A grounded aircraft costs SriLankan Rs.110Mn a month

2 February 2019 05:29 pm - 3     - {{hitsCtrl.values.hits}}

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SriLankan airlines is paying Rs.110 million a month for a grounded A330-200 aircraft which it acquired during the cancellation of the lease on three A350-900 airbuses in 2016/2017, the Presidential Commission of Inquiry (PCoI) into irregularities at SriLankan airlines was told yesterday.

SriLankan's Group Internal Auditor Mahesh Nanayakkara informed the Commission that the airline was paying Rs.1.3 billion a year for this grounded aircraft.

"SriLankan airlines has incurred a loss of Rs.14.3 billion because of the cancellation of three Airbus A350-900 and part of the losses was during the financial year 2016-2017. During this period, SriLankan had to acquire a A330-200 aircraft which is still grounded and the airline had to pay a large amount of money a month even without using it," Senior State Counsel Fazly Razik told the PCoI.

When leading the evidence it was also revealed that the amount which SriLankan has been paying every month is not reflected in SriLankan airlines cash flow statements.

The witness said the decision to acquire the three Airbus A350-900 was taken in 2013 and SriLankan airlines had hired ‘Seabury’, a famous international aviation consultancy firm as an external consultant to the Company that year.

The Senior State Counsel asked the witness whether Seabury did not advice SriLankan on the acquisition of these aircraft, as Seabury had partnered with the Airbus Company during several aircraft arrangements previously and would have had the knowledge to do so.

However, the witness was unable to provide a proper answer to the question but informed the PCoI that as the Group Internal Auditor he was not aware that Seabury consultants provided the proper market rates at the time to SriLankan Airlines.

COPE report stated that Aercap company from which SriLankan was leasing the Airbuses had initially asked the company to pay a penalty of US$115 million in lieu of terminating the agreement. However, Aercap had agreed to reduce the penalty to US$98 million based on several conditions. (Yoshitha Perera)

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  Comments - 3

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  • hello Saturday, 02 February 2019 10:12 PM

    109 officers paid more than one million rupees st month, do they paid such amount for mismanage the airline ,

    ConcernedCitizen Sunday, 03 February 2019 06:21 AM

    Bring in laws of bankruptcy and liquidate this airlines for god sake. This is injustice to the poor as they are being robbed by rich, political class and their cronies to enjoying this airline for free. To keep afloat , be it UNP, SLFP, SLPP all will rob the nation. The only solution is to bring in fundamental change in governance system.

    M.I Lafir Sunday, 03 February 2019 11:31 AM

    We should have proceeded with A350-900's that's the way forward. The bunch of imbeciles at Sri Lankan ruining the airline. I don't agree with Mahinda Rajapakse regime's mismanagement but MR was right in ordering A350's.


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