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China’s Hainan frontrunner for SriLankan: sources

20 July 2016 12:03 pm - 18     - {{hitsCtrl.values.hits}}

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On a quest to find a strategic investor to help revive the loss-making national carrier, it is learnt that the government is close to finding a prospective partner to manage SriLankan Airlines.

Informed sources told Mirror Business that the firm likely to come on board to manage the debt-laden carrier would be China’s largest privately-owned air transport firm, Hainan Airlines Company Limited (HNA).

HNA is the fourth-largest airline in terms of fleet size in China and operates scheduled domestic and international services on 500 routes from Hainan and nine locations on the mainland, as well as charter services.

Its main base is Haikou Meilan International Airport with a hub at Beijing Capital International Airport and several focus cities.

It is one of eight airlines, all based in Asia, rated as five-star by Skytrax, along with All Nippon Airways, Asiana Airlines, Cathay Pacific, EVA Air, Garuda Indonesia, Qatar Airways, and Singapore Airlines.

When contacted, Deputy Minister of Public Enterprise Development Eran Wickramaratne said the government had so far received several “informal inquiries” about SriLankan but stopped short of giving out any specific names.

He also said his ministry was expecting a report from the mangers that were mandated to find a partner for SriLankan, once the deadline for applications expires.

The government recently called offers from interested investors to take over an equity stake in SriLankan Airlines. Appointed as transaction advisors were BNP Paribas and KPMG.

An advertisement by NSB Fund Management, lead managers to the deal, earlier this month said the invitations for expressions of interest (EOI) would be available from 27 July for a non-refundable fee of US $ 5000, whereas offers would close on 24 August.

Officials from SriLankan Airlines earlier had said that by end September, a suitable partner would have been picked.

In an effort to be an attractive venture the entity has kicked off a restructuring programme where it has focused on cutting down operational costs.

While the airline is looking at means to trim its human resources, it has already started cutting loss making routes to Europe and increased focus on India and the Far East.

In March this year the government announced it was seeking foreign assistance to turnaround the SriLankan.

The statement was made shortly the government having acknowledged that the national airline cannot payback its debt mounting over US $ 1 billion. In addition to the debt pile, SriLankan has accumulated losses of Rs.128 billion (US $ 872 million). (Shabiya Ali Ahlam)

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  Comments - 18

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  • sinolankan Wednesday, 20 July 2016 12:29 PM

    I support this move.

    Nandalal Wednesday, 20 July 2016 12:31 PM

    Now there will be an objection from some country.

    sas Wednesday, 20 July 2016 01:13 PM

    MR ruined the Srilankan airline.

    Banda Wednesday, 20 July 2016 01:14 PM

    for both SLn

    kk Wednesday, 20 July 2016 01:21 PM

    my country CHINLANKA in future via DM Android App

    gobbaya Wednesday, 20 July 2016 01:24 PM

    1 Billion in Debt and almost 1 Billion in losses....even asset stripping will not realise that figure.....interesting to see who is willing to jump in.... via DM Android App

    Gamini Wednesday, 20 July 2016 01:31 PM

    Better than going behind hypocrites.

    Flying pigeon Wednesday, 20 July 2016 01:32 PM

    He increased the number of aircrafts.

    Gamaya Wednesday, 20 July 2016 01:34 PM

    During the election time, Yahapalanaya heviliy critiised the Rajapaksha region for aligning with China. Now they also do the same this...ha...ha..

    Sam Wednesday, 20 July 2016 02:13 PM

    It's a better decision to give management control to an airline out of our region. Unlike Emirates or Qatar airways whome will have a conflict of interest when developing the national career. So I support this move.

    Dr.Zaheer Thursday, 21 July 2016 06:38 AM

    This is a wise move. It would be piloting us to safety from the doldrums of financial crisis.

    soma Friday, 22 July 2016 05:53 AM

    Why does it need to be sold to a foreigner? Why not listing on CSE?

    S B Lokuge Monday, 25 July 2016 10:31 AM

    It is because their backers have no faith in this corrupt government.

    Harry Wednesday, 20 July 2016 07:23 PM

    Obvious - It's India

    Harry Wednesday, 20 July 2016 07:31 PM

    Another windfall to Bond Mahendra

    Henry Wednesday, 20 July 2016 07:36 PM

    Gamayo! That's to fool you all to get your votes by our Lichchavie Bros.

    Kalu chinwa Friday, 22 July 2016 07:53 PM

    Better start looking like Chinese people.

    Gamaliel peris Friday, 22 July 2016 07:57 PM

    How else would our crooked politicians get foreign currency to import luxury vehicles for themselves? On the CSE means the will be shareholder accountable.


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