The government of Sri Lanka has approved a proposal for state-owned commercial banks, Bank of Ceylon and the People's Bank, to provide guarantees for letters of credit (L/Cs) required by Sri Lankan Airlines.

Sri Lankan Airlines has said it requires the L/C guarantee facility so that it can continue its services without interruption.

Additional credit

By using the facility, the airline should be able to obtain US$205.38 million in loans.

Additionally, Sri Lankan Airlines expects to borrow 27.6 billion Sri Lankan rupees, the equivalent of around US$152 million.

State support

The Sri Lankan government has previously supported the state-owned flag carrier by approving at least ten guarantee facilities.

Industrial Export, Investment Promotion, Tourism and Aviation Minister Prasanna Ranatunga said the latest facility is noticeably needed at the moment because the coronavirus outbreak "proved Sri Lanka's need to maintain a national airline".

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.