Govt. approves Rs. 315 billion deal with Airbus

• Sunday, April 28, 2013
  
  

Ten new aircraft for loss-making SriLankan Airlines, Boeing also seeks share in the pie

The Cabinet has approved a staggering more than two and half billion US dollars (over Rs. 315 billion) for a re-fleeting programme of SriLankan Airlines which is already saddled with severe losses.

The programme, approved on April 18, entails the purchase of six Airbus A 330-300 aircraft with Rolls Royce Trent engines at a cost of US$ 234,389,333 each (or over Rs. 29.5 billion). Also to be purchased are four state-of-the-art Airbus A 350-900 with Rolls Royce XWB engines each costing US 283,308.300 (or over Rs. 35.6 billion).

Besides the prices for the ten new aircraft, the Government will also pay millions of dollars (or billions of rupees) for several other accompanying costs, including purchase of spares for ten years.

On a recommendation made by the Minister of Civil Aviation, Priyankara Jayaratne, the Cabinet has approved an initial US$ 80 million (over Rs. 10 billion) for Sri Lankan Airlines for what is described as “wide-body re-fleeting” in 2013. No details of how this money would be disbursed are explained. It is also not clear how the Government proposes to raise funds for the purchase of the ten new aircraft.

Besides Airbus Industrie, the US-based Boeing also competed for the aircraft deal. The US firm was strongly backed by an important Government personality serving overseas. A Boeing team was also in Colombo to lobby for the purpose.

At present SriLankan Airlines has a fleet of 13 aircraft. Six of them are Airbus A 3240-300 and seven are A 330-200. Whilst the age of the A 340s is between 13 and 18 years, the A 330 fleet, according to Minister Jayaratne is nine to 13 years. �According to the latest report of the Central Bank (2012), SriLankan Airlines suffered an operational loss of Rs 20.5 billion.