SriLankan Airlines wants a new management contract to be signed soon with Dubai-owned EmiratesEmiratesEmirates Airline, chief executive Peter Hill said Tuesday, forecasting a "tough" year for the island's carrier.
The Colombo government is holding another meeting on January 8 with EmiratesEmiratesEmirates Airline to discuss the renewal of the 10-year management contract of SriLankan Airlines that runs out next March, an airline official said.
"The negotiations between the government and EmiratesEmiratesEmirates Airline have been going on for 18 months. I would have liked to have seen them resolved by now," Hill told reporters in New Delhi.
The Sri Lankan national carrier, in which EmiratesEmiratesEmirates Airline holds a 43.6 percent stake, needs a decision to push ahead with its business plans that include expanding its fleet to 30 aircraft by 2013 from the current 14, he said.
Hill was in the Indian capital to announce that SriLankan Airlines had become the first foreign carrier to operate 100 flights a week to India and hoped to boost that number to 150 in five years.
SriLankan Airlines entered into the strategic partnership with EmiratesEmiratesEmirates Airline in 1998 in which the Colombo government retained a majority stake, but gave full power to EmiratesEmiratesEmirates Airline to run the airline.
Media reports say the Sri Lankan government wants a bigger role in managing the carrier and that EmiratesEmiratesEmirates Airline opposes such a move. The reports have also said that the government has complained the contract is "heavily tilted" financially in favour of EmiratesEmiratesEmirates Airline, which has declared it is keen to have a new deal. Hill declined to comment on the reports.
He said he expected the airline's profits this year would be better than in 2006-07. But he added it would still "be a tough year" for the airline with the escalation in Sri Lanka's ethnic separatist conflict deterring foreign tourists and fuel costs nearly one-third higher than initially expected.
As new tourist destinations open up, any country that suffers civil unrest is bound "not to be on the top of everybody's popularity list," said Hill.
SriLankan Airlines Group posted a post-tax profit of 862.18 million Sri Lankan rupees (7.8 million dollars) for the financial year to March 31, 2007, a drop of 50 percent from the previous year.
Hill said EmiratesEmiratesEmirates Airline and Colombo were discussing a five-year contract as another 10-year contract would be too long in a fast-evolving aviation market.
Aviation experts say the two sides' codesharing and other links meant that dissolving the partnership would cause big headaches for both airlines.
"We (the airline management) don't get involved in the negotiations," Hill said, but added that "all our plans are based on a new deal being agreed."
The airline's fleet expansion was likely to involve a "50-50" mix of narrow-bodied and wide-bodied aircraft, he said.
The decade-long tie-up with EmiratesEmiratesEmirates Airline had vastly improved the catering, punctuality and overall reputation of the Sri Lankan airline, Hill said.
"We have a new brand, a new level of service. We are now taken very seriously by all our competitors." |
