Sri Lanka national airline hit by competition, needs protection: President

Apr 06, 2010 (LBO) - Sri Lanka's state-run SriLankan Airline has not been able to face the competition in a liberalized air services framework and it has to be saved, President Mahinda Rajapaksa has said. He said Sri Lanka's opposition was now criticizing the government's economic strategy using false propaganda.

"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.
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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