Sri Lankan Airlines will come under government control from April, ending weeks of uncertainty that began with revoking of visa for the airways British Chief after President Mahinda Rajapaksa's entourage failed to get bookings to get back home from London last month.
The British head of the Airlines Peter Hill got attached with the airline in 1998 after the Dubai-based Emirates Airlines took over its management.
While the government owns 51 per cent share in the Sri Lankan Airlines, the Middle Eastern airline has 43.6 per cent stakes in it.
Hill's work visa was revoked last month by the government here apparently over the national carrier's "refusal" to provide seats to Rajapakse and his delegation in an over-booked flight back home from London.
The President was rushing bome last week from London for the crucial third reading of the budget in Parliament after watching the passing out of his son Yoshitha from the Royal Britannia Naval College in Dartmouth.
But, the Sri Lankan Airlines reportedly refused to clear 35 seats for the government team on an over-booked flight from London via Maldives to Colombo on December 13.
The President eventually returned to Colombo on December 14 on a charter flight with Mihin Air, a budget carrier wholly owned by the Sri Lankan government.
However, Sri Lanka's Board of Investment (BOI) chief Dhammika Perera had said that Hill's work visa had been revoked in the "public interest" after the company refused to accede to several government requests.
"There are many reasons for revoking his visa. The airline can't do whatever it wants without government approval," Perera said without giving any specific reasons for revoking Hill's resident visa.
Meanwhile, Tim Clark, President Emirates Airline and Managing Director Sri Lankan Airlines, yesterday said: "Emirates has notified the Government of Sri Lanka that it will not be renewing the shareholder's agreement which expires on March 31, 2008 and accordingly, with effect from April 1, 2008, management control of Sri Lankan Airlines will pass to the Government of Sri Lanka."
Emirates will continue to manage the Company until March 31, 2008, he said, adding it will also retain its 43.6 per cent equity in the Company for the time being, and continue to have a Board presence.