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Loss-making
Mihin seeks more cash, merger
Sri
Lanka’s budget airline has sought a government cash injection
and may be merged with the national carrier after running
up 15 million dollars in debts, the firm’s chief executive
said last week.
The state budget airline Mihin Lanka has been dogged by financial
problems since it began commercial operations last April.
Its last aircraft, an Airbus A320, was reclaimed by its Bulgarian
owners late April.
“We currently owe 1.6 billion rupees (15 million dollars)
to our debtors. We had to give up the plane because we didn’t
have money to pay the lease,” Mihin’s chief executive,
Sajin Vaas Gunawardene, told reporters.
The airline has asked the Treasury for an 800,000-dollar cash
infusion, which includes two lease instalments to secure one
17-year-old Airbus A320 to resume operations, Gunawardene
said.
Mihin has also sought Treasury approval to merge with the
island’s national flag carrier SriLankan Airlines.
“I can’t see a problem in merging with SriLankan,”
Gunawardene said. “We are owned by the same parent --
the government.”
SriLankan airlines is currently run by the government after
Dubai’s Emirates Airlines pulled out of a management
deal in March.
Gunawardene blamed runaway oil prices and lack of government
cash for the airline’s financial woes.
There was no immediate comment from the Treasury or SriLankan
over Mihin’s restructuring plan.
The airline began with working capital of five million dollars
and ran scheduled services to the cities of Trivandrum, Tiruchirapalli
in India, Dubai, Male and Singapore.
(AFP)
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