July 21, 2016 (Reuters) – Sri Lanka’s cash-strapped national airline is in talks to lease four of its Airbus A330 planes to Pakistan International Airlines Corp, a government minister said on Thursday, months after cancelling an order for four Airbus A350 aircraft.
State-owned SriLankan is aiming to reduce its debt and also looking for an international partner to help reverse years of losses.
“A team from the airline is in Pakistan for negotiations. We will lease one A330, latest next month, on wet lease,” Kabir Hashim, Minister of Public Enterprise Development, told reporters in Colombo.
A wet lease refers to when one airline provides an aircraft, crew and maintenance to another.
Hashim also said SriLankan would lease three more A330s “in the next few months”, but did not discuss the type of lease.
The airline, which has taken on seven Airbus A330-300s since 2012, has debts of around $3.25 billion.
Hashim said the airline paid around $450,000 dollars a month to lease each A330 and was looking to lease the aircraft to the Pakistani carrier “even at a break even” level.
The aircraft to be leased were used on loss-making routes to cities such as Frankfort, Paris, and Rome, which SriLankan has decided to cancel, he said.
SriLankan ordered eight A350s from Airbus in 2014. It has cancelled four and already divested one of the others.
Hashim said it was in talks with parties including an Iranian airline to divest the remaining A350s.
SriLankan was a profitable venture with Dubai-based Emirates Airline until the pair split in 2008.
It last made a profit in 2009, and since then has incurred losses of $993 million through 2015, the minister said.