Sri Lankan Airlines struggles against economic crisis and defaults on bond, plans for privatization in the works
State-owned Sri Lankan Airlines is facing significant challenges amidst the ongoing COVID-19 pandemic and economic crisis in its home country. The airline industry as a whole has struggled due to countries closing their borders and soaring fuel prices as a result of the Ukraine conflict. Richard Nuttall, the British-born CEO of Sri Lankan Airlines, shared his plans to turn the company around with the BBC. Nuttall, who has decades of experience in the airline industry, including working with Cathay Pacific and Philippines Airlines, joined the company as chief commercial officer in November 2021 and became CEO in April 2022.
Despite hopes for a recovery in passenger numbers, Sri Lankan Airlines has been affected by the deepening economic problems in the country. In February 2023, the airline defaulted on a $175 million bond, as it was unable to meet interest payments due at the end of the year. As part of a plan to rebuild its economy, the Sri Lankan government aims to privatize Sri Lankan Airlines and raise funds. While Nuttall is not against selling off the business, he highlighted that restructuring its debt is crucial before that can happen.