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SriLankan fleet expansion: COPE to summon airline for explanation

16 Apr 2022

By Skandha Gunasekara The Parliamentary Committee on Public Enterprises (COPE) yesterday (16) said that it would summon the Board of the loss-making SriLankan Airlines to review its proposal of leasing 21 aircraft. Speaking to The Sunday Morning, COPE Chairman Professor Charitha Herath expressed concern about the timing of the planned investment by the National Airline, which has over the years incurred millions of dollars of losses, straining State banks and draining much-needed forex reserves. “I don’t think this is the correct time for them to go for this kind of huge investment. COPE is planning to relook at SriLankan’s situation. We will summon them soon to inquire what the proposal is about,” Herath said. He added: “I will also ask the Auditor General to look at the financial reports of the previous year and last few months of this year of SriLankan Airlines.”  Earlier, the COPE Chair had tweeted saying that it was laughable that SriLankan Airlines had published the advert to lease the aircrafts at this time: “It is an utter joke to publish such a notice by a State-Owned Enterprise which is already making huge losses @flysrilankan,” he tweeted. When reached on the matter, the United National Party (UNP) charged that there could be attempts to scam money via the proposal by SriLankan Airlines to lease 21 aircraft while economic experts asserted that funding would not be available for the deal. Advocata Institute Chief Operating Officer and economist Dhananath Fernando said that it was unlikely that SriLankan Airlines would be able to borrow the necessary finances to carry out the leases. “They’re trying to lease aeroplanes but I don’t think that will happen because our credit ratings have been downgraded, including that of banks. I don’t think they’ll be able to borrow money to pay those leases.” Meanwhile, SriLankan Airlines in a statement on its official Twitter account explained the reasons for the lease proposal. “All SriLankan Airlines aircraft are leased – these leases will be expiring over the next few years and aircrafts need to be returned to lessors. Replacement leases can be taken at significantly more favourable market rates. An RFP has been floated to gather proposals from established aircraft lessors on a transparent basis for used (not new) fuel-efficient aircraft. This exercise is targeting an overall reduction in the airline's cost structure, continuing the cost restructuring carried out successfully over the last two years. The number of aircraft sought to be replaced over several years is 21 and not 42 as incorrectly reported,” the statement read.     


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