SriLankan wants Emirates deal extended


SRI Lankan Airlines hopes a 10-year management agreement with Emirates airline will be extended as the Dubai company’s backing is essential for fleet modernisation and expansion plans, its CEO said.

Chief executive Peter Hill said the Sri Lankan government would hold talks with Emirates this month to discuss whether they want to renew the deal that ends in March 2008.
Sri Lankan Airlines is in talks with Boeing and Airbus to replace aircraft and it would be easier to strike a deal with the support of Emirates, one of the world's fastest growing airlines, he said.
“I'm fairly positive that they (Sri Lankan government) would want to extend that management contract. There's no doubt about it if we were to maintain the existing Emirates relationship, then acquisition of new aircraft will be a lot more affordable because of the prices they (Emirates) are able to negotiate.
'That's why you can see how critical it is to get that decision and time is quite frankly running out. New aircraft don't come off the shelf every 5 minutes.” Hill said in an interview.
The Sri Lankan government owns 51 per cent of the airline while Emirates has a 43.6 per cent stake.
Despite the possibility of a return to civil war and a rise in fuel prices, Sri Lankan Airlines is set to post profits for its financial year ending March, 2006, that would exceed last year's 1.37 billion rupees ($13.42 million), Hill said.
Hill said the Middle East, where the airline flies to eight cities, is key to its plans for a regional Asian hub, as huge projects in the Gulf were attracting mainly Asian labour.