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The Premier also explained to the House that the Government was faced with no choice but to go ahead with the purchase of four Airbus A350-900 aircraft for SriLankan Airlines, because reneging on the order made by the previous Government would result in Sri Lanka having to pay USD 1.5 million each in demurrages. The Government would have to follow through on the purchases, even though the national carrier was making huge losses, Wickremesinghe explained.
“A350-900 purchase agreements were signed by the previous regime, which lead the company to make a loss. SriLankan was a politically driven company. In 2012 the net loss was Rs.17 billion. It has gone up to Rs.26 billion in 2013. In 2014 the loss was Rs.31 billion. With the oil prices coming down the net loss for 2015 came down to Rs.16 billion,” he told Parliament. Wickremesinghe said the four airbus aircraft will have to be obtained at the full purchased price, with the remaining four being bought on lease, despite the national carrier’s losses. “There was no feasibility study done by the previous Government. They must have expected people to line up in airports to fly in these new aircrafts. Now the FCID is investigating the purchases,” he said.
Guess its a waiting gameComment
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The Premier also explained to the House that the Government was faced with no choice but to go ahead with the purchase of four Airbus A350-900 aircraft for SriLankan Airlines, because reneging on the order made by the previous Government would result in Sri Lanka having to pay USD 1.5 million each in demurrages. The Government would have to follow through on the purchases, even though the national carrier was making huge losses, Wickremesinghe explained.
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Given the list price of A359 being USD 305M and knowing that UL does not get EK style discounts anymore, USD 1.5M each is a very very small price to pay as a penalty.
If UL does not have a business case for A350, why not pay the USD 6M and cancel the order. I expected the penalty to be far far greater than that (at least 20 times larger).
I am not saying USD 6M is chump change, but it is a drop in the ocean in the big scheme if things assuming that UL have to pay close to USD 1B for the 4 A359s. Spending USD 6M now and cutting it lose will be infinitely better than getting stuck with an aircraft that they do not want, for the next 15-20 years and losing hundreds of millions of dollars during its lifetime.Comment
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Why waste 6 million? It would be a better option if Airbus is willing to negotiate to move the deposit to any other aircraft (330 Neo?), the 332s need to be replaced anyways.
Does UL own any aircraft outright now? IIRC all the older ones were sold and leased back and I think the same is happening with the new ones as well even if they are ordered direct from Airbus?Comment
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Can't locate the article that mentioned the deferral - will keep looking. It talked about deferral to early 2017 - so about 6 months.
It does happen that customers don't take delivery as scheduled - new aircraft do end up in temporary storage. Conditions will be agreed between the leasing company and the Airline.
A350 order is al total disaster either way for Sri Lankan taxpayers.
Another day - another Donkey gets appointed.....
Colombo Telegraph may not be the greatest standard of journalism but they are the only paper reporting on the ongoing corruption at the Airline.
Nobody seems interested in running the Airline. What a mess.Always fly a stable approach - it's the only stability you'll find this businessComment
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Lets hope that this guy has some other skills which could be utilised in his new position!
Another day - another Donkey gets appointed.....
Colombo Telegraph may not be the greatest standard of journalism but they are the only paper reporting on the ongoing corruption at the Airline.
Nobody seems interested in running the Airline. What a mess.Comment
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According to local media sources, UL have been trying to re-negotiate with Airbus inorder to convert the order of 8 A359s with small aircraft which could support the short haul network. Does it even makes sense? UL didn't even ordered 8 A359s directly from Airbus.
UL actually had signed the firm-order agreement with Airbus for only 4 A359s and signed the MOU with Aercap for 3 units of A359s on 12 years operating lease. Not sure about the 8th A350. In my humble opinion, If UL doesn't want those 4 A359s they should sell them to some leasing company and lease back the aircraft which could support their current business model. But UL should take delivery of those 3 A359s from Aercap on operating-lease to serve destinations like London, Beijing, Tokyo etc.. UL needs acquire minimum of few more widebody aircraft to replace ageing Six A332 fleet.
UL has to be managed by the Airline Industry Experts not by the Politician' stooges.“They (the previous government) had agreed to buy four A350-900 planes and lease another four,” he said. “We have not paid a deposit, but if we default we have to pay a penalty of $12 million.” “We are stuck. We have to review the deal and take a decision if we are going ahead with the purchase or not.”
No UL doesn't own any aircraft right now. Those new A330-300s were sold and leased back from lessors.
Do you know what registration these 3 A359s going to be receive?Comment
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New dimension plan upswings for Sri Lanka's national carrier to revive the cash-strapped position into a country's top flagship position ,it has been given a opportunity to choose two breakthrough deals with Qatar airways and the Maldives government in the near future, however with the aim of turning SriLankan Airlines into a profit-making venture,Mihin Air would be integrated and the senior management of the Airline has invited the Airline’s staff to share their innovative ideas and the 'Red to Black’ Campaign was initiated to foster closer relationship with the staff thoughts on initiatives that can be taken to reduce losses and optimize cost as the Airline seeks to make progressive steps towards profitability.Comment
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No Dear! Its a hot news.Please check the below link
Hope it helps
cheers
xxComment
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Thanks ! I am not sure how very accurate this reporting is; Maldives does have it's national carrier (though it is mostly regional now).No Dear! Its a hot news.Please check the below link
Hope it helps
cheers
xx
If UL can negotiate 5th freedom flights for other destinations from Maldives in addition to UK it will be good; it seems strange that the Maldivians would want to sign a deal instead of developing their own fledgling airline.
Al Baker didn't want anything to do with UL according to reports when he was invited...Comment
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