Sri Lankan Airlines to re-fleet from Dec; Etihad main code-share partner

Aug 27, 2008 (LBO) – Sri Lankan Airlines expects to replace its older fleet of short haul Airbus A320s with new deliveries starting December and will also make Etihad its main code-share partner, a top official said. Though the aircraft would be more expensive, falling lease rentals in the wake of interest rate falls and better fuel efficiencies on new aircraft is expected to leave the airline ‘cash neutral’ or with the same operating costs as earlier.

Maintenance expenses of new aircraft are also expected to be lower.

“It’s a very easy call to make,” says Gunewardena.

A less easy call is when to refurbish the airline’s fleet of A340 aircraft.

The airline did a sale and lease-back last year to generate cash, earning 5.4 billion rupees in capital gains for refurbishment. By March it sat on a 6.5 billion rupee cash pile.

Tough Quarter

Each aircraft may cost as much as 10 million US dollars to refurbish, with new flight entertainment systems.

Gunewardena says they are studying the timing of the refurbishment as it does not want to deplete cash reserves, with uncertainties over oil prices and tourist arrivals to the strife-torn island.

Sri Lankan has had a