SriLankan finalizes A321neo leases with AerCap, ALC

The new government of Sri Lanka will not seek to privatise SriLankan Airlines (UL, Colombo Int'l), Minister of Industry, Export, Investment Promotion, Tourism and Civil Aviation, Prasanna Ranatunga, said while visiting the flag carrier's maintenance facilities.

Ranatunga appealed to management and labour unions at the airport not to repeat the mistakes committed under the previous government which took the carrier to the brink of collapse, the state-owned News.lk portal said.

Ranatunga took office as a member of Prime Minister Mahinda Rajapaksa's cabinet following the election of his brother, Gotabaya Rajapaksa, as President during the November 2019 polls.

The Sri Lankan flag carrier has been wholly-owned by the government since 2008, when Emirates (EK, Dubai Int'l) sold its 43.6% stake back to the state. In 2017, US-based investment firm Texas Pacific Group (TPG) was in talks to acquire a 49% stake but pulled out after a due diligence revealed the true extent of the airline's debts. The previous government had floated divestment in 2018 and 2019 but ultimately did not launch any formal sale...

SriLankan Airlines (UL, Colombo Int'l) will finally retrofit one of its seven A330-200s, 4R-ALS (msn 1008), in order to standardize its cabin in line with the rest of the carrier's A330-200 longhaul fleet, The Sunday Morning newspaper has reported.

"The seats have been ordered for the refurbishment of the cabin and we expect the seats to arrive in about four to five months. Once the seats arrive, we will immediately refurbish and fit the necessary seats, and then it will be operational for long-haul flights," Chief Executive Officer Vipula Gunatilleka said.

He added that the retrofit is expected to take place within the next six months.

SriLankan leased the 10.8-year-old widebody from AerCap in 2017 as a settlement in lieu of the cancellation of an order for four new A350-900s. However, as it is configured with 288 economy class seats (against the 251-256 on the other five A330-200s operated by the airline) and 42 business class seats (against 18 on the other aircraft), its usage has always been cumbersome for the airline....

SriLankan Airlines (UL, Colombo Int'l) violated government procurement guidelines by ordering ten Airbus widebodies and agreeing to lease a further four without due cost-benefit analysis, the Lankan Auditor General said in a special report.

"It was not confirmed that the Management had made above decisions [to add the A330 and A350 widebodies] after making comprehensive cost-benefit analysis on the contribution, which can be made to the profit of the Company by way of running aircraft on relevant air routes, which were to be added to the fleet bearing a huge cost," the audit report said.

According to the audit, the airline selected Seabury as the consultant without formally soliciting comparable proposals from all consultants, without ensuring confidentiality of proposals, and with multiple other procedural errors.

In 2017, the Office of the Auditor General was requested by the parliamentary Committee on Public Enterprises to evaluate the flag carrier's fleet decisions.

The audit concerned an order placed in 2013, wherein SriLankan Airlines committed to buy six A330-300s at USD104.4 million each and four A350-900...

As it posted a first-half net loss trimmed by 11.6% year-on-year to USD76 million, SriLankan Airlines (UL, Colombo Int'l) said in a statement posted on its website that it was forging ahead with its turnaround plan.

The airline said it would expand its presence in the Australian market with a new route to Sydney Kingsford Smith in 2020, launch a new service to Ho Chi Minh City, and continue to plot a return to Frankfurt Int'l and Paris CDG.

The cut in losses was achieved despite an overall decline in passenger and cargo revenue following the Easter Sunday terror attacks. However, revenue in the second half of the year "is projected to increase significantly with the enhancement in operations by SriLankan and customer airlines", the carrier said.

The decline in revenue was offset by a greater reduction in operating expenditure due to cost-saving initiatives, as it relocated its corporate offices in Colombo to existing space in Katunayake, the site of Colombo Int'l Airport. Negotiations with state banks to reduce interest...