Dubai: Colombo is looking to buy back from Emirates its share in its national carrier SriLankan Airlines.
"Emirates can confirm that the Sri Lankan Government has been investigating the possibility of increasing their share in SriLankan Airlines," Emirates said in a statement Wednesday.
Emirates ended its 10-year management contract with the Sri Lankan government in 2008, but kept its 43.6 per cent equity stake. Bought in 1998 for $70 million, the airline said the value had jumped to $150 million at the end of the term.
The government currently owns a 51 per cent stake.
Under the partnership agreement, Emirates made all the management decisions. The contract also included exclusive rights for ground handling and airline catering at Colmbo-Bandaranaike airport.
Under Emirates' management, SriLankan bought six Airbus A330-200s and upgraded its A340 fleet to a two-class configuration of business and economy.
Close to the end of the contract, the Sri Lankan government cancelled the work permit of the airline's Chief Executive, Peter Hill, over a dispute involving seats for President Mahinda Rajapakse on a London-Colombo flight.
Contract termination
While Emirates supported Hill's decision, it did not renew the contract. It cited the government's desire to seek greater control of SriLankan as the reason.
The government has since taken over the running of the airline and is now looking for a higher percentage of ownership.
SriLankan slumped to a loss of Rs10 billion (Dh319.3 million) in the year ended March, hurt by dwindling tourist arrivals and the global recession. In recent years, the airline has been hit by terror attacks that destroyed four of its aircraft and damaged two others.
Tourist arrivals in Sri Lanka have increased since last June, a month after the government crushed the Liberation Tigers of Tamil Eelam. That has helped the company recoup some losses, according to Chief Executive Manoj Gunawardena.
— With inputs from Bloomberg
