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SriLankan Airlines going ahead with re-fleeting subject to COPE request
SriLankan Airlines will go ahead with its re-fleeting plans subject to a three-month delay as requested by the Parliamentary Committee on Public Enterprise (COPE) in view of the country’s economic situation, Chairman Ashok Pathirage said yesterday.
The lease agreements on nine of its aircraft will expire by the end of 2023, he pointed out. The national carrier recently issued requests for proposal (RFPs) to lease up to 21 aircraft, reportedly to support its long-term business strategy. It included two RFPs covering existing fleet types (A320 and A330 family aircraft) and two parallel RFPs to compare with alternative aircraft types.
“Roughly 60 percent of the planned aircraft will be fleet replacement, and the remainder will be to support the airline’s expansion strategy and meet the growing demand for air travel between Sri Lanka and the world,” a statement from the airline said.
But the development has been sharply criticised on the grounds that Sri Lanka is facing its worst economic crisis in decades. On Monday, it was taken up before the COPE committee in a meeting that lasted nearly three hours.
Asked whether SriLankan would still lease all 21 aircraft or stick with the nine that would be returned next year, Mr Pathirage said, “It all depends on the pricing and what’s on offer. This is (phased out) till 2025. We are not taking all at once. And these are not new, they are used, second-hand. This whole exercise [RFPs] is to understand what’s out there and pricing.”
The Chairman reiterated that SriLankan would not use Government funds: “It will be all airline funds and on lease. We need to replace about 11 aircraft but if the pricing is good, we will take more and cover more routes.”
COPE Chairman Charitha Herath after the proceedings recommended that SriLankan should postpone the procurement process for three months. “Accordingly, in view of the prevailing economic situation, the entire process should be reviewed and it should be ascertained whether the relevant procurement process is in line with the proper methodology,” according to a statement issued by the Committee. This advice was conveyed to the Secretaries to the Ministry of Tourism and the State Ministry of Aviation and Export Zones Development.
“Further, the COPE Chairman also recommended that a procurement guideline be duly prepared and submitted to the Cabinet through the Cabinet Minister for the relevant procurement as a Cabinet decision,” it said.
| Talks with Airbus on $ 1b claim SriLankan Airlines Chairman Ashok Pathirage said this week that negotiations with Airbus on a US$ 1bn claim over damages, loss of reputation as well as reimbursement of costs and interests has “progressed very well”. The national carrier sued Airbus last year following information revealed in a judgment of the Crown Court of the United Kingdom approving the Deferred Prosecution Agreement between Britain’s Serious Fraud Office and Airbus SE. SriLankan has demanded the cancellation of the purchase agreement for four A350900 aircraft, among other claims. England’s High Court in 2020 fined Airbus a record £3bn in penalties for paying huge bribes on an “endemic” basis to land contracts in 20 countries. One is Sri Lanka and involves the purchase of six A330 and four A350 airbuses and the lease of four other planes in deals agreed to between 2012 and 2013. The Yahapalanaya regime subsequently paid a US$ 98mn penalty for canceling the four Airbus A350s. In SriLankan Airlines’ claim against Airbus, it maintained that the deal was null and void as a bribe was paid, Mr Pathirage said. “The Airbus negotiations (are taking place) at a high level,” he revealed to COPE on Monday. “At the moment, Airbus has agreed to sit and talk with us so probably we feel there’s a settlement but we don’t know what it is. We are handling that in a very professional manner. We have got two quantum experts to support us overseas, to quantify our claim and to come back to us on practically how much we could expect out of this.” Among what SriLankan has demanded is to wipe out the US$98 million cancellation penalty. “We feel the deal was null and void because they [Airbus] paid a bribe,” Mr Pathirage said. “That is an accepted thing in the UK court. I think we feel there is a real claim there and Airbus is also coming to the table to discuss.” | |
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