01 April 2008

Emirates, SriLankan split widens

COLOMBO Ã¢â¬' In a further split between Emirates Airlines and SriLankan Airlines, the Dubai carrier said it would stop sharing routes with Sri Lanka's national carrier when its decade-long management contract expires this month.

The decision follows worsening relations between Emirates Airlines and Colombo, with talks between both sides collapsing after nearly two years of negotiations over renewing the contract.

In December, the government withdrew the work permit of the Emirates-appointed chief executive of SriLankan Airlines, Peter Hill, because he failed to "look after the interests of the majority shareholder".

However, the Dubai-based carrier said it would retain its near 44 percent stake and continue to have a board presence.

The Sri Lankan government has nominated and appointed a new chairman and directors to SriLankan Airlines, with immediate effect.

Emirates president Tim Clark told AFP in January that it was willing to sell all or part of its 43.6 percent equity stake in SriLankan.

Emirates will continue to serve Sri Lanka with 17 weekly flights to Colombo, effectively becoming a competitor of SriLankan.

All of which should make for interesting board meetings with three representatives from Emirates and three from the government, supported by the new chairman, Nishantha Wickremasinghe