Thursday, August 17, 2023

SriLankan wants Emirates, Air India to buy them after first profit in 15 years

Colombo: CEO Richard Nuttall, SriLankan Airlines (UL), said its poised for privatization and having achieved an operating profit for the first time in 15 years, could become an attractive acquisition target for Gulf-based airlines such as Emirates (EK) and Indian Carrier Air India (AI).

Nuttall indicated that carriers from the Gulf region could capitalize on the airline’s favorable position among its neighboring Asian countries. He told this to The National.

Among the potential contenders, Nuttall suggested that Emirates, which formerly held a 40 percent stake in SriLankan Airlines, might consider responding to the Sri Lankan government’s intention to privatize the airline.

Emirates held partial ownership of SriLankan Airlines for a decade until the Sri Lankan government acquired all the airline’s shares in 2008. During that year, SriLankan reported a profit of approximately $30 million. However, under government management over the subsequent seven years, the airline incurred losses amounting to $875 million.

When questioned about the potential involvement of Dubai-based Emirates in the bidding process, Nuttall clarified that he could not speculate on the intentions of Emirates or other entities from the Gulf. He mentioned that the government’s approach is to seek expressions of interest within the next few months, and they are aiming for an expedited process.

SriLankan Airlines has faced a triple blow due to the impact of the Covid-19 pandemic, the coordinated Easter suicide bombings in 2019 by Isis, and the financial disruptions experienced last year. In spite of these challenges, Nuttall, who possesses experience with eight different airlines, has led the company to achieve an operating profit. This profit could have been notably substantial if not for the inherited debts.

“With a turnover of $1 billion, the business generated a profit of $100 million. However, a major portion of this profit had to be allocated to cover finance charges.” He further emphasized the airline’s operational efficiency, expressing optimism that it will eventually become a profitable venture.

17/08/2023 Daily News

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