Sri Lankan Airlines to be run by government again: official

Jan 08, 2007 (LBO) – Sri Lanka's government will take the reigns of SriLankan Airlines after a management agreement with Emirates Airlines ends in March 2008, the head of the island's investment promotion office said. "The president has decided that the government will run SriLankan Airlines from April," Board of Investment chief Dhammika Perera told LBO.

"This is according to the government policy of not privatizing state enterprises."

He said the government had control of the airline with 51 percent of the shares.

Emirates Airlines, whose management contract expires on March 31 has a 43.6 percent stake in the airline.

Emirates says it is looking for 150 million dollars for the stake. Sri Lanka last month canceled the visa of the resident manager of the airline appointed by Emirates.

This followed an incident where the airline failed to offload booked passengers to fly a presidential entourage from Britain.

n 1998 Emirates paid 70 million dollars for a 40 percent stake in Sri Lankan Airlines in two installments of 45 and 25 million dollars.

However the partnership has been dogged by controversy with various interests, some political, criticizing the deal as favouring Emirates.

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