Sri Lanka has re-negotiated the cancellation of a lease agreement for Airbus A350s, according to a media report.

Reuters reported that Sri Lanka will pay USD $170 million to cancel the lease for four A350s ordered by the previous government.

"The cost will be USD$170 million for the cancellation and it will be paid for AerCap," Reuters quoted the finance minister as saying.

The current government has been trying to reduce the losses by state carrier Sri Lankan Airlines.

Sri Lanka posted a group net loss of LKR 16.33 billion rupees (USD$112.6 million) for the financial year to March 31.

The carrier last posted a profit in 2009, a year after Emirates sold its stake.

(Airwise)