COLOMBO (AFP) - Emirates Airlines Sunday announced it will terminate its management of Sri Lanka's national carrier in March after 10 years.

The Dubai-based airline in a statement said it will cease to run SriLankan Airlines from April 1, with the imminent ending of a decade-long contract.

Talks between the Sri Lankan government and Emirates over the past two years failed to clinch a deal on the airline continuing to manage the national carrier.

Emirates owns 43.6 percent of SriLankan Airlines and has the contract to manage the airline till March 31, 2008.

"Emirates will retain its 43.6 percent equity in the company for the time-being, and continue to have a board presence," Tim Clark, president of Emirates Airlines and managing director of SriLankan Airlines said.

Clark's statement came amid worsening relations between Emirates Airlines and Colombo.

The government last month withdrew the work permit of the Emirates-appointed chief executive of SriLankan Airlines, Peter Hill, as he failed to "look after the interests of the majority shareholder."

But Emirates refused to remove Hill, and instead moved him to Dubai to manage the Colombo-based airline till the management contract runs out.

SriLankan Airlines entered into the partnership with Emirates in 1998, with the Colombo government retaining a majority stake.

There was no immediate reaction to Emirates' announcement from the Sri Lankan government.

However, Aviation Minister Chamal Rajapakse was quoted in local media saying the government would not extend the management deal.

The decade-long tie-up with Emirates, which has a strong reputation for good service, has vastly improved the catering, punctuality and the overall profile of SriLankan Airlines, analysts say.

But the 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, down 50 percent from the previous year.

In recent interviews Hill has said the escalation in Sri Lanka's ethnic separatist conflict was partially responsible for the profit fall as it had deterred foreign tourists.

http://news.yahoo.com/s/afp/20080106/wl_mi...es_080106151101

Dubai's Emirates Airlines ends deal with Sri Lanka

1/6/2008 9:36:17 PM

COLOMBO (AFP) - - Emirates Airlines Sunday announced it will terminate its management of Sri Lanka's national carrier in March after 10 years. The Dubai-based airline in a statement said it will cease to run SriLankan Airlines from April 1, with the imminent ending of a decade-long contract. Talks between the Sri Lankan government and Emirates over the past two years failed to clinch a deal on the airline continuing to manage the national carrier. Emirates owns 43.6 percent of SriLankan Airlines and has the contract to manage the airline till March 31, 2008.

"Emirates will retain its 43.6 percent equity in the company for the time-being, and continue to have a board presence," Tim Clark, president of Emirates Airlines and managing director of SriLankan Airlines said.

Clark's statement came amid worsening relations between Emirates Airlines and Colombo.

The government last month withdrew the work permit of the Emirates-appointed chief executive of SriLankan Airlines, Peter Hill, as he failed to "look after the interests of the majority shareholder." But Emirates refused to remove Hill, and instead moved him to Dubai to manage the Colombo-based airline till the management contract runs out. SriLankan Airlines entered into the partnership with Emirates in 1998, with the Colombo government retaining a majority stake.

There was no immediate reaction to Emirates' announcement from the Sri Lankan government.

However, Aviation Minister Chamal Rajapakse was quoted in local media saying the government would not extend the management deal.

The decade-long tie-up with Emirates, which has a strong reputation for good service, has vastly improved the catering, punctuality and the overall profile of SriLankan Airlines, analysts say.

But the 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, down 50 percent from the previous year. In recent interviews Hill has said the escalation in Sri Lanka's ethnic separatist conflict was partially responsible for the profit fall as it had deterred foreign tourists.

http://www.virakesari.lk/news/head_view.asp?key_c=156

Edited January 6, 200817 yr by nunavilan