Colombo eyes Emirates' stake in SriLankan

The Sri Lankan government owns 51% of its national carrier while the Emirates has 43.6 % stake in it. (AFP)

The Sri Lanka Government has initiated talks with Emirates to buy Dubai-based carrier's stake in SriLankan Airlines, according to Emirates' President Tim Clark.

After Emirates decided in March 2008 not to renew its 10-year long management contract with Sri Lanka's national carrier, it has been contemplating selling its 43.6 per cent stake in SriLankan Airlines in part or full.

"The Sri Lankan government has put out feelers that they would be interested in buying the stake. But that's all. We have had this stake up for sale since

March 2008. And we have always been open to selling it. Nothing has changed there," Clark told Emirates Business.

Asked if Emirates would consider the deal, he said: "If the price is right, we would be willing to consider it", without elaborating on what the right price would be.

He added that talks were "not in advanced stages".

The Sri Lankan Government, which currently owns 51 per cent of the airline, took over its management in April 2008, at which point Emirates had valued the stake at about $150 million (Dh550.5m). Emirates had bought a 40 per cent stake in the Colombo-based carrier in 1998 for $70m. SriLankan Airlines' Chairman Nishanta Wickremasinghe said yesterday that the Sri Lankan Government has decided to purchase the stake Emirates currently holds in Sri Lanka's national carrier, and that the two parties were "negotiating" the deal, as quoted by Bloomberg.

Meanwhile, SriLankan Airlines slumped to a loss of $87m in the year ended March 2009, as tourist arrivals dropped significantly owing to the economic slowdown.

The airline broke even in December 2009 and fills an average of 70 per cent of its capacity, the Bloomberg report stated, quoting SriLankan Airlines' Chief Executive Officer Manoj Gunawardena. Also, the Middle East tourist arrivals to Sri Lanka surged 50 per cent in January 2010 compared to the same period last year, the Middle East office of the Sri Lanka Tourism Promotion Board, said on Tuesday, adding that the strongest growth was registered from the UAE – up by 164 per cent.

 

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