Deal with Emirates up for renewal

Last Monday’s top level talks between Emirates Airline and the Sri Lankan Government delegation in Colombo on extending the SriLankan Airlines management agreement had not created any animosity between the two sides as earlier feared, well placed aviation sources said.

They said the two sides had agreed to meet again in Colombo for follow up talks on August 8, the day of the AGM of SriLankan.
The Emirates delegation at last Monday’s talks was led by its President Tim Clark and he was assisted by two other directors, Garry Chapman and Nigel Hopkins. The Government delegation comprised Treasury Secretary Dr P.B. Jayasundera and Secretary to the President Lalith Weeratunga.

Both sides however have chosen to keep mum on the details. The Emirates delegation had left Colombo without holding any briefing for the local media. Dr Jayasundera and Mr. Weeratunga could not be reached for any comment.

Dubai Government owned Emirates has a ten year contract ending in March 2008 to manage the country’s national carrier. It is not clear for how long the renewal of the management contract would be this time or on what new terms.

Coupled with the management deal, the Chandrika Kumaratunga regime also sold a 43 percent equity stake in SriLankan to Emirates in 1998.

In 2001 the UNF regime came to power threatening to review the agreement claiming it was highly disadvantageous to Sri Lanka, but Emirates president Tim Clark bluntly stood his ground insisting that a deal was a deal and the Government lawyers had to back down.

In the run-up to Monday’s talks, there were fears of acrimony as it was rumoured that the Government delegation would include Sachin Vaas Gunawardena, the head of Mihin Air, which is seen as a potential rival by Emirates.

Mr. Clark had already been quoted as stating that the Government’s creation of the new airline, Mihin Air was an issue for Emirates and that it was up to the Sri Lankan Government struggling to cope with the intensifying separatist war, to persuade the West Asian airline to continue the management arrangement.