Sri Lanka has abandoned plans to sell a 49% stake in its national carrier, SriLankan Airlines, after receiving unsatisfactory offers from foreign entities. Despite this setback, government officials are exploring alternative strategies to attract investors to the financially troubled airline.

A source close to the negotiations stated, "We are looking at an alternate proposal which would still be under the previous plan to invite investors. It’s sensitive at the moment but we hope to announce the new plan in two to three weeks."

Sri Lankan Minister of Ports, Shipping and Aviation Nimal Siripala de Silva confirmed the government's decision to restructure the airline rather than sell it. He said that while only 49% of the airline can be sold to foreign entities under Sri Lankan law, global interest has been minimal.

From April 2022 to March 2023, SriLankan Airlines reported an operating profit of 43.4 billion rupees (US$143 million) but still faces a net carry-forward loss of 71 billion rupees. Despite operating in 62 countries and employing 6,000 staff, the airline remains dependent on government financial support.

The government previously sought bids to rescue the airline in October last year but none were from international carriers. Analysts attribute the lack of interest to the airline's unstable financial situation and the timing of the offer, with upcoming presidential elections in late 2024 adding to investor uncertainty.

Experts suggest that for SriLankan Airlines to attract credible investors, the government must provide a comprehensive risk assessment detailing debt, profitable and unprofitable routes, and potential restructuring plans.