are owned by the same parent, the government.
"For the commercial viability of both entities, it (merger) can be done.
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However, merger would eventually have to be approved by SriLankan's 40 percent shareholder, Dubai's Emirates Airlines, he said.
The country's first state-run airline Air Ceylon went bust in the 1970s.
The second state-run airline, Air Lanka was part privatized and given for Emirates to manage after running losses and being mired in repeated procurement scandals.
Emirates re-named the airline, SriLankan.
SriLankan airlines is currently managed by the government after Emirates pulled out of a management deal from March this year.
Gunawardene's brother, Manoj a veteran at Sri Lankan, was recently app