Sri Lanka state-carrier revisiting feasibility of re-fleeting: minister

"They are re-visiting the entire feasibility," Rambukwelle told reporters when asked whether the airline was going ahead with a plan to re-fleet the airline with new long haul aircraft. In 2012 SriLankan and Mihin Lanka, a budget carrier that gives free food onboard, made operating losses of 21.5 billion rupees, which reporters pointed out was about half the 45 billion rupees expected from a power tariff hike this month. SriLankan is said to be losing money particularly on its long-haul routes to Europe. "As a government we have to take a policy decision whether to have a national carrier or a regional carrier," minister Rambukwelle said. "As of now, as you say there is a loss, they will re-think, if they have decided to re-fleet it they will think twice and see whether it is viable." There were reports that SriLankan was planning to buy Boeing 777 aircraft, but a regional strategy may require more short-haul aircraft, analysts say. Rambukwelle said other full service airlines are also under pressure. "Everyday airlines are crashing in the world," he said. "Even the best airlines in the world are running with difficulty in the current situation. He said the airline was undercapitalized and that was part of the reason for the losses and it was also battling high fuel prices. This year fuel prices are easing. SriLankan is to get 500 million US dollars in people money over five years. Last year's loss however is bigger than its 100 million dollar injection. Rambukwelle said full-service airlines were also being pressured by budget carriers. Recently SriLankan cut flights to India, which used to be a profitable sector, amid surge in nationalist action against SriLankan travellers in South India. When SriLankan was under Emirates management, it was the largest foreign carrier to India. Following the exit of Emirates, SriLankan has made operating losses of over 50 billion rupees according to published data. Analysts say full service airlines are now not only competing with budget carriers but also privately owned national carriers which are more efficient than the state-run airlines that existed up to the 1980s. The state grip on airlines were cut by a wave of de-regulation in the 1980s in Europe and budget air travel is now as cheap or cheaper than car travel in some cases. Britain, one of the first countries to expropriate citizens owned airlines, setting a bad example to other countries, privatized the overstaffed British Airways in 1987, after taking it to profitability over seven years. The parent London Stock Exchange listed firm, now called International Airlines Group, now also owns Spain's Iberia and British Midland.