By Rajeewa Jayaweera –
It is now convenient to blame the Rajapaksa administration for all the ills and losses of SriLankan Airlines. There is no doubt, the former administration plundered the airline for 10 years and did immeasurable damage through their “unqualified political lackeys”, as described by Minister Kabir Hashim. However, that is not the sum total of it. Every administration, commencing 1989 must take its fair share of responsibility for the present situation of the national carrier.
Key to this tragedy is the active participation of the state in managing the affairs of the airline through successive Boards of Directors, appointed not based on relevant professional capabilities and experience in corporate governance but on loyalty to political parties and personal friendships with party leaders.
In fairness, President JRJ having entrusted the airline to Capt. Rakitha Wickramnayake and a Board comprising of several Public Servants and two Industry Captains, never interfered during first six years of the airline’s operations. A Presidential Commission appointed in 1986 to inquire into affairs of Air Lanka found many irregularities and financial mismanagement. It faulted the board members of servitude to the first Chairman/MD, instances of conflict of interest and negligence. It was a case of breach of trust placed on them by the Head of State.
The second Board headed by a Civil Servant with industry captains of the likes of DS Jayasundera (Hayleys) and MTL Fernando (Ernst & Young) made a sterling contribution and were responsible for developing and implementing strategies which resulted in the airline discontinuing Treasury handouts. Sadly, by then, the Board had been dissolved due to a change of Head of State.
The third Board was appointed by President Premadasa. The Chairman/MD of this Board lasted less than three months and was succeeded by a senior SLAS member with Secretary to Treasury, a lawyer, a Businessman friend of the President and another young Businessman (who later became the President’s son-in-law) as board members. President Premadasa and the all-powerful Secretary to Treasury were the only persons issuing instructions to Chairman/MD. Two directors from state banks were appointed much later. During the tenure of this Board which ended abruptly with the assassination of President Premadasa, the airline financed their own operations without Treasury handouts except in the case when an order was placed for 2 new Airbus A320 and 5 new Airbus 340 aircraft (subsequently reduced to 3). During the tenure of this board, they voted to grant two sets of free tickets annually for life, to retiring Board members. President Premadasa upon hearing it ordered the Board to rescind the board decision. Interference in recruitment and appointments, especially of Pilots, Cabin Crew and Overseas Managers commenced during this period.
President Wijetunga appointed a retired General as Chairman/MD with two Air Vice Marshals and a UNP lawyer as Executive Directors to assist him. In short, all of them were clueless in commercial aviation. They had no knowledge to contribute in key areas such as Marketing, Finance, HR, Engineering, Service Delivery etc.
From its inception, the national carrier came under the purview of the President. The Chairman/MD reported to the President. No interference was tolerated from cabinet ministers and bureaucrats. This practice changed in 1994 when the national carrier was assigned to the Ministry of Tourism.
Much is said, quite rightly, of the manner in which aircraft were utilized by President Rajapaksa, for his overseas visits disrupting regular operations. He took this practice to dizzy heights resulting in the loss of millions of dollars by the airline.
Prime Minister Premadasa boarded a London bound flight which went to Zimbabwe carrying him and his delegation for a conference, before proceeding to London. Once installed in the Presidency, he visited only SAARC countries. However, two aircraft were always taken out of regular operations as the old Tristar aircraft were unreliable. During his visits to Delhi, Islamabad and Dhaka, the public were informed he travelled in regular commercial flights. He would travel in a regular flight to Chennai designated as a Commercial Flight. Flight departure was based on astrological times and not the scheduled time. The aircraft would disembark regular passengers in Chennai and proceed to the President’s destination designated as a VVIP flight. It would then return to Chennai designated as a Ferry Flight, board passengers who would have waited at the airport for around six to eight hours and return to Colombo as a Commercial flight. Ticket sales in the Colombo/Chennai flight would be frozen 72 hours prior to departure to enable intelligence services to vet all passengers booked in the flight. It was a deception all the way but for public consumption, the President travelled in a regular flight. A special Tristar aircraft was dispatched to Kolkata carrying the gold plated barrier and canopy for the Sri Maha Bodhi and then trucked to Bodh Gaya. No payment was received for any of these flights.
As this writer recollects, President Wijetunga did not undertake any foreign visits during his brief Presidency.
His successor President CBK too utilized SriLankan Airlines aircraft for overseas travel. She used commercial flights as well as commandeered aircraft from the national carrier. A Tristar aircraft with its crew was taken to Seoul on a state visit and kept for three days. An Airbus A340 was taken to Antigua Bay in the Caribbean via Frankfurt and kept for the duration of the visit. An A340 was taken to Doha, Qatar on state visit despite availability of regular flights. Invoices for such flights were eventually settled by the Presidential Secretariat. However, money spent compensating passengers for delayed flights, missed connections and cargo not uplifted had to be borne by the national carrier.
Presidents Premadasa, Kumaratunga and Rajapaksa are all shareholders of the cumulative loss of the airline in excess of Rs 140 billion. It was unthinkable for our People’s Presidents to travel in regular commercial flights, as done by great leaders such as Lee Kuan Yew.
Presidents Premadasa and Wijetunga granted traffic rights to two foreign carriers at a time Sri Lanka had a restricted aviation policy. There were hardly any Sri Lankan migrant workers in Jordan and Lebanon at the time. The sole reason was the local GSAs of these carriers were close confidants of the two Presidents. These two carriers became notorious in undercutting Air Lanka in the European and Middle Eastern markets.
In the run up to privatization and handing over management to Emirates, there were only two persons in favour of privatization i.e. President CBK and deputy Finance Minister GL Peiris who had to find the money to keep the national carrier in the air. The rest of the cabinet of ministers, government MPs and the Opposition were all against privatization for different reasons. Official travel was in First / Business class full fare tickets paid for by the government. Such tickets were often returned for refund, two discounted Economy class tickets purchased for person concerned and spouse using refund vouchers and tickets sent to the Chairman/MD for upgrade. Ministers, MPs and senior officials could not bear to part with this unique facility. They feared privatization would put an end to it.
Much has been said of offloading revenue passengers to accommodate a Presidential delegation. CEO Peter Hill refused as it involved the entire Business class cabin. Had it been two or three seats, request would have been accommodated by offering booked passengers free tickets to travel another day. Many a passenger would change travel dates for a free ticket plus a refund of paid ticket and none would be the wiser. The fact is that revenue passengers have been bumped off not only for VVIP and VIP passengers but even for free ticket holders, from the inception of the airline. Sometime in 1992, a strange practice was put in place for a short period. A Board member or one of several Head Office Managers was assigned to be present at the Airport each night in an effort to facilitate quick solutions for difficult situations. On a night when it was this writer’s turn, the Airport Manager informed, the flight to London was full and First Class was overbooked by two passengers. A check of the Passenger list indicated a Director and daughter holding free tickets for travel in First class. I requested the Airport Manager to inform the Director the flight was full and to travel the next day. I was later informed the Director had insisted on travelling as she was accompanying her daughter to USA for admission to University. The Chairman had been woken up, who issued instructions to off-load revenue passengers and uplift the Director and daughter. Since I worked closely with this particular Chairman, I got away with a ticking off for not knowing and understanding the world in which I lived!
During the Premadasa Presidency, a colleague of mine who was Manager in Singapore waived excess baggage charges for 80 kgs and charged for balance 80 kgs from a deputy minister (no longer alive) to transport a Cooker and Washing Machine. This grandee was a close confidant of the President. A complaint was lodged with distorted facts which resulted in the Manager being recalled to Colombo. In contrast, sometime in 2003, this writer, then serving as SriLankan Airline’s Manager in France received a call from a cabinet minister (no longer alive) informing he was travelling by vehicle from Brussels to Paris to join the SriLankan Airlines flight, he might be a bit late and if that be the case, I should hold back the flight. I informed him flight departure as at 1410 hrs and he should kindly be at the check-in counter no later than 1325 hrs if he wished to join the flight. He rang off after reminding me he was a minister! He did not check-in by 1325 and the flight was dispatched at 1410 hrs. A massive complaint was lodged in Colombo of my rude behaviour which Peter Hill marked File & Forget. Under Emirates management, staff did not need to fear to do what was right for the airline whereas under state management, doing what is right for the airline could easily result in punitive action or worse.
President Rajapaksa commandeered an aircraft and proceeded to Rome in November 2014 to meet the Pope. Minister John Amaratunga (then an Opposition MP) was invited to join the delegation which he accepted. The aircraft taken off the national carrier’s fleet for the trip, remained with the group for two days in Rome and one day in Milan. Neither Minister Amaratunga nor his Party had any qualms in his travelling in an aircraft which resulted in the loss of hundreds of thousands of dollars in lost revenue, compensation and expenditure. Privilege of kissing the Papal ring took precedence over taking a principled stand against the abuse of state resources. Much has been said of the flight diverted from KL to Singapore for the sole purpose of picking up former Chairman Nishantha Wickramasinghe and his wife. Fact is Wickramasinghe diverted the flight in order to transport a cabinet minister who was in Singapore and was summoned to Colombo. The Wickramasinghes too hopped into the flight. The worthy minister is a cabinet minister in the current administration as well.
These are but a few examples to assist the public to understand the manner in which the state has managed and its leaders have abused the national carrier. Such instances took place in the thousands between 1989 and January 2015.
Social media is agog with abuses, acts of mismanagement and bad decisions during the Rajapaksa era. It is as it should be. The missing part is the prosecution of the miscreants which is yet to materialize. It is this writer’s contention, history will repeat itself. The culprits will escape punishment similar to offenders during previous administrations.
Airlines fully owned by the state cannot be found in the world over other than in SAARC countries and in Africa. These airlines are worse managed than our airline. Reputed Middle Eastern carriers though state owned, are managed professionally with no input or interference from the state. In the west, airlines are either privately owned or else the State is a minority shareholder.
The national carrier lost Rs 16.5 bil in 2014/15. The Chairman is on record stating losses have been reduced drastically but another loss making year is inevitable. Many loss making airlines, judging from quarterly figures are expected to declare a year end profit. Their profitability is largely attributed to the reduction in fuel prices, the single largest cost factor for most airlines. It generally accounts for around 40% of expenditure. Manpower cost of carriers in the west amounts to around 25% – 30% of expenditure whereas at SriLankan Airlines, it is around 15%. Even if previous year’s loss is reduced by 50%, it does not speak well for the revenue increasing and cost saving measures adopted during last one year.
Meanwhile, it is understood Pilots, Cabin Crew and Engineering unions are demanding their annul increments which the company cannot afford to pay. At a recent stormy Pilot’s Guild meeting, its President had requested members to consider foregoing increments which had not been well received. Some Pilots supposedly may consider request provided the new CEO and CCO would set an example by taking a voluntary salary reduction themselves.
This country did not learn its lesson from the failures of Air Ceylon. The undeniable fact is the state is simply not capable of managing an international airline. Despite all the glorified statements by cabinet ministers present and past, fact remains, 27 years of state management has been an unmitigated disaster.