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Sri Lanka to restructure national airline carrier after mounting debt

Xinhua, April 7, 2016 Adjust font size:

The Sri Lankan government on Thursday announced that it would restructure its national airline carrier, SriLankan Airlines, after it faces a debt of nearly 1 billion U.S. dollars.

State Minister of Finance, Lakshman Yapa Abeywardena said at a media briefing that although the government would not privatize the national carrier and restructure it in order to halt the staggering losses.

"The debt is nearly 1 billion U.S. dollars. It cannot continue like this," Abeywardena said.

Sri Lankan Prime Minister Ranil Wickremesinghe recently said in parliament said that the airline is unable to pay the debt and the government would soon decide whether to take over its liabilities.

"In the next month or six months we will have to take a decision what to do about the debts of SriLankan Airlines," Wickremesinghe told parliament.

"SriLankan Airlines will not be able to pay these debts. Whether government is to take over them or what is the decision we will inform this house."

State Enterprises Development Minister Kabir Hashim earlier this year said that the state-owned carrier was making losses on its long-haul routes and losses were totaling 933 U.S. million dollars.

Wickremesinghe said that according to the minister, the actual debt was likely to be much more than what the government had initially feared.

Wickremesinghe, soon after being sworn to power last year, ordered a criminal investigation into alleged corruption in the national airline, saying that it involved "billions of dollars".

He said an inquiry led by an anti-corruption lawyer had found "shocking details of corruption running into billions of dollars" at SriLankan Airlines, as well as "irregularities" in a 2.3 billion U.S. dollar deal which was struck in 2013 by the previous government, to buy 10 Airbus aircrafts.

Wickremesinghe said he would be reviewing this deal. Endit