Pilots: Cost of aircraft lease agreements much higher than market price

By Rathindra Kuruwita

The cost of aircraft lease agreements, signed by SriLankan Airlines in recent times, was 30-40% higher than the current market price, President of the Airline Pilots’ Guild of Sri Lanka (APGSL) Ranjith Vithanage told the Presidential Commission of Inquiry (PCoI) on irregularities at SriLankan Airlines, SriLankan Catering and Mihin Lanka yesterday.

Vithanage said he had ascertained the information at issue during discussions with senior officers and representatives of the Aviation Consultants, Nyras of UK, restructuring of the airline.

"During a discussion with Nyras, which was also attended by R. Paskaralingam, attached to the Finance Ministry, they accepted that the cost of the SriLankan agreements was higher than market value. Ajith Dias, Chairman of SriLankan Airlines Ltd. has also told us that the lease agreements we have entered into are unworkable."

The APGSL President said it had not been able to determine what process had been followed in entering into those agreements. He urged the commission to look at the lease agreements and summon relevant officials.

"We have leased six twin engine aircraft of SriLankan Airlines that lacked ETOPS or Extended Twin Operations certification resulting in a massive loss. This agreement was entered into during the time of Nishantha Wickramasinghe as the Chairman SriLankan Airlines. Last year the new management renewed the lease for three 20 year old A 330-200 aircraft, which are expensive to operate and maintain due to their age. We heard that we have leased them at USD 250,000 each per month and it costs USD one million a month to maintain one. They should be grounded."

It was also revealed that in 2017 SriLankan had spent Rs. 22 billion as rental for leased aircraft, Rs. 17 billion to maintain them and Rs 12 billion on marketing and advertising.

We'll see. It depends on the checks that are being carried out. If they find damages they will have to repair them and then send the aircraft. Hopefully in the coming weeks it may come out.

Such a long down time for 'minor damage' makes no sense. Wheel changes are done in hours even for all 8.

Non structural panels can be changed by a couple of guys with screwdrivers - takes minutes.

Something doesn't add up.

Sri Lankan Looks To Replace Airbus A350 Orders

Ratwatte would not specify which aircraft will be ordered instead, but he noted that A330s and A321s are a good fit for the Sri Lankan fleet. The airline already operates both types. The A350s were to be delivered from 2020, but the arrival date for the replacement orders will be pushed back, said Ratwatte.

More 'Big Talk' from Suren 'Fake News' Ratwatte.

Once you read the article a few times you realise that it's all meaningless noise - no facts - just more BS.

Time for early retirement imho!

Good if SriLankan chooses the A330neo or A321LR.

But I suspect this is just only some of his "big talks", just as it is said above.

Singapore Airlines is planning to transfer some aircraft from Silk Air to Scoot. I think Scoot will fly Colombo to compete with AirAsia and Malindo.

Sri Lanka to increase domestic flights

COLOMBO, June 21 (Xinhua) -- Sri Lanka on Thursday said it will expand its aviation sector by allowing five new companies to operate domestic flights in the island country.

Following a proposal made by Prime Minister Ranil Wickremesinghe and Transport Minister Nimal Siripala De Silva, the Cabinet of Ministers had approved the proposal to ask the five firms to apply for operating licences, Cabinet Spokesperson Gayantha Karunathileka said.

Source-Xinhua

UL will definitely need few new A 330s to replace old ones. Skytrax customer rating getting worse due to these old air crafts

This is good news for me as a frequent traveler to SG... need to have good competition to get best prices

Exactly, especially Melbourne, as always the old A330-200s are flying on that route. But I hope that even if they tend to bring new aircraft, I wish they'd never give them on lease to another airline, like how they did previously to one of the brand new A330-300.

This is due to the high lease costs of the new A333. The lease costs are so high it is impossible to make money with these aircraft.

More aircraft = more losses is not a viable business plan.

The problem with leasing these aircraft is that this will need to happen at market rates or less - UL will have to eat the difference every month.

This lease deal has no termination clause so it can't be cancelled - they've been trying to renegotiate for several years. Not going to happen imho.

Same story for the A350's.

Why do you think Ranil was in Qatar recently? I'm betting he was begging them to buy UL.

Exactly. So that means whatever said and done, SriLankan has to take the A350s, since there is no termination clause for them?

This will be good as it promotes better travel options within the island. Except for the Southern highway, the road system and road condition throughout the island has deteriorated immensely of late. I did Kandy/Colombo some 2 weeks back on a Sunday early afternoon, it took me about 4.5 hours to reach Colombo on a 150km distance. In many countries, it would take the most 1.5 - 2 hours. Imagine all the time wasted.

4R-ALR was in maintenance last week.