Flying Blind

February 10 (LBO) – SriLankan Airlines' strategic decision-making has been hit by uncertainty over a management deal between its two main shareholders, a top official said. SriLankan is majority owned by the government of Sri Lanka, but its management was given to Emirates when the Dubai based airline bought a 40 percent stake in 1998.

No Discussions

The management agreement is due to expire in March 2008. For an airline this is not a long time.

"The government has had no discussions with Emirates at all and that is affecting forward planning," says Chief Executive Peter Hill, an Emirates appointee.

"Any decision we take now, will only have an effect 12 to 18 months down the line."

SriLankan now has an all-Airbus fleet of 14 aircraft flying to 28 countries. Though traffic from Europe is slack due to the conflict in the island, its regional operations are doing well.

Flying to India and the Middle East is a lucrative business with more yields than the long-haul European flights.

SriLankan is now the largest foreign carrier flying in an out of India. It has also carved itself a niche almost like a surrogate carrier in the Maldive I