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