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06 December 2023

Sri Lanka may buy Emirates' stake in airline

By Agencies


Sri Lanka may consider buying out Emirates airlines' stake in flagship carrier SriLankan Airlines, the government said on Wednesday, but added that no decision had been made.

Management of SriLankan Airlines will revert to the government on April 1 after Dubai-based Emirates said on Sunday it had declined to renew a 10-year management contract of the airline, saying the state was seeking greater control of day-to-day operations.

Emirates says it is interested in selling its 43.6 percent stake in SriLankan Airlines, and is seeking around $150 million (Dh547.5 million) for it.

"The government itself may consider the government taking over the (stake), or various other options," Treasury Secretary P.B. Jayasundara told a news conference.

"None of those decisions have been made. We do not think they will sell in the first place," he added. "No decision has been made other than two shareholders working towards a new management structure."

Jayasundara said Emirates and the government would spend the next three months working together on a management handover. The state already owns 51 per cent of the airline, with the balance owned by members of staff.

The Sri Lankan government last month cancelled the work permit of SriLankan Chief Executive Officer Peter Hill, who was seconded from Emirates, after the carrier refused seats to President Mahinda Rajapaksa's 35-strong entourage.

Rajapaksa went on a private visit to the United Kingdom to watch his son's graduation from a naval college but couldn't get a place on the SriLankan Airlines flight home because of heavy holiday traffic.

The government said the airline had misled it, and had promised seats would be available, which SriLankan officials deny.

Emirates had in September expected to renew its management contract for at least another five years and wanted to double the carrier's fleet to as many as 30 aircraft.

Emirates paid $70 million (Dh255.5 million) for the stake in SriLankan, its only investment in another carrier. (