By Andrew Curran
The chairman of SriLankan Airlines (UL, Colombo International) is pursuing Airbus for the return of USD23.3 million in pre-delivery payments, USD200 million in compensation, assistance with other legal disputes, and four new A330-900Ns free of charge, ideally delivered this year.
Sarath Ganegoda set out his demands in a series of meetings with Airbus, according to the country’s Sunday Times newspaper. The return of the pre-delivery sums, comprising USD19.2 million plus interest payments of USD4.1 million, is connected with a 12-year-old deal to buy six A330-300s and four A350-900s. Later inquiries revealed corruption in the procurement process. The A330s were delivered to the airline via lessors, but the A350s were not. Among other things, Ganegoda wants to recover in cash the costs and expenses associated with the A350s.
Other demands put on the table for Airbus to digest include negotiating with Rolls-Royce to drop two claims totalling USD153.9 million in connection with cancelled Trent XWB engine agreements, asking Thales Avionics to drop a claim for USD3.7 million in connection with IFE installation agreements on the A350-900s, and payment or waiving of USD6 million in legal fees.
Other than saying that the “image of SriLankan Airlines has taken a bad beating over the [botched] Airbus deal,” the report does not make clear why Ganegoda thinks Airbus will gift the airline aircraft or intervene in disputes with third parties.
AIrbus declined to comment on the matter. Sarath Ganegoda did not respond to a request for comment.
Aside from being SriLankan Airlines’ chairman, a position he took up last October, Ganegoda is also chairman and controller of Hayleys plc, a Sri Lankan multinational with interests across multiple industrial sectors and a multi-billion dollar annual turnover. Hayleys was one of the shortlisted bidders to buy a controlling interest in the carrier last year. That sale process was halted after the now-former government decided none of the bidding parties were up to scratch.
In the second half of 2024, presidential and parliamentary elections in Sri Lanka Hayleys and Ganegoda overtly supported Anura Kumara Dissanayake and the Janatha Vimukthi Peramuna (JVP) party, which now holds power. While neither President Dissanayake nor the JVP have publicly endorsed Ganegoda’s tactics with Airbus, sources close to proceedings in Colombo have told ch-aviation Ganegoda is having a significant say in governmental policy and appointments.
Meanwhile, longtime SriLankan Airlines CEO Richard Nuttall was advised in late March that his services were no longer required. However, he is staying on for several more months until a replacement is found. The list of candidates has already been whittled down to three, including one internal candidate. Among other things, the Dissanayake administration believed Nuttall was too close to the former government to remain in the role.
Source: ch-aviation
