More benefits to Lanka sought from Emirates

Uditha Kumarasinghe, Irangika Range and Sandasen Marasinghe

Chief Government Whip Minister Jeyaraj Fernandopulle yesterday told Parliament that the Government will have to take alternative measures if Dubai-based Emirates does not agree to amend the agreement with SriLankan Airlines to provide more benefits to Sri Lanka.

The Government will submit these proposals to Emirates through a special committee appointed by the Cabinet. Discussions are being conducted in this regard, he said.

The Minister made these remarks in response to an oral question raised by JVP MP Vijitha Herath.

According to the agreement signed between SriLankan Airlines and Emirates, 43 per cent shares and 100 per cent administration of Sri Lankan Airlines have been vested with Emirates.

"Therefore, discussions are underway to change this agreement. The term of the agreement signed between the two companies will end in March next year," the Minister said.

He said the Government's intention is to submit proposals to Emirates which are more beneficial to the country. SriLankan Airlines Chief Peter Hill on Tuesday said it wanted a new management contract to be signed soon with Dubai-owned Emirates.

The Government is holding another meeting on January 8 with Emirates to discuss the renewal of the 10-year management contract of SriLankan Airlines.

The Sri Lankan national carrier, in which Emirates holds a 43.6 per cent stake, needs a decision to push ahead with its business plans, he said.

SriLankan Airlines, formerly known as Air Lanka, entered into the strategic partnership with Emirates in 1998 in which the Government retained a majority stake. Media reports say the Government wants a bigger role in managing the carrier. SriLankan Airlines Group posted a post-tax profit of Rs.862.18 million for the financial year to March 31, 2007.

SriLankan operates to nearly 30 destinations and recently became the first foreign carrier to operate more than 100 flights per week to India.