DUBAI (Bloomberg) -- Emirates, the biggest Arab airline, plans to renew its contract to manage SriLankan Airlines even after the South Asian island's biggest carrier reported profit fell on higher fuel costs and renewed civil war.

“We have had positive dialogue with the Sri Lankan government to extend the contract. They want it and we want it,'' Gary Chapman, Emirates' president of group services, said in an interview in Dubai.
“We have changed SriLankan's model so it's probably the largest non-Indian carrier into India, and we've got plans for more investment in the product.”
SriLankan in July said its profit for the year ended March 31 fell 50 percent to 862 million rupees (7.7 million dollars) after tourist arrivals in Sri Lanka fell and fuel costs rose.
Fighting between Sri Lankan soldiers and the Liberation Tigers of Tamil Eelam rebels escalated after a 2002 ceasefire collapsed last year.
Tourist arrivals to Sri Lanka's famed white-sand beaches fell the most in five years in May after the LTTE launched an air attack on oil and gas facilities near Colombo, forcing foreign airlines to withdraw and the island's only international airport to close at night.
Emirates owns 43.6 percent of SriLankan and the Sri Lankan government owns 51 percent.
The carrier operates 14 Airbus SAS aircraft and two cargo carriers, flying to 51 destinations in 28 countries. Emirates' management contract expires on March 31.
“The fact that SriLankan's kept its head above water in such a hostile environment is quite a feat,” Chapman said, declining to provide details on Emirates' investment plans.
Tim Clark, Emirates' co-president, on Aug. 9 said the Dubai-owned airline has no plans to increase its shareholding in SriLankan