Sri Lanka’s Mihin Air seeks cash, merger

May 30, 2008 (LBO) Sri Lanka's grounded state-run budget airline has sought an 800,000 dollar cash infusion from the Treasury and may be merged with the national carrier, as part of a restructure plan, officials said.





Merger

The restructuring plan prepared by state-owned Merchant Bank of Sri Lanka, had also suggested the smaller airline merge with national flag carrier SriLankan Airlines.

"I can't see a problem to merge with SriLankan," Gunawardene said.

"We are owned by the same parent, the government.

"For the commercial viability of both entities, it (merger) can be done.

"

However, merger would eventually have to be approved by SriLankan's 40 percent shareholder, Dubai's Emirates Airlines, he said.

The country's first state-run airline Air Ceylon went bust in the 1970s.

The second state-run airline, Air Lanka was part privatized and given for Emirates to manage after running losses and being mired in repeated procurement scandals.

Emirates re-named the airline, SriLankan.

SriLankan airlines is currently managed by the government after Emirates pulled out of a management deal from March this year.

Gunawardene's brother, Manoj a veteran at Sri Lankan, was recently app