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The
move comes as the government is in the process of finalizing a
partner to revive the national carrier. It canceled four of
eight A350 aircraft orders with Airbus Group SE <AIR.PA>.
"The cost will be $170 million for the cancellation and it will
be paid for AerCap," the finance minister told Reuters.
Karunanayake later told the parliament that the state-run Sri
Lankan Airlines do not require A350s as its longest flight time
is around 10 hours.
Government officials have said the remaining four A350s are
scheduled to be delivered towards 2020 but the government is yet
to take a decision on them.
Since coming to power in January last year, President
Maithripala Sirisena's administration has taken several steps to
reduce the losses by the national carrier.
The government this week said it has decided to discontinue its
budget airlines Mihin Lanka with effect from Oct. 30 as part of
the restructure plan, which had posted an accumulated loss of
over 17 billion rupees ($115.9 million) as of Jan. 31 since its
inception in 2007.
Suren Ratwatte, Sri Lankan Airlines CEO, said the airlines will
take over Mihin Air's 11 routes and will operate as a normal
airlines instead of a budget airline.
Sri Lankan Airlines, which has taken on lease seven Airbus
A330-300s since 2012, has debt of around $3.25 billion.
It posted a group net loss of 16.3 billion rupees ($112.6
million) for the financial year through March 31, narrowing from
the 31.4 billion rupees loss of a year earlier, due to lower oil
prices. The carrier last posted a profit in 2009, a year after
Emirates sold its stake in the venture.
The company has also leased four of its Airbus A330 planes to
Pakistan International Airlines Corp <PIAa.KA> after its
decision to cancel orders for four Airbus A350 aircraft.
($1 = 146.7000 Sri Lankan rupees)
(Reporting by Shihar Aneez; Editing by Gopakumar Warrier)
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