Collapsing Administration: Debt-burdened national carrier encounters another loss

Collapsing Administration: Debt-burdened national carrier encounters another loss

Collapsing Administration: Debt-burdened national carrier encounters another loss

Written by Staff Writer

28 Dec, 2016 | 9:59 pm

Media reports said debt burdened national carrier, Sri Lankan Airlines has incurred another loss of over 15.9 million US dollars as a result of a delay by Pakistan International Airlines in acquiring two aircraft under an agreement signed in August this year.

With the aim of cutting debt, the state-run airline struck a deal with the PIA in July 2016 to lease four of its Airbus A330 planes, after cancelling an order for four Airbus A350 aircraft.

According to the Sri Lanka Mirror, PIA had not been able to generate sufficient money from the aircraft operation and has requested to discount rental payment for second aircraft.

Pakistan Airline negotiators want the wet lease agreement revised with a discount on the previous aircraft and a dry lease agreement for the other two air craft at a discount payment.

A wet lease is a leasing arrangement where one airline provides an aircraft, complete crew, maintenance, and insurance to another airline which pays by hours operated.

Cash-strapped Sri Lankan Airlines suffered another blow owing to delays by Pakistan International Airline in settling installment payment for the wet leasing of the first A-330 and the failure to take over the other two aircraft.

According to Sri Lanka Mirror, the two airlines are currently negotiating to settle the issue. Attempts by News 1st to reach the management Sri Lankan Airlines for a comment was unsuccessful.

Sri Lankan Airlines has debts of around 3. 25 billion US dollars and is looking for an international partner to help reverse years of losses.

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