Sri Lanka state budget airline asks for more cash

Sept 11, 2008 (LBO) – Sri Lanka’s troubled state-run budget carrier Mihin Air is to ask for another three billion rupees in peoples’ money in the next budget to revive operations, an official said. The airline is now without aircraft after having lost its start-up capital and also money borrowed from state-run Bank of Ceylon, and was said to be in the red by more than two billion rupees.

Tenders to lease two aircraft would close on September 16. They are hoping to get an aircraft on wet lease (with crew and maintenance) for three months and a dry leased aircraft for a longer term.

With no source of revenue, the firm is paying salaries with difficulty and out 200 workers about 40 have already left the airline the official said.

Raja Edirisuriya, a former chairman of the State Engineering Corporation has been appointed to the post of chairman of Mihin.

Sri Lanka has had unhappy experiences with state-owned airlines.

The island’s first national carrier Air Ceylon ran aground. Air Lanka which was started in the late 1970s was mired in procurement scandals, losses and was a burden on the people for years until management control was given to Emirates Airlines.

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