Other Side Of The Coin On Emirates Deal – A Comment
By Rajeewa Jayaweera –April 24, 2016
Rajeewa Jayaweera
Having read the above titled article written by ‘An Insider’, published in theSunday Island edition of 10 April, this writer wishes to comment on a few issues. However, this is not an attempt to counter or support ‘An Insider’s’ assertions.
At the outset, a few facts need be established;
- From 1994, it was the desire of the Head of State to privatize then Air Lanka to relieve the Treasury of the burden of a loss making airline.
- Emirates or for that matter, any other company did not come on bended knees and plead for Air Lanka to be sold to them. They responded to a Bid Document published by GoSL.
- Two airlines responded; Emirates with an offer to invest in the airline and Continental Airlines with an offer to manage the airline without capital infusion even though Bid Document specified capital investment. Management contract for Emirates was a subsequent development.
It was a Hobson’s choice for GoSL. It had to accept Emirates’ offer of USD 70 million in return for 40% equity and an opportunity to save millions of dollars for the Treasury during the next decade, allow Continental Airlines to manage the airline and continue to underwrite losses in case they were unable to turn around the airline or carry on as before and keep on subsidizing the airline. The then Head of State and Deputy Minister of Finance, notwithstanding objections by the rest of the Cabinet of Ministers, accepted the Emirates offer. It is a matter of public record the Treasury did not dole out any money to the airline from 01 April 1998 till 31 Mach 2008. GoSL achieved its primary objective.
Some of the short comings of Emirates Management pointed out in the article relates to;
Palming off outdated aircraft on SriLankan Airlines
