Sunday, 26 May 2024
SriLankan to lease four aircraft to PIA

SriLankan to lease four aircraft to PIA

SriLankan Airlines will lease out four of their newly acquired aircraft to Pakistan International Airlines (PIA) from this year, said Minister of Public Enterprises Development, Kabir Hashim.

Minister Kabir Hashim and Deputy Minister Eran Wickremaratne. Picture by Wimal Karunatilleke

He said that SriLankan Airline team is already in Pakistan negotiating this deal. He said initially one A330 aircraft would be leased out to Pakistan Airlines. “This would be on a wet lease where SriLankan pilots and crew would be operating it.” The aircraft would be mainly used to be operated from London to Lahore and Karachi.

He said that the official is also exploring the safety aspects of the crew. “They are also yet to take a decision on retaining the SriLankan logo in the aircraft or if it should be rebranded as a PIA flight.”

The Minister said that today the national airline has an oversupply of aircraft and this was one reason for them to talk with the PIA. “We will also negotiate with the airline to offer three other brand new aircraft that are due soon to PIA.”

The Minister disclosed that the new aircraft were ordered by the previous management like buying three wheelers from India and the lease deals made were definitely more than 20% of the then market price. “We are now committed to pay US $ 1.4 million a month for these aircraft to the AerCap, company while the industry is leasing them out for amounts of US$ 900,000 to 1,000,000 a month.

“Today SriLankan was paying at least US$ 400,000 dollars (Rs. 58 million) a month extra and we have to continue this for 12 more years.”

He said former President Mahinda Rajapaksa is calling himself a patriot today but by appointing his brother in law Nishantha Wickramasinghe as the Chairman has directly helped the airline to be a major loss making entity.

The Minister recalled that SriLankan was taken over by the government due to a personal dispute the former President had with an Emirates official. “When it was taken over in 2008 the airline was making a profit of Rs. 9.3 billion and in 2014 the loss was Rs 11 billion. In 2015 we managed to bring it down to Rs. 3.7 billion.

Hashim said that the main reason for the national carrier to pull out of Paris, Frankfurt and Rome was due to being unable to face the price war offered by other competitor airlines. “It’s true that tourism may have a negative impact. To compensate this we will deploy more frequencies to the Gulf to take in the traffic to Colombo form these European destinations.”

The Ministry also said that they have called for expressions of interests to offer SriLankan airlines to a foreign player. “We are to get a positive response from any party.”

Asked by Daily News Business if the government would settle all debts and hand over the airline to a new party he said that it may be a strong possibility. The country may even not have the management of the airline,” he said.

Deputy Minister Eran Wickremaratne said the losses of SriLankan were been borne by the ordinary people through their taxes.

Asked to comment on the going probe on past officials he said they were progressing smoothly but would take time. “We will also have a forensic probe on past dealings to bring the culprits to book,” the Minister added.


Last modified on Monday, 25 July 2016 08:24