Q. Would it be better to negotiate our leases and to get older model Airbus aircraft for less monthly lease and interest rates since, as you said, the current fleet of Airbus A330s are not efficient at doing air cargo and passenger transport like the Boeing 747?
A. Most of the leases are for 12-year periods. Many of them began in 2014/15 and some in 2017. So they have many years to run — the first, for the most expensive A330s, will begin to expire in 2026. Until then SriLankan Airlines is contractually liable for them.
Once the pandemic recedes and a vaccine is available, airline traffic will slowly recover. There will be plenty of airlines such as Emirates, Qatar, Singapore, Cathay etc, who will connect Sri Lanka to the world. The strong LCCs (Indigo, Air Arabia, Fly Dubai, Air Asia, Lion Air etc) will also provide regional connectivity.
There will be other privately funded airlines springing up to service the market too. FITS already has an operation running. Two start-ups, Spark Air and Fly Lankan, are advertising their intent. In my opinion, there is no need for the GOSL to waste public money on the airline business. It is far better if private enterprise is allowed to operate airlines based in the country than for the government to spend state funds.
It is a matter of the GOSL having to decide where the priorities lie. Propping up UL for another 3 to 5 years will cost somewhere in the region of USD 3 billion. The choice is up to the government. Will the money be better spent elsewhere, or should the national carrier continue to be subsidized? That’s a political choice.
A. Most of the leases are for 12-year periods. Many of them began in 2014/15 and some in 2017. So they have many years to run — the first, for the most expensive A330s, will begin to expire in 2026. Until then SriLankan Airlines is contractually liable for them.
Once the pandemic recedes and a vaccine is available, airline traffic will slowly recover. There will be plenty of airlines such as Emirates, Qatar, Singapore, Cathay etc, who will connect Sri Lanka to the world. The strong LCCs (Indigo, Air Arabia, Fly Dubai, Air Asia, Lion Air etc) will also provide regional connectivity.
There will be other privately funded airlines springing up to service the market too. FITS already has an operation running. Two start-ups, Spark Air and Fly Lankan, are advertising their intent. In my opinion, there is no need for the GOSL to waste public money on the airline business. It is far better if private enterprise is allowed to operate airlines based in the country than for the government to spend state funds.
It is a matter of the GOSL having to decide where the priorities lie. Propping up UL for another 3 to 5 years will cost somewhere in the region of USD 3 billion. The choice is up to the government. Will the money be better spent elsewhere, or should the national carrier continue to be subsidized? That’s a political choice.
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