Feb 24, 2017

Agreement cancellation saves millions to SriLankan Airlines

The SriLankan Airlines would have suffered a loss of over US$ 205 million over the next 12 years if the aircraft leasing agreement with Air Cap Cooperation was not terminated, state Enterprise Development Minister Kabir Hashim said clarifying certain press reports published on the cabinet memorandum he had submitted on the issue.

The minister said these press reports contained certain falsehoods deliberately aimed to create a clash between his ministry and the Finance Ministry.

Minister Kabir Hasheem said during the previous regime the lease agreement on these new aircraft had been signed for a monthly rental of 1425000 US dollars when it could have been early obtained in a monthly rental of 950000 US dollars.

The statement added that after the agreement was abrogated the Air Cap Cooperation had demanded a sum of 154 million dollars as cancellation fees but the cabinet of Minister granted an opportunity for Sri Lankan Airlines to negotiate with the cooperation to reliance it to 75 to 85 million dollars. At the last round of discussions held by Sri Lankan Airlines the cooperation had agreed to reduce the 154 million dollars to 98 million dollars.

Thus the Airline had been able to reduce the potential from 205 million dollars to 98 million dollars. The statement added their the Mahinda Rajapaksa regime had undermined confidence and acted fraudulently by trying to pay rentals over and above the normal market ratio in signing the lease agreement.

An investigation into the capacity of these air planes had proved they were unsuitable and could not be used profitably in keeping with the Sri Lanka Airlines business plan.

Two companies involved in Air traffic named ‘NYRAS” and ‘Sky Works’ for had reported that these new planes would be an unbearable economic burden on the people of this country and recommended that their lease agreement be terminated.