As we try to slink out of the hotel for a glimpse, cops surround us. They stop us politely but firmly. The place will remain sealed for seven to eight hours as Sri Lankan President Chandrika Kumaratunga is moving around.It is clear. This small island nation is at war, albeit with a section of its own people.

Away from this scene, the squeaky clean and brand-new office of Sri Lankan Airlines at the World Trade Tower is humming with activity. The airline has just received an Airbus A 330-200 aircraft straight from the Airbus Industrie assembly line in Toulouse, France.

Its CEO and top brass are working on a week-end, drawing-up plans to expand the airline's network. The aim is to develop Colombo as a hub for international air traffic, connecting Europe toSouth East Asia and Australia.

After posting continuous losses, Sri Lankan Airlines hopes to break even this year. And though increased intensity of the domestic strife has affected passenger loads in the past six months, the mood in the airline is upbeat.

Surprised? The answer, according to CEO Peter Hill, lies in privatisation, but privatisation alone is not the panacea to a loss-making airline's problems. Finding the correct strategic partner is the key factor which will determine the success of a disinvestment exercise.

"Finding the right partner who is willing to work passionately for turning around the airline is the key to privatisation" he emphasised to a group of visiting Indian journalists.

For Sri Lankan Airlines, tying the knot with Emirates proved to be a turning point. The Saudi carrier has already pumped in investment covering 26 per cent stake in the Lankan airline, taken charge of management and drawn-up a five year business plan to position the latter as premier global airline.

SoSri Lankan Airlines retired its outdated Lockheeds in the last two years, acquiring seven new Airbus aircraft instead. Added to its older planes, it now has an all-Airbus fleet of eleven aircraft with a network of 33 destinations.

Significantly, this is equivalent to Air-India's network which also spans 33 cities. The Indian flag carrier, in fact, covers less of Europe than Sri Lankan Airlines does.

Emirates will further increase its investment (at a pre-determined price per share) in Sri Lankan Airlines to 40 per cent by year-end. It is pushing Sri Lankan Airlines to target key markets which include Europe especially London, Tokyo, Australia and, of course, the Indian subcontinent.