SriLankan Airlines this week finally completed a deal to buy a 44% stake held by Emirates in the national carrier and is now steaming ahead with a new business plan to take the airline forward.
The Treasury paid $53 million for the stake, taking full control of the airline, officials said. The transaction came amidst complaints of delays in several flights last week. “I was delayed for several hours going out and coming in,” one passenger said, adding: “I fly SriLankan because I want our airline to prosper but these delays are not good for foreign passengers.”
Manoj Gunawardene, SriLankan Airlines CEO acknowledged the flight delays saying it was due to the delay in a new aircraft being added to the fleet. An A320 was joining the fleet on July 1 essentially to fly on the Shanghai and Milan routes (which had already begun operating) but this got delayed due to technical issues. The problem has been solved and the aircraft is ready for take-off, he said.
This week’s purchase of the Emirates stake ends a relationship with the Middle Eastern airline which began in 1998.
Mr Gunawardene said the government is embarking on a financial and strategic restructuring with a business plan that has been prepared by a team from SriLankan Airlines steered by the Treasury. The team has been working on this since January this year and has also consulted other stakeholders like hotels and travel operators to look at long term needs.
The plan looks at the structure of airline and business, future capitalization, fleet planning and route planning. The plan has a strong focus on creating a regional hub in Sri Lanka.
He said the airline also wants to develop a regional centre for maintainance – repairs and overhaul, and specialised training.
On the long term, the plan is to re-fleet and expand by 2015 with the infusion of new equity which the government has to decide whether it would come from the Treasury or outside.
Mr Goonawardene could not give any figures of the investment needed for the long-term. The airline – with the inclusion of the new aircraft – now has a total of 13 planes: Five A330s, five A340s and three A 320s.
Referring to Emirates involvement in the airline since it didn’t renew the management contract in 2008, he said three Emirates representatives on the board resigned in end 2008-early 2009 while a representative has been present at the AGM’s since then. There has been no other contact or deals with Emirates. |
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