Why a Russian investor needs SriLankan Airlines

Sunset in Colombo. Photo by © Aviation of Russia

On April 2, a brief report appeared in RIA Novosti about the possible sale of SriLankan Airlines to a Russian investor. Sri Lanka’s Minister of Transport Bandula Gunawardana stated this in an interview with the agency.

Lankan experts in one of the social networks say that the airline will and must be sold, because it makes huge losses and is a heavy burden on taxpayers, the economy and the country as a whole. Its accumulated losses amount to over LKK 600 billion (~1.9 billion USD), mainly due to mismanagement, inefficiency, corruption and political influence. However, the Sri Lankan government has not given details of how the airline will be sold and has not announced a tender to find a buyer.

We asked Oleg Evdokimov, general director of ATEO air, who is an expert in the Middle East and Indian Ocean region aviation market, to comment on reports about the possible sale of the Lankan airline.

During his recent stay in Colombo, he said, partnership options were being considered. “I recently spent 12 days in Colombo and I can confirm that we are considering such an option and working on it. I’m sure it will take less than a year to make it profitable. Co-investors are welcome,” said Oleg Evdokimov.

At the same time the expert did not name possible investors, citing the early stage of negotiations and trade secrets.

The famous and endlessly repeated question: “Are you going to promote Superjets again?” was answered in the affirmative.

“Any competent economist knows that the key success factor for any airline is the aircraft utilization factor and the SuperJets have an optimum utilization factor,” added our interlocutor.

SSJ100 aircraft which are not produced in Russia anymore can be delivered to SriLankan Airlines from the United Arab Emirates which, as informed earlier, is going to build a factory for this regional aircraft production.