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.