30 September, 2020

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Sri Lankan Airlines: Parliament Reveals UL Loss Is Over Rs.100 Billion!

By Marlon Dale Ferreira

Marlon Dale Ferreira

Marlon Dale Ferreira

It is now time when the country’s current leadership is at a the stage of completing “operation mop up” by bringing people to justice, especially those who were entrusted to responsible posts and who have sadly gone on to ravage the country financially plunging it to a state of abysmal chaos instead.

Unraveling the many misdeeds that have been committed by the Sri Lankan Airline’s still remaining and politically appointed top brass which includes the Chief Executive Officer Kapila Chandrasena and the Airlines ‘Senior Management Team’ (SMT) may now be the order of the day. Especially those who have gone on contributing largely to the current predicament that has befallen our national carrier, making it nose dive into a serious loss, as revealed in parliament which is a staggering amount of over Rs 100 billion.

Being informed and therefore being in the knowledge of many irregularities taking place within the airline itself and not bringing it to the notice of the authorities is somewhat similar to “harboring of a fugitive”. This usually warrants those with knowledge and who choose to keep quiet, guilty as charged as those perpetrators itself.

For starters the entire country blames the previous regime for milking the national airline dry by appointing many political stooges that have now gone on to take the airline basically to the cleaners.

However it was not the Rajapaksa’s who ran this airline physically, but instead it was run by the “first and second” tier below the former ruler, who in all fairness should be investigated fully and held responsible if found guilty.

The question asked in many circles at present is, do we really need the same team to continue or do we need new blood with astonishing ideas and a change in mindset to face the many international challenges the aviation world poses.

Sri Lankan Airlines | File photo

Sri Lankan Airlines | File photo

It was not too long ago when Air Lanka then commenced its operations in 1979 and under the astute management of Singapore Airlines did they really make a name for themselves and the country, as they soared the skies with great pride and a viable bottom line.

Over the years the years the airline industry saw great carriers emerge and also quietly fizzle away when faced with the many global aviation related challenges each decade had to offer.

If the 70’s saw the European carriers British Airways, Lufthansa and Swiss Air set bench marks for others airlines to follow, then it was with the turn of the 80’s that Asian airlines like Singapore Airlines, Malaysian Airlines, Cathay Pacific and Thai Airways take over.

However in the 90’s it was a turn that currently still holds sway 25 years later, when Middle Eastern airlines entered the market and with it took a way a huge chunk of the global aviation pie.

They came to Sri Lankan and they took the choicest of employees that Sri Lankan Airlines possessed and it is clearly visible if you look at all the former Sri Lankan Airlines staff manning key positions among the gulf carriers. No doubt Emirates Airline, closely followed by Qatar Airwars, Eithad Airways and now the refurbished and re-branded Oman Air have posed some of the biggest possible threats that Sri Lankan Airlines has faced besides the fluctuating prices of aviation jet fuel.

If over the years the Senior Management has been ineffective and incompetent to say the least, and if they could not face the posed aviation challenges and fly over unscathed, then perhaps it may be time to relieve these professionals of their official positions and make way for newer outlooks through newer dynamic individuals to take the airline first out of this rut and then perhaps towards a greater altitude of hope.

The current team of Senior Management of Sri Lankan Airlines and all its political appointees together with some of the staff who reached great heights by currying favour with the top brass, should all be then packed off and dispatched as soon as possible purely based on their collective incompetent performance.

Even they would dig deep down within and agree that they have been massive failures as aviation professionals. A Rs 100 billion loss will never be able to be recovered in their professional life time anymore.

There is no point in bottling ‘old wine’ for consumption in ‘new bottles’, when ‘new wine’ could be bottled instead.
That is exactly the point that should be driven under the watchful eyes of Ajit Dias the newly appointed Chairman of the airline.

Only time will tell if this new Chairman will deliver the goods as his close friendships outside of the airline with those currently holding top posts like the Chief Executive Officer Kapila Chandrasena and Chief Operations Officer Capt. Druvi Perera may hinder the many great ideas and changes that he may bring in his quest to even attempt saving the now sunk airline.

I wish to congratulate him on his appointment to this very respectful and prestigious post held in the past by some even more respected professionals and of course then there were the ones who were not so respected too like the departed last one.

I sincerely hope and pray for his sake that one day when he departs, I could lay my hand on my heart and sincerely write a few truthful things about his tenure and hopefully state some of the things that true legends leave behind when they depart. The legacies I talk about are the ones which are usually left behind by great leaders who influenced change for the better. When I say ‘legacies’, I mean those that generated profits, reduced costs, introduced efficient policies, procedures and processors and left the place in a better healthy state that when they received it initially.

I shudder to think sometimes that he like the previous Chairman Nishantha Wickremasinghe also enters the aviation arena with little or no experience at all.

If Wickremasinghe knew only what a tea bush looked like, I assume he too would also know a thing or two about buttons and thread coming from the apparel industry. But then again he comes with some sort of exposure in handling corporate busineses that the general public has given him a decent nod and will wait to see how he handles the pressures being the big man of the airline.

Rest assured since his appointment is of a political nature he will also end up wallowing in a consome ala a ‘political soup’ as long as he occupies that seat. That’s the truth and the fact of the matter.

He needs to be informed and advised of all the pit falls that the airline has plunged into from every possible angle and provided with unstinted support, as he takes his seat to commence office for the very first time.

The loss making Airbus A320 Flight Simulator, the inefficient crew rostering Sabre System, a complete review of the current contract offered to the In Flight Service Duty Free supplier, restructuring and reducing the unnecessary top senior management heavy departments, reviewing contracts offered to General Sales Agents overseas , Reviewing of Ground Handling contracts for overseas and also services provided to other operators locally, ensuring process manuals are in place for the entire airline to map out a valid and correct man power cadre, complete review of engineering contracts, spare parts and repair deals, investigating ground handling inefficiencies and fraud, complete review of all Sales and Marketing contracts , complete review of all tender procedures, pricing, purchasing, yield, complete review of all outsourced third party suppliers, review of catering contracts and costing are just a few that come off memory.

Ajit Dias the former Thomian does enter the airline with a sound head screwed on to his shoulders but more over as a former employer himself who has always had the best interest for all his employees at heart always and renowned for keeping his stake holders happy.

We trust he will surround himself with competent aviation professionals who will help him achieve his vision, a mission, strategy and a plan as he takes over our national carrier.

If all fails the country’s leadership may have to rethink handing the airline over to another successful airline to manage it like when they did with Emirates Airline from 1998-2008.

On a positive note it is remarkable to mention that the Gulf carrier of Dubai is known to have not touched a cent off the country’s treasury when it ran the airline during that period. Speak to some existing staff and they will tell you that working conditions were much better too.

For the record the management of Emirates Airline discouraged and did not even entertain the idea of operating the “air taxi” domestic flight operation which subsequently was attempted by Sri Lankan Airlines not too long ago. The design and implementation for the water ways for takeoff and landing costing millions plus the rental of two 18 year old twin otter type aircraft at an approximate rate of US $1800 per hour and a guaranteed minimum payment of 80 hours for both aircraft, proved to be a failure even before it could ever take off. Bemused aviation professionals were assured later that there was more that met the eye in this start up operation that is now handed over and run by John Keells as Cinnamon Air.

“You’re our world”

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Latest comments

  • 8
    0

    Marlon Dale Ferreira –

    RE: Sri Lankan Airlines: Parliament Reveals UL Loss Is Over Rs.100 Billion!

    Rs. 100 Billion = US $ 770 Million = $37.5/Sri Lankan Inhabitant = Rs. 4,882 Per Sri Lankan inhabitant.

    “The question asked in many circles at present is, do we really need the same team to continue or do we need new blood with astonishing ideas and a change in mindset to face the many international challenges the aviation world poses.”

    Yes. Otherwise. how do you clean up? Rule 1. Everybody is replaceable.

    Still The President Wanted his private plane. Wow!

    Mahinda’s Rs.2080 million private plane project stalled
    SUNDAY, 01 FEBRUARY 2015 12:

    lankatruth.

    Former President Mahinda Rajapaksa, while he was in power, had taken measures to get down an aircraft for his personal use but President Maithripala Sirisena has decided not to bring it down say reports.

    It is interesting to note that the special aircraft, which costs Rs.2080 million, was to be bought even when the SL Air force had aircraft the President could use for himself.

    There were many views exchanged in the media and people expressed their indignation regarding the use of aircrafts by members of Rajapaksa family during the tenure of Mahinda Rajapaksa.

    Maintaining airlines that wasted public funds, using air-crafts to reach destinations to ride horses, finding a light aircraft belonging to Yoshitha Rajapaksa, Sajin Vaas possessing aircraft and a training school for aeronautics, using separate aircraft by the members of Rajapaksa family for their tours, two aircraft being used when Mr. Mahinda Rajapaksa visits a country were vehemently criticized by the public.

    Also, billions have to be recovered from Basil Rajapaksa, Namal Rajapaksa, Wimal Weerawansa and several others for the flights they had flown during the presidential election.

    • 5
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      This particular Nishantha Wickremasinghe SHOULD be made accountable for the loss, if not all at least half of the billions went missing.

      If the bugger would deny to pay, their properties should be confiscated – such laws should be made to protect to be effective at least from next time on. Else, the successor to him would also either neglect or do the same and festate the wounds in th edays to come.

      In Germany or other developed countries, nothing like would have been there – since, they make it clear by all kind of law reforms if anyone regardless of the status would NOT be able to escape if investigationss are carried out. Latter is what our people need to face the future. Law and order above anything and everything else should be there.

      Disipline can only be brought to the nation through imposing rigorous laws because without laws homo sapiens in general behaves as if they are not second to subhumans.

      • 0
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        Yes – in Geramny or almost every country in Europe – fast driving is a punishable act – they way they charge you escape nobody there. So our people shold also be warned with such rigorous laws.

        If they wuold not introduce them to the system today, WHEN ?
        Now the society seems to be alert on paradigm shifts. So it is the chance for politicians to make use of it.

  • 3
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    Thanks Marlon for an inside view of the shortcomings of our airline. As with many other institutions those running it at the top only had pleasing MR and themselves as their priority. Hope the new management will get their priorities right. Please keep up the pressure by way of regular exposures.

  • 0
    1

    Dias Thomian ? Bullshit

  • 2
    1

    Dias Thomian ?? bull shit

  • 4
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    Marlon please find out the cost of transporting lambroghinis up and down, and where they went! I am sure that the public would like to know!

    • 1
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      Before the Elections the CEO of Sri Lankan Airlines was asked where the Super Luxury cars were shipped, his answer was that was that the airline has not shipped ANY LUXURY cars.. He’s a liar…

      Access Deputy Minister Sujeewa Serasinghe’s website it shows u NON photo shopped pictures of these cars being loaded to a Sri-Lankan Airlines airplane. It is learnt that these cars were shipped to Dubai to a Bhai businessman from SL domiciled in Dubai. He and his brother Musthaq who runs around in fancy cars( who made a false allegation that Nauzer Fowzie, son of Minister Fowzie had held a gun to his head threatening to shoot, which were head line news at the time) are close associates of MR. They own a chain of restaurants on Marine drive namely Indian Spice, Yaal Restaurant, China Town, Indian Spice, Chennai Restaurant at Galle Road in Bambalapitiya at the intersection of Lorenz Road. He is also the importer of dhal from Canada that is unfit for human consumption which in Canada is used to feed horse and who is monopolising the import of dhal.

      This Mustaq stole all the property that belonged to his brother who is domiciled in Dubai threatened his brother not to step into SL. The brother owns billions worth of Real estate in CMB and used Nauzer to get help of MR. The brother transferred all properties of his to Nauzer who initiated legal proceeding against Mustaq and now he has been charged in court for writing up false deeds in names of house maids that has come to light. Now Mustaq is pleading with Nauzer not to proceed with court cases… Damn good for the fellow for betraying his OWN sibling to illegally rob his brothers properties. Now the Luxury cars that belonged to the Prince’s are parked in Dubai…

  • 1
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    Sell it completely without keeping any share and that will prevent waste of tax money collected from general masses and also not a burden to country any more.

  • 6
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    Political appointments to key state owned enterprises galore under this new administration too.

    First disappointment was Sri Lanka Telecom. MY3’s bro might be qualified on paper. However, there is no doubt it was nepotism. He hardly has any telecom related experience and is ill-suited for such a dynamic business.

    RW has been active too. Appointing his nephew as a Minister of Defense. Then a crony Karvan Ratnayake as Lake House Chairman. Hardly a good choice, if we are to build a balanced, professional, ethical state media sector that is vibrant in SL. At long last.

    I believe Ajith Dias at Sri Lankan Airlines has come through RW’s circle as well. He has close and powerful buddies in the apparel business in SL.

    And so it continues..

    Cheers!

    • 1
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      Why a wet behind the ear politician running MoD? Who is afraid of SF? Why block him from giving his management and defense experience and service to the state as Minister.

  • 2
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    It would be good to have a look at the COPE Report put out in Parliament last year to see what the reasons for continuous losses are.

  • 6
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    To shed objective light to the topic, Kapila was also CEO of Mobitel for more than a year whilst being CEO of Sri Lankan airlines obviously taking two payments and enjoying the facilities of both companies.

    The truth is that he also messed up Mobitel and fired so many talented individuals based on the support of , Nimal Welgma aiyya;( kapila married to Aravinda desilva’s sister) and where, one Welgama brother is a partner with Aravinda for Mahindra.

    [Edited out]

    Further; the call centre operations of Sri Lankan, is outsourced to a close friend and he did the same with Mobitel.

    He may remain in office due to the political maneuvering of Aravinda and Ranatunga.

    The truth is at best he is no leadership material, just a good relationship builder for his benefit.

  • 4
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    Marlon You’re quite correct about the SMT ( Senior Management Team) of SriLankan Airlines. The head of world wide sales is the one who took paid leave from SriLankan and did the election campaign for Sajin Vass by residing in Ambalangoda during the parliamentary elections. Another head of a Ground Handling department was a pimp for Nishantha who used to arrange women for Nishantha.The half brother of Sajin Vass is having a cushy life in UK on SriLankan Payroll patronizing PUBS in UK.

  • 3
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    The person who held the top position in this airline had only qualification of a peon and what do you expect out of him. He had no time for the management of the company except for looking after some ladies. This Rs.100 billion loss eventually a burden on all Srilankans. Why should all Srilankans pay for the sins of this management. Only a small fraction of Srilankans would have used Airlanka for which they would have paid for. The present government should initiate immediate investigation using leading accounting professionals and ascertain the cause of the large losses. The losses would have been from management decisions, mismanagement, and fraud. It would be essential to ensure the responsible persons do not leave the country and therefore action should be taken to impound their passports through the courts.

  • 3
    1

    The National Carrier has always been under the whims and fancies of it’s political masters. Under the Premadasa era,
    a) his son in law Jayakody, was a Director at the carrier who had no qualms in getting fresh flowers delivered at the Changi Airport and carried for free, to be sold at the family flower shop. Luxman Guyes the then Country Manager for Singapore was recalled for nudging that payment be made.
    b) his sleuth DIG Lawrence’s son, ran a corporate management group at the carrier. The chap knew nothing of Airline Management and was always quarreling with the professionals at the carrier.
    c) his family’s jeweler was also made a Director. Go figure the times.

    Lee Kuan Yew, opined to JRJ, that the appointment of Rakitha J, a pilot as the carriers Chairman was a mistake. He asked a person with Managerial Qualities be appointed as Chairman.

    Amidst all the pulling and pushing by it’s political masters, the carrier was held together by it’s professional workforce. True some of them were bag carriers while others refused to carry any ones bags, if you get the drift.

    In fairness to Lal Perera, Head of Global Sales, he is a professional. A ranker who picked up valuable experience and then a specialist in Schedule Planning as he moved up the corporate ladder. No other Manager has performed better than he did when he was based in Kuwait. Lal Perera, has his political interests, a true Southern son of the soil from Ambalangoda and ” left” to the core. He took ” No Pay Leave “, ” twice ” to work for his political beliefs.

    Manoj, Sajin’s half brother, the former CEO of the carrier is also a professional. His current role in London is a quid pro quo deal for getting him to leave the CEO role. He reports to nobody and enjoys a free pass in London ( for now ). Manoj should have never taken up the CEO role for starters. Then the times were a different, indeed.

    Lalith Kotelawela had a company that ran the Airlanka Operation in the USA as it’s General Sales Agents. This company is now run by the Rajapaksa conglomerate. One of those stolen properties, perhaps.

    We now have a political reset. We must demand that technocrats run the country.

    Thanks for reading.

  • 6
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    As per the malpractices concern @Srilankan Airlines not only the chairman the YES MANAGERS also should take responsibility of the down fall of the AIRLINE

  • 0
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    It is very easy to place the entire blame for the colossal loss of these Public Corporations on the Management from Chairman downwards. But in making that assessment,I feel, one has to look at the “Bigger Picture”, in that, it’s Operational, Commercial and Management visions and relevant competencies in relevant fields have to be looked at “in-depth”. All Public Corporations, including SriLankan Air, come within the direct “influence” and to a large extent “Control” of Political Leadership coming downwards from the President. So how do those managing these organizations are subjected to and subjugated to the “Authority” of the Political Leadership. It all, therefore, depend upon the degree of “Responsibility” and “Accountability” of those in the political leadership.

    In the case of SriLankan Airline, this was directly under the President. In the very first instant, he took over the airline from the management of Emirates over a dispute of not providing a seat to come to Colombo. That decision was taken without considering any economic considerations, but purely based on being subjected to “emotions” of anger and “ego”. Having done that, the President made the “worst” choice of appointing his Brother-in_law who neither had an iota of knowledge of aviation/experience nor educational background to get a hang of what an International/National Career ought to be. So no wonder the destiny of its down fall was more than a guess.

    One important factor, I believe, even the COPE has overlooked in its assessment was the “Loss” on its operations. Has anyone given any explanation as regards the “Huge Loss” that it would have incurred as a result of operating so many flights for the “exclusive use” of the President and his “Entourage” whenever they left the country on various missions abroad? Can anyone, tell the cost of “HIS” and his “ENTOURAGE” last flight to “Thirupathi”? What was the “Commercial Value Loss” on such deployment. In assessing that “value loss” one has to take into consideration the “withdrawal” of commercial flights from the “schedules” to make available the equipment for such missions.

    Then there were instances of “Diverting” flights for the Chairman,wife and friends to be picked up from waiting in airports not within its normal routes. Also there was an instance of “down size” a flight to pick up a “puppy dog” from a departing airport resulting in “off loading” revenue paying passengers. Has anyone, even in the COPE called for the “Actual Commercial Value Loss” due to these lapses of the Management?

    I believe, no one “Dare Speaks of such costs and resulting losses . Has the Airline “Billed” the commercial value of those operations and recovered monies due from the respective authorities. I doubt it very much. In fairness to those in “Management” I would say, they were compelled to “DO AS YOU ARE TOLD”.

    So to cut short a long story, what the present Government must do is to order a very thorough “FORENSIC AUDIT” by an Independent Management Audit organization and unearth all reasons for this COLOSSAL LOSS and PIN the RESPONSIBILITY and ACCOUNTABILITY on people concerned and “RECOUP” what the PEOPLE of this country have lost.

  • 2
    0

    Nishantha W had no qualification other than being BIL of Mahinda. He travelled regularly to Dubai to meet up with a former stewardess who was posted to Dubai.

    A few months ago he just walked into a car dealer at Kirulappobe and took a car he liked. The UL board was asked to ratify this purchase. That is the power he had due to the connections. The airbus deal has to be looked into.

    The other board members had no say and unfortunately all of them were yes men.

    Hope all these guys will made accountable one day.

  • 2
    0

    UL has to be recapitalized if it is to become viable again. Too much debt and cannot be serviced due to the fleet expansion.The lease renrls on new air buses are massive even though they are fuel efficient. UL will struggle in the short to medium term. Our yields are too low on most routes even if load factors are satisfactory.

    Route network needs a compete overhaul. We cannot fly to places like Moscow simply because the SL ambassador Udayanga wants it done because he is the GSA for UL in Moscow. Possibility of being a regional airline should be looked at since we will struggle to compete with big players in the long haul routes.

    Staff structure needs review. Too many employees and too few planes. Just like CTB having 8 employees for one bus!!

    Tying up with a foreign airline should be explored. Even a giant like Qantas tied up with Emirates to share the routes recenly.

    We need to remember that we are trying compete with Emirates and Qatar and Etihad from Middke East and with Singapore Airlines and Cathay from the East. No easy task since they have deep pockets.

    MIHIN should be closed down. Please don’t merge with UL..

    Ground Handling and Catering should be made competive.

    • 0
      0

      Jagath, you have my vote.

  • 0
    0

    Losses and airlines have been synonymous in the recent past. here is an old joke in US markets. “The best time to sell airline stocks is anytime the market is open”.

    Airlines are historical laggards and are prone to bankruptcies. In the US, except for Southwest Airlines, almost every major airline has been through bankruptcies. The iconic Pan-Am and TWA are no more and even the biggie American Airlines almost skirted a complete collapse.

    Hence this story is no different to the news that CGR or CTB or CEB are making losses.

  • 0
    0

    It is wrong to say that Chaiman and his senior executive staff alone responsible for the airline mismanagement. What was the board of directors were doing when they were given/see these revenue and expenditure reports periodically? Were they at sleep during the board meetings. That was the time to question staff. I presume that previous regime appointed some idiots as board members. They were looking to enhance their perks. It looked like: “you scratch my back and I’ll scratch yours.”

    Mr. Marion Dale Ferreira, you said that:

    Mr. Agith Dias is a former Thomian, is that a qualification? Isn’t that a high school in Sri Lanka? Where did he get his MBA? Harvard, Stanford, Chicago, Wharton, Duke or non of the above?

  • 0
    0

    When the public transport services used by Sri Lankans – trains and buses -are in dire straits due to lack of investment, we waste 100 billions on an airline. Who are the people responsible for such decisions and mismanagement? They must be hauled up and held accountable for such wastage.

  • 0
    0

    Few Facts –

    Sri Lankan can be run very well if the correct strategies are implemented.

    Wages- according the regional Wages, first officers and Captains are paid too much. USD 2500-3000 for a First officer on A 320 and the allowances go up when they go to A 330 / A 340

    Captains are getting paid around $ 4000- 5000 , these wages are too much according to the cot of living index in Sri Lanka, when the Airline is making loss Pilots Guild/ Engineers/ Cabin Crew/ Tech they all negotiate their collective agreement and have the same perks and wages regardless of the performance of the Airline. Its a JOKE . Some Management Captains and Management Senior staff get paid $ 10 000- 12 000 per month. Thats a shocking for a loss making Airline like this in this region. I can prove by facts and its a well known fact. Even in Singapore Airlines when they were not making profits ( not when they were on Loss ) they froze Recruitment , asked Senior Pilots to take leave, take redundancy, cut the routes, froze orders etc.

    but still Sri Lankan recruits Cadets every year spend $ 50-60000 for training, useless Transport , they pay ECD transport a mega money , there was a pilot in Kiribathgoda ECD charges extra Rs 1 lakh to pick him, some pilots travel Panadura where ECD go out of the way to pick them , In other airlines of the world , Pilots travel they use their own transport, or else they reside close by from there own expense. Medical bill of Sri Lankan is Rs 90 Million for an year, thats the staff Medical insurance bill thats Rs 900 lakhs,

    and the staff is too much , for 19 Aircraft Airline has the strength of 5000 employees, ratio is far too much , more than BA , more than Cathay , and Qantas, even Qantas made 5000 employees redundant , but Sri Lankan going Loss loss flying and paying higher wages for Pilots and Senior management staff. You need to change the strategy and break the EGO of the Airline staff and made them aware if you want the job then staff pulling up your socks and take a wage cut and use your transport ( where they can easily afford ) and cut down Fuel expenses Car expenses for the staff …. you need a CEO and Chairman with an EGO to do that, and not somebody who will listen to the Pilots guild who will come and butter up and settle to keep their perks. Its been happening for the last decade where Senior pilots always butter up and get what they want and do not care of the Airline.

    All these pilots take Rice( frozen rice, polsambol and cooked food ) with them when they go overseas for layovers and pocket the perdium , so reduce that too. They will not starve to death they bring there own food.

    And streamline the routes, put heavy charges on landings and ground handling to prevent other Airlines coming to the the Country.

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