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Sri Lanka’s state-run budget carrier loses Rs930mn

Apr 19, 2010 (LBO) - Sri Lanka's controversial state-run budget carrier Mihin Lanka lost 930 million rupees in 2009, despite support from the island's national carrier SriLankan, which itself made 12.
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2 billion rupees in operational losses, official data shows.

After starting in 2007, Mihin Lanka burnt up its start-up capital given from people's money and notched up losses of 1.

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4 billion in nine months.

Mihin folded in May 2008 with an estimated 3.

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0 billion in debt and losses but was re-started in January 2009 with another cash injection from people's money.
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The airline is now sharing services with SriLankan including pilots. There is no information available on the cross-subsidy given by SriLankan to Mihin and how much of its 12.

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2 billion operational loss is due to the burden of the budget carrier.
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SriLankan ran without support from people's money after it was privatized and handed over to Emirates airline in 1998.

A finance ministry report showed that the state has issued guarantees for 2.7 billion for Mihin Lanka and Sri Lankan to borrow from state-run Bank of Ceylon.

A credit guarantee for 1,552.5 million rupees was related to Mihin and SriLankan's loans got a 'comfort letter' for 1,150 million rupees, the report showed.

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