Helitours (Pvt) Ltd, a domestic airline technically independent of the state, and managed by the Sri Lanka Air Force, is to be transformed to a state-owned company to improve its operations and minimise losses, official sources said. In May 2019 the government decided to formalise its status as a state owned company or military-run airline [...]

Business Times

Helitours transformation into a state-owned company runs into a storm

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Helitours (Pvt) Ltd, a domestic airline technically independent of the state, and managed by the Sri Lanka Air Force, is to be transformed to a state-owned company to improve its operations and minimise losses, official sources said.

In May 2019 the government decided to formalise its status as a state owned company or military-run airline from a privately held company using the physical and human resources as well as funds of the Sri Lanka Air Force.

The carrier’s current network of “civil passenger transportation in military aircraft” flights cover services from Colombo Ratmalana to Jaffna via Trincomalee China Bay and Batticaloa via Gal Oya, a senior official of the Civi Aviation Authority told the Business Times.

The airline has two MA60s and one Y12E in its fleet, as well as a number of helicopters and in addition to the fixed wing aircraft facility, Helitours also provides the helicopter transport facilities to passengers as a dominant player in promoting tourism in the country, he said.

Even though action should have been taken to transfer the ownership of Helitours shares to the Treasury Secretary this transformation had not been carried out even by the end of the year 2019/ 2020 under review, a government audit inspection revealed.

The instructions of the Department of Public Enterprises and the recommendations of the Committee on Public Accounts towards the transformation process have not been followed.

Later a decision was taken to review the financial status of the company for identifying a business plan which suits Helitours at an initial meeting between the Director General of the Department of Public Enterprises and the officials of Helitours (Pvt) Ltd.

Accordingly operational functions and the management of Helitours (Pvt) Ltd is to be retained with the Board of Directors of Sri Lanka Air Force for the time being, a senior Treasury official said adding that a Treasury official has been appointed as a director of the company.

An agreement has been reached as a temporary arrangement between Sri Lanka Air Force and Helitours (Pvt) Ltd to obtain aircrafts on lease basis.

Accounting all maintenance expenditures and all movable and unmovable assets (including human resources) of Helitours (Pvt) Ltd and allocating a percentage of income of Helitours (Pvt) Ltd will be made to the public account and for welfare activities of Sri Lanka Air Force, he said.

The company had made a profit of Rs. 57.4 million for a period of 10 years from 2010 to 2019, the government audit report confirmed.

However income earned by hiring aircrafts amounting to Rs. 13.17 million by the Sri Lanka Air Force had been in arrears even by the end of the year 2019/2020 under review, the report observed.

Revenue arrears of Rs. 10.82 million out of those arrears of Rs. 13.17 million had remained during the last 15 years, the audit inspection revealed.

Helitours is in operation in accordance with the civil aviation regulations applicable to civil airline operators and has been issued with an Air operating Certificate (AOC) by the Civil Aviation Authority of Sri Lanka (CAASL).

The company is not only in compliance with the mandatory requirement of insuring passengers but is also subject to periodic audits by the CAASL. It has even been certified for off-shore operations on successful completion of safety audits which meet the stringent guidelines stipulated by the Oil and Gas Producers (OGP) organisation, a top official of the company said.

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