SriLankan-Emirates management agreement extension talks on Wednesday

Top level talks between Emirates Airline and the Sri Lankan Government will resume on Wednesday at the Continental Hotel in Colombo, on extending the SriLankan Airline’s management agreement, informed aviation sources said.

They said these talks will take place on the sidelines of the AGM of the national carrier also scheduled to be held at the same venue.

The two sides have already concluded one round of discussions on May 28 in Colombo and have been tight lipped on its outcome. At the last round of talks Emirates was led by its President Tim Clark and was assisted by two other directors, Garry Chapman and Nigel Hopkins, while the Lankan delegation comprised Treasury Secretary P.B. Jayasundera and Presidential Secretary Lalith Weeratunga.Sources said Emirates would be represented by the same team at Wednesday’s talks, but it was not clear whether the Government team will be strengthened with any additional participants.

Dubai Government owned Emirates has a ten year contract ending in March 2008 to manage the country’s national carrier. Coupled with the management deal, the Chandrika Kumaratunga regime also sold a 43 percent equity stake in SriLankan to Emirates in 1998.

The Emirates President is known to drive hard bargains. In 2001 when the UNF regime came to power threatening to review the agreement claiming it was highly disadvantageous to Sri Lanka, Tim Clark bluntly stood his ground insisting that a deal is a deal and the then Government lawyers had to back down.

Already the new budget airline, Mihin Air launched by the Government with much state patronage in March this year appears to have irritated Emirates as it is directly competing with SriLankan on a number of routes all at once, especially in a worldwide climate of depressed returns for most airlines.

Mr. Clark has 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.