Cash-Strapped SriLankan Air To Lease Out Aircraft

July 21, 2016

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SriLankan Airlines is in talks to lease four of its Airbus A330s to Pakistan International Airlines, a government minister said, months after cancelling an order for four Airbus A350s.

State-owned SriLankan Airlines aims to reduce its debt and is 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.

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 USD$3.25 billion.

Hashim said the airline paid around USD$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 Frankfurt, Paris, and Rome, which SriLankan has decided to cancel, he said.

Pakistan International Airlines said in a statement SriLankan Airlines had expressed interest in leasing out four new wide body A330 aircraft to PIA.

"PIA is in negotiations with SriLankan Airlines for the wet lease of four A-330 aircraft," it added.

"These planes would primarily be used for PIA's premier service which is being launched from 14th August 2016."

SriLankan ordered eight A350s from Airbus in 2014. It has cancelled four and moved on one of the others.

Hashim said it was in talks with parties including an Iranian airline to sell the remaining A350s, which are yet to be delivered.

SriLankan was a profitable venture with Emirates until the pair split in 2008.

It last made a profit in 2009, and since then incurred losses of USD$993 million by 2015, the minister said.