Sri Lanka negotiating with Emirates to buy national carrier stake

Feb 17, 2010 (LBO) - Sri Lanka's government is negotiating with Dubai-based Emirates to buy its stake in Sri Lankan Airlines, the island's state-run national carrier, chairman Nishanta Wickremasinghe said.








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But with a revival in tourist arrivals to Sri Lanka after the end of a 30-year war, the airline is expecting a turnaround later in 2010.

Update Emirates owns a 43.6 percent stake in Sri Lankan which it bought during a privatization drive in the 1990s.

Sri Lanka's government owns a majority 51 percent of the airline and employees the balance.

"The government had decided to purchase (the Emirates stake)," Wickremasinghe said.

"They are negotiating."

Bloomberg newswires quoted Emirates as saying that Sri Lanka has been looking at the possibility of increasing their share in SriLankan Airlines.

Emirates was managing the airline under a 10-year deal until March 2008.

Emirates pulled out after relations between the key shareholders broke down over an incident involving seat allocations for a presidential entourage.

The Middle Eastern airline bought a 40 percent stake in the airline for 70 million US dollars in 1998 and later upped it to 43.6 percent.

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