Loss-making Srilankan seeks foreign partner

Sri Lanka is seeking foreign assistance to rescue its loss-making national carrier, a minister said Thursday, after the government announced the airline was unable to pay back nearly $1 billion in debt.

The country cannot afford to bear SriLankan Airlines' losses of 128 billion Sri Lankan rupees ($872 million) on top of its massive debt, International Trade Minister Sujeewa Senasinghe told reporters in Colombo.

The airline owes at least $933 million but the government last week said the true figure could be much higher.

"We want to restructure SriLankan (Airlines) with either direct foreign capital or through a management agreement with a foreign airline," Senasinghe said.

He added that he hopes the process will be completed within "two to three months".

Official sources said Colombo was in talks with a Middle Eastern carrier to form an agreement that would see the airline hand over control of its management to a foreign carrier.

A previous management deal with Emirates was ended in 2008 by the former Sri Lankan government following a personal disagreement between the flag carrier and then-president Mahinda Rajapakse.

(AFP)