A330 air bus deal sends SriLankan Airlines into a tailspin
Debt-ridden national carrier SriLankan Airlines has been sent into a tailspin following the almost, near-crash of its much hyped A 330 air bus deal with Pakistan Airlines (PIA).
After five months of the A 330 Aircraft wet lease to PIA., SriLankan Airlines is being pushed to a precarious situation as a result of PIA’s insistence to reduce the lease payment rate or else take back the A 330 already leased out to them in August last year.
During the past two months, the top management of the two airlines has been repeatedly engaged in exchanging letters to find a way out for the lease payment issue with PIA insisting a rate discount for the A 330 Aircraft wet lease, a top state official involved in the deal in an administrative capacity told the Business Times. High level talks to arrive at a settlement on the aircraft deal stalemate between PIA and Sri Lankan Airlines took place in Dubai last week, he disclosed.
The SriLankan Airlines official delegation led by its chairman Ajith N. Dias had said it would consider a reduction in the wet lease payment rate during the talks, he said.
But in a surprise move on Friday, PIA called for bids from international airlines issuing bid documents to lease out aircraft to strengthen its fleet.
“This came just like a knight’s final move in chess to checkmate the island nation’s national carrier, as it has given the final option for the Sri Lankan Airlines to agree on discount rates or submit fresh bids or take back the already leased out aircraft canceling the three A330 deal,” an expert in the aviation field told the Business Times.
“SriLankan is charging PIA a rate of US$ 8100 per hour under the lease agreement which is a hefty amount,” he said adding that it will have to come down drastically as the normal rate is about $6000 per hour.
When contacted via an email query, national carrier CEO Suren Ratwatte responded saying, “We don’t comment on on-going commercial agreements”.
If PIA takes a decision to return the aircraft already leased out by them while canceling the acquisition of the other two aircraft, Sri Lankan Airlines will have to ground all the three incurring heavy losses, an aviation expert said.
PIA had agreed to acquire three Airbus A330 aircraft from Sri Lankan Airlines on a wet lease last year.
Aviation experts said that the 6-month lease term ends on February 10.
The first aircraft acquired by them is being used for the Islamabad-London ‘Premier Service’, since its inauguration by Prime Minister Nawaz Sharif on August 14 in 2016.
The airline is facing severe financial difficulties and is struggling even to pay salaries of the staff. PIA, which has been a loss-making entity in recent times, came under criticism by its board of directors for spending extra on the new aircraft from SriLankan.