SriLankan CEO open to privatization of the national airline

COLOMBO (News 1st) - SriLankan Airlines CEO Richard Nuttall said that Sri Lanka benefited from pent-up travel demand despite global headwinds and is open to privatization.

"We are still going through the process. Everybody is open to it. The country is going through an IMF process. IMF really doesn't like governments owning and supporting airlines because it is a debt liability. The government wants to privatize us (UL). We are open to it," said the CEO of the national airline in his comments to CNBC from Singapore.

Richard Nuttall said that the benefit of being a national airline is financial support, and there are complications are governance. 

"At the moment, the government does not have the money to financially support us, so privatization is a good option. The airline is also carrying quite a lot of debt, both from COVID times and from past operations, that debt doesn't really involve today's operations but it is something that we have to keep paying off.  So if privatization provides some funding that allows us to reduce some of that debt, that also helps our ongoing operations and reduces the debt burden and makes future growth a much more realistic option," he said.

The CEO of SriLankan Airlines also said that Sri Lanka benefited from pent-up travel demand despite global headwinds and the national carried had the best first six months of the year in the last 15 years

"From December last year, things actually started to pick up and we made a profit. We were looking forward to a solid year. We are living off cash flows. The economic situation in Sri Lanka means that we cannot borrow money, and the government doesn't have money. So, we have to do everything off cash flows. But, we were fairly confident. Then obviously we have a war in Ukraine, and the oil prices started going up. Then we have the issues in Sri Lanka and the Foreign Media portraying it as perhaps not the safest place in the world, with all the travel advisories. Then we get to July and August, there is no fuel in the country. It is such a strange world. We've got all this pent-up demand after COVID. Sri Lanka has a huge diaspora, there are people trying to get back and forth to see families, students trying to get to universities, and businesses trying to get up on their feet again. So, against that backdrop we've actually had the best first six months of the year in the last 15 years," said the CEO of SriLankan Airlines.