Sri Lanka Prime Minister proposes selling off flag carrier

COLOMBO: Sri Lanka's new Prime Minister Ranil Wickremesinghe has proposed selling off the state-owned Sri Lankan Airlines as part of efforts to stabilise the island nation's finances amid the ongoing economic crisis.

In a televised address to the nation on Monday night, Wickremesinghe said, "I propose to privatise Sri Lankan Airlines which is incurring extensive losses. The loss for the year 2020-2021 alone amounts to 45 billion LKR ($129.5 million). By March 31, 2021, the total loss was at 372 billion LKR.

"Even if we privatise Sri Lankan Airlines, this is a loss that we must bear. You must be aware that this is a loss that must be borne even by the poor people of this country who have never stepped on an airplane."

As the country is facing the worst economic crisis since gaining independence in 1948, the Prime Minister said that the "next couple of months will be the most difficult ones in the lives of all citizens and the country must prepare to make some sacrifices and face the challenges of this period", reports Daily Mirror.

He said the country, which also witnessed bouts of massive violence last week which led to the killing of nine people and the resignation of former Prime Mahinda Rajapaksa, urgently needs $75 million of foreign currency in the next few days to pay for essential imports.

As the country is also facing a severe fuel shortage, Wickremesinghe, who assumed office on May 12, said that at the moment, "we only have petrol stocks for a single day".

"Due to the diesel shipment that arrived yesterday (Sunday), the lack of diesel will be resolved to some extent. Under the Indian credit line, two more diesel shipments are due to arrive on May 18 and June 1. In addition, two petrol shipments are expected on May 18 and 28."

Wickremesinghe said the country's central bank would have to print money to help meet the government's wage bill and other commitments.

"Against my own wishes, I am compelled to permit printing money in order to pay state-sector employees and to pay for essential goods and services. However, we must remember that printing money leads to the depreciation of the rupee," he said.

The island nation's economy has been hit hard by the Covid-19 pandemic, rising energy prices, and populist tax cuts. A chronic shortage of foreign currency and soaring inflation had led to a severe shortage of medicines, fuel and other essentials.

In recent weeks, there have been large, violent, protests against President Gotabaya Rajapaksa and his family.