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Sri Lanka state airline reviewing Airbus A350 deal; criminal probe on

Feb 10, 2016 18:08 PM GMT+0530 | 6 Comment(s)

  

ECONOMYNEXT - Sri Lanka is reviewing a deal to acquire eight airbus A350 aircraft which was to be deployed on loss-making long haul routes to Europe and criminal probe was ongoing, Prime Minister Ranil Wickremesinghe said.

"We are discussing with Airbus whether the A350s could be changed to aircraft suited for regional routes," Wickremesinghe told parliament.

He said cancelling the order would force state-run SriLankan Airlines to pay a penalty of 1.2 million US dollars per aircraft.

The aircraft was to be deployed on long haul routes to Europe which were all making losses.

SriLankan Airlines officials said at the time that phasing out gas guzzling A340 and A330 aircraft would reduce the cost of long haul routes.

But Prime Minister Ranil Wickremesinghe said there appeared to have been no feasibility study before ordering the aircraft.

Sri Lanka's financial crimes police was probing the deal, he said.

The aircraft were ordered by the regime of ex-President Mahinda Rajapaksa, whose family members were closely involved in running it.

President Maithripala Sirisena cancelled the order for one aircraft which was to have a VIP suite.

He said SriLankan Airlines had lost 17 billion rupees in 2012, 26 billion rupees in 2013, 31 billion rupees in 2014 and 16 billion rupees in 2015 due to lower oil prices.

The airline had been making losses since 2006 when President Rajapaksa took back the privatized airline from Emirates.
 


 

6 Comments

  1. Anh February 11, 05:52 AM

    Sri Lankan airlines is a wrong business model. Wrong process produce wrong out put and results. It has to be business reengineer from Pilot training department to ground handling department. Must increase local pilots intake and hire locals more.Mihin business model is good but no sufficient resources to act independently. If Sri Lankan is making lost mean, it's having more cost for services and how come it makes profit to the Mihin Lanka by integration or collaboration with a wrong business model. Patching is not a soultion.had to understand regional business models and benchmark, If not this will never be a profitable venture with zero fuel price...

  2. Dany February 11, 03:50 AM

    you can't bring airline in to profit by overnight. But the sad part is UL was making money earlier. Th former management of the airline to be blame for all these loses for sure.


    From the year Emirates left Srilankan started making loses and as per my knowledge Emirates was ask to leave. If we can get some good knowledgeable people to run airline i don't think it is impossible. For us the succeed in tourism we need to have good strong airline for the country. I have a strong feeling that we need to do some changes in Colombo Airport as well.

  3. Jayasek February 11, 06:43 AM

    Why SriLankan makes loss despite lower fuel prices is because it cannot compete efficiently. When fuel prices go up they go for all airlines and they impose fuel surcharges. When they take it off SriLankan will also have to take it off. However some of the new aircraft bought by SriLankan higher regional traffic, trimming of European routes may have helped improve profits.Leisure groups like Jetwing have opposed cutting European routes for their own profits adding to the burdens on the poor.

  4. mark February 11, 05:43 AM

    Billions lost. The then government should have channeled the funds for education, job creation and to the health sector. Sri Lanka air line should never be under state control. Running air line business is a very competitive industry and should be handled by the experts of the air line industry not by politicians or their stooges

  5. san February 11, 02:08 AM

    Sill don't understand why they are making loss, Fuel prices are lower, and Emirate air line making money, must be we are paying too much to staff, Just look at how other air lines operating get rid of all unused people, start a service to Sydney..

  6. Nimal February 10, 09:47 AM

    I doubt that the people running the country believe in feasibility studies or consult the taxpayers.

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