Sri Lanka's Government confirmed the buy-back of Emirates' 43.6% stake in SriLankan Airlines for USD53 million (ColomboPage, 07-Jul-2010). Treasury Secretary, Dr PB Jayasundara, stated the Government acquired the stake for approximately one-third of the price Emirates requested in 2008 through the Bank of Ceylon. Emirates requested USD150 million for the stake in Apr-2008, when it ended its 10-year management contract with SriLankan. Emirates acquired a 40% stake in SriLankan for USD70 million in 1998 and later acquired a further 3.6%. SriLankan was formerly owned the Sri Lankan Government (51%), Emirates (43.6%) and the remaining stake by employees (Bloomberg, 07-Jul-2010).
Government buys back Emirates' share in SriLankan
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In all cases disrespectful startups, usually applying relatively simple but sophisticated IT solutions, have taken on legacy operations. The legacy industries under attack typically involve extensive capital investment, and are often characterised by significant, unhelpful, and highly intrusive government regulation that restricts competition.
Certainly the legacy airlines have had to deal with a new breed of low cost operations, long and short haul. But almost without exception those legacy operators are still there, fundamentally unchanged.
In terms of other industries, this is no more than fiddling around the margins. And time is running out.
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