"During their time they made 'open skies' agreement with foreign governments," President Rajapaksa told a business forum at Sri Lanka's central bank Monday.
"Now saving SriLankan Airlines is a problem. Instead of protecting the institutions of our country they have helped outsiders.
"These agreements are a problem of us. We came to change this system."
Under a liberalized air services framework prices fall forcing higher levels of efficiency.
This allows lower income people who were previously not able to engage in air travel to fly. Protection cannot hurt the rich as they have the financial means to overcome price barriers.
Meanwhile Sri Lanka has also indicated that it wants to take Colombo forward as an air services hub.
SriLankan Airlines was privatized in the 1998 and management given to Dubai based Emirates with an equity stake on a 10-year deal which was terminated amid controversy in March 2008.Emirates pulled out after relations between the key shareholders broke down over an incident involving seat allocations for a presidential entourage.
In the financial year ending March 2009 the airline lost 9.9 billion rupees amid a global economic slump and an intensifying war at home.
This year however losses are expected to be reduced.
The government which already owns 51 percent of SriLankan has had discussions with Emirates to buy up its 43 percent stake,
Sri Lanka also started another state-run budget airline Mihin Air which lost more than three billion rupees in the first year of operations. Now it is operating with some services shared with SriLankan airlines.
The aviation hub is intended to attract more transit passengers, more direct flights on economical and large aircraft to more destinations, more space on flights out of Colombo for air freight and so on.
Great number of landing and takeoffs, we sell more services to the airlines and their passengers and make more money. Direct benefits.
Better schedules, lower prices and more air cargo space, Sri Lankan industries and agriculture benefit as do people coming to and going from Sri Lanka. Indirect benefits to industry and agriculture. Direct benefits to passengers. Direct benefits to tourism industry.
All these require a focus on the airport, not on airlines. It does not matter who owns the airlines. What matters is that the airport is running at full capacity. For that we need more airlines to come here, not less. That is why the protection argument is fundamentally contrary to the promise of the aviation hub.