Govt. – Airbus in talks to cancel SriLankan orders

In a bid to avoid future losses at the cash-strapped national carrier, the government has ‘laid-off ’ one of the eight aircraft ordered from Airbus with three more tipped to be cancelled.

SriLankan Airlines had ordered eight A350-900 wide bodied aircraft with a flying time that could go upto 19 hours, which the government has shot down as it is not required for the carrier under the present circumstances, Public Enterprises Development Ministry Deputy Minister Eran Wickramaratne told the Business Times on Thursday. These were ordered during the previous regime, some of which were ordered in 2013.

He noted that the strategy of the airline is that it would not need those aircraft which were new leases made at very high rates. “If we run it then it will be a loss,” the minister said.

The aircraft on order is the all new mid size long range product line comprising three versions and seating between 270 and 350 passengers in spacious three-class layouts, a media release issued by Airbus has stated on the order made by the national carrier.

With four aircraft scheduled to be delivered immediately, Minister Wickramaratne said that the government had already laid-off one such aircraft and paid a penalty for it.

The government is in negotiation with Airbus on the three other aircrafts that would also be cancelled; the minister said noting that the state would “try to lay them off as well.”

The balance four aircrafts on order were set to be worked out in future as the delivery date of these were scheduled for the “distant future,” Minister Wickramaratne explained.

He also said that the ministry is currently involved in restructuring the balance sheet of the national carrier and will be working on making the “bride” look as beautiful as possible to be given away.

He noted that in this regard, the government would be ready to take on “some of the debt” and hand over management of the airline completely to the new partner once selected.