COLOMBO Sri Lanka has invited bids for state-run carrier SriLankan Airlines as the island nation looks to reduce losses incurred by government-owned enterprises under a $2.9 billion International Monetary Fund (IMF) programme.

The South Asian country secured a staff level IMF agreement on the first review of its bailout recently but it still needs approval from the IMF's Executive Board.

The economy is gradually recovering from a crisis last year caused by record low reserves, leading to sky-rocketing inflation and currency depreciation.

The airline, one of Sri Lanka's biggest loss-making state enterprises, has struggled in recent years with a fall in tourism because of the COVID-19 pandemic and the economic crisis.

The finance ministry posted a notice inviting bids for the airline by Dec. 5. It aims to complete the sale by June.

The government is in the process of restructuring the company's debt, according to the bid notice.

SriLankan Airlines racked up operational losses of $575 million since 2015 but posted an operational profit of $93 million this year, financial information disclosed as part of the bid documents showed.

International Finance Corporation (IFC), a member of the World Bank Group, is the transaction adviser.

The airline operates a fleet of Airbus aircraft on its global route network of 111 destinations in 56 countries.

(Reporting by Tanvi Mehta and Uditha Jayasinghe; editing by Robert Birsel)