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SriLankan to bear leasing costs of new aircraft

13 Nov 2022

  • Requests Govt. greenlight to lease 11 new aircraft
By Tanya Shan The cost for the leasing of 11 new aircraft required by the National Carrier will be borne entirely by SriLankan Airlines, according to the airline. An airline spokesperson confirmed to The Sunday Morning Business that SriLankan had presented a Request For Proposal (RFP) seeking to lease 11 new aircraft as some of the existing aircraft would be retiring from the lease programme by 2024.  “As a compromise, we have requested new aircraft and the Government is looking into this. Hopefully, we will receive approval soon. Whatever the cost, it will be borne by SriLankan and no money will be taken from outsiders,” the spokesperson said.  Speaking in an interview with media agency Aviation Week at the CAPA Asia Aviation Summit held in Singapore recently, SriLankan Airlines Chief Executive Officer Richard Nuttall said that the airline was close to getting Government approval to approach the leasing market for aircraft, which would address the airline’s short-term fleet needs. SriLankan has a current fleet of 24 aircraft. According to Nuttall, seven aircraft are set to leave the airline next year due to the completion of their rental period. The airline wishes to attain a fleet size of about 35 aircraft by 2025-2026 to keep up with the growing business expected in the next few years. In April, SriLankan Airlines issued an RFP to lease 21 aircraft, aiming to achieve an aircraft fleet of 35 by 2025, but was advised by the Committee on Public Enterprises (COPE) to delay plans to lease aircraft by three months to allow its plans to undergo greater scrutiny. In May, the airline said that it would be ideal if the procurement process progressed to the level of decision-making by October 2022, noting that the failure to do so may result in the cancellation of several routes from March 2023 onwards and the contraction of revenue. Moreover, the airline said that the downgrade of Sri Lanka’s ratings to default levels in April was likely to result in potential lessors adding a risk premium to pricing levels in the market. It is nevertheless likely that lease costs inclusive of such premium would remain more favourable than lease rates paid by the airline at present. Meanwhile, SriLankan Airlines Chairman Ashok Pathirage told media agency Simple Flying on 4 November that the airline did not have plans to go for a large, long-term aircraft order at the moment.  “We will evaluate all viable options and decide on the most feasible plan for the future of the airline’s fleet,” he added.  


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