18 April, 2019

Blog

SriLankan Airlines: Arrival At Crunch Time

By Sarath de Alwis

Sarath de Alwis

Sarath de Alwis

Ten expressions of interest (EOIs) have been received for SriLankan Airlines, which will be whittled down in the coming months before the Government begins official talks to enter in to a public –private partnership with an international company, a top official said, but a debt sharing agreement appears unlikely. ~ News Report Daily FT 7th September 2016

Most Air Lines lose money. The state owned beasts among them lose more. Quite apart from its accumulated losses of nearly Rupees 107 Billion there is something else that is wrong with Sri Lankan Airlines. Successive regimes have resorted to offer a seat on the Board of the National Carrier to a very special type of people. They come from the entitlement class. Those selected are the Cognoscenti drawn from the corporate world who have access to the sanctum sanctorum of, to follow the genesis in order, Ward Place, St Sebastian in Hulftsdorp, Rosmead Palce and Fifth Avenue.

There was an implicit aura of glamour associated with the particular assignment. The ability to fly to distant places after a board meeting or a game of golf is an exotic experience not to mention the fun of eating out of season fruit and washing it down with Champaign – that Charles Dickens described as elegant extras of life.

President Premadasa put his son in law on the board. President Rajapaksa made his brother in law the Chairman. President Chandrika Kumaratunga before she took the sensible decision to hand over the management to Emirates air lines, chose a family confidante who was clever and crafty to convert the pull and prestige of her mother Mrs. Sirmavo Bandaranaike among nonaligned tea drinking Arabs, in to a ‘Hotsy Totsy fortune, acquiring in the process, the reputation of a business genius.

The present ‘yaha palana’ Prime Minister seems to have followed the precedent and offered the bounty and bonanza to buddies. Its present composition is eloquent testimony.

Except for two, the son of a former secretary to a former president, and another whose allegiance is ditto to the same President, all others are Royal College buddies of the Prime Minster. They have a common denominator. They all have abiding interests, professional or private, beyond the shores of Sri Lanka. A seat on the Board of the Air Line is ‘open sesame’ to the cave of unlimited travel just as in ‘Arabian Nights.’

The Chairman of SriLankan Airlines, in a recent interview has described his board in superlative terms. He should. They share a common distinction – their knowledge of the aviation industry is as good as the knowledge of the hotel concierge on where to eat in the city- third party received wisdom.

Today, we need on the board of the Air Line, persons who are equipped to persuade possible investors why they should put their good money in to a proposition that has gone sour. We need men who can convincingly read the future. Men who will not buy the cock and bull story that we can create a global hub in Colombo to compete with the two super connectors in Dubai and Singapore which seems to have escaped the attention of the present Brahmins presiding over the National Carrier.

Creating global Aviation Hubs requires much more than platitudes an irrelevant profundities. Top ten Aviation Hubs by region as shown by OAG the authority on aviation Intelligence has its own narrative.global Aviation Hubs

We need analytical minds that voice their opinions, in quest of opportunities and not shy away from improving upon existing vulnerability. Learn from competitors. Persons who are good communicators, stubborn enough to refuse to be trapped in a single compartment of thinking.

If the technocrat Prime Minster is honestly committed to privatize or to ‘reorient’ the bankrupt National Carrier he should immediately appoint three persons that this writer is impudent enough to recommend. None of them are personally know to this writer except a fleeting encounter with one of them.

The first nominee to the board of the self-asphyxiating Air Line is Professor Razeen Sally, the new head of the Institute of Policy Studies. He has forcefully argued that ‘Plugging to India will bring shared befits to all of South Asia’. He has been reiterating the theme, long before the lead manager of the reorienting exercise makes his Sri Lankan clumsy discovery in the document soliciting Expressions of Interest from potential partners for Sri Lankan Airlines.

The second nominee to the board is Professor Rohan Samarjeeva. In the 2nd BIMSTEC [Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation] Foundation Lecture at the Chulalongkorn University he has unmistakably identified the geo economic opportunities in the Bay of Bengal.

The third nominee to the board of Sri Lankan Airlines which relies on a pathetic piece of paper from its auditors to label it as a ‘going concern is Mr. Anushka Wijesinghe Chief Economist of the Ceylon Chamber of Commerce. In a contribution to the ‘Diplomat’ he has convincingly argued that Sri Lanka is at the door step of a dynamic market- India but the location is lost without openness.’

The Chief Executive Officer of the Air Line is the brother of Mr. Charitha Ratwatte an advisor of the Prime Minister. The Chief Commercial Officer is a protégé of Mr.R. Paskaralingam another advisor of the Prime Minister. The contents of the document prepared to solicit expressions of interest from possible partners for the PPP – Public Private Partnership of Sri Lankan Airlines tell us that they are all cruising close to ‘fantasy sphere’ higher than the troposphere where all weather takes form.

If SriLankan Airlines [and its appendage Mihin Lanka] are in crisis, the Board of Directors, the CEO and the CCO are not aware of it. If indeed they are, the signs indicate that they are in no hurry to resolve it. It now appears that the lead manager entrusted with the task of soliciting possible partners to ‘reorient’ the national carrier has not been briefed adequately to prepare a convincing document that holds even a glimmer of an idea to resuscitate the airline with accumulated losses of Rs. 64.92 billion as at 31st March 2016 .

The document designed to seek serious partners for Sri Lankan Airlines makes three principal assertions.

1. Sri Lanka is strategically located at the epicenter of global aviation growth. The island nation is in an ideal location for an intercontinental hub – where 85% of the world’s population can be reached within 10 hours from Colombo, with more than 2b people living within a narrow-body flight range from BIA.

2. The four southern states of India are located closer to Colombo than to Delhi. Colombo can therefore be used as an efficient gateway to the South Indian market, giving it access to 250 million people.

3. Colombo can potentially become a powerful alternative hub to the three main Gulf hubs (Dubai, Abu-Dhabi and Doha).

Geography is constant. Human imagination that fuels human endeavor is not. This writer is baffled as to why Captain Suren Ratwatte the Chief Executive Officer or Mr. Siva Ramachandran whose proven expertise in aviation related matters is not in doubt has not advised the lead manager of the Transaction of the the demonstrated wisdom of Emirates Airlines.

A few years back, Sheik Ahmed bin Saeed Al Maktoum Chairman of Emirates, in an interview with the ‘Economist’ traced a new silk road. “Nearly 2 billion people live within four hours’ flying time of the Gulf and twice as many within seven hours. Since the arrival of ultra-long-range airliners in the mid-1990s in the shape of the Boeing 777 any two big cities on Earth can be linked via Dubai with no other stops.”

The map that shows the ten top hubs by region says it all. But as the Cheshire cat told Alice, if you do not know where you wish to go, does it matter which direction you go?

It is not enough to say that our Air Line can accesses a market of 250 Million in the four states in South India. How will you do it? It is easier said than done. First the conducive political climate has to be created. The privatization document makes no reference to the new civil aviation policy of India that was announced a few weeks ago.

India has drastically changed its civil aviation policy. It will enter in to ‘Open Skies’ air services agreements on a reciprocal basis with SAARC countries and countries located beyond 5000 km from Delhi. Indian civil aviation policy planners have concluded that India’s 350 million strong middle class only flies once in four years.

To encourage their travel, the government will develop 350 unused airstrips and airports. The Indians have woken up to Asia and the Indian Ocean. Indians plan to have several aviation hubs. It will be one of three top aviation markets by 2020. Passenger traffic at airports are expected to reach 450 million from what now hovers around 180 million as has been announced by an Indian aviation ministry official who spoke at the recent unveiling of revised civil aviation policy.

The Indian Civil Aviation Policy document of 2016 is essential reading for Mr. Eran Wickramaratne the only voice of sanity that this writer has found in the present cabal of economic wizards parading in the present firmament. The Indian government has proposed to take flying to the masses by making it affordable and convenient. For example, if every Indian in middle class income bracket takes just one flight in a year, it would result in a sale of 350 million from the present 70 million tickets. To make it possible, the government hopes to bring down air fares, especially on regional routes, to an affordable level.

Our pundits claim that Sri Lanka is the epicenter of global aviation. That is blatant balderdash. Sri Lanka has a window of opportunity. There are many smart cities emerging in the south of the subcontinent. My advice to Captain Suren Ratwatte and Mr. Siva Ramachandran is to explore the possibility of locating a partner with whom Sri Lankan can mount single aisle operations from Colombo to Kochi and Kozhikode in Kerala, Mysuru and Hubli Dharwad in Karnataka, Vijayawada and Vishakhapatnam in Andhra Pradesh, Warangal in Telangana, Madurai and Coimbatore in Tamil Nadu.

They are the fastest growing urban wealth creation centers in South India. They are the secondary airports that could feed a modest international airline operating out of Colombo sandwiched between two global super connectors Dubai and Singapore. The accompanying Map of the top global aviation hubs has a narrative of its own. The word ‘crisis’ when written in Chinese is composed of two characters. One denotes danger and the other implies opportunity. This is a truism that can be used either to seduce the regular idiots or to really get on with the job of containing, managing and mastering the crisis with a positive outcome.

Just as I reach the end of this missive at 10pm on Tuesday 6th September I can see parliamentarian Bimal Rathnayake asking as to who gave permission to the Indians to carry out a feasibility study on the upgrading of the Palaly airport. The Prime Minister informs him that the government did.

Across the Hanuman Bridge another story unfolds. The Indians under Narendra Modi have got down to business. They see nations in pursuit of economic growth, stability, social order and cohesion. They call it the Phoenix Horizon. The Indian Minister of State for External Affairs switches from Valmiki to Homer. Asia is the daughter of Oceanus and wife of Prometheus, the god of forethought who gifted fire to man.

Print Friendly, PDF & Email

Latest comments

  • 3
    0

    Dear Sarath
    A well researched article with some insider information if I can call it so
    Yes there are Airlines and Airlines. From the good, bad and ugly
    What is needed in the proposed PPP; it paramount that the Private is Private and Public is Public and it is equal partnership. The board need to be headed by a Chairman and the CEO selected for his or her business acumen and leadership than the political bias. This may be easy than done. Who said life is easy. “Work is the curse of the drinking classes”-Oscar Wilde. I would put it “work is the four letter word of the working classes”.
    As for the board members it should not be nominees of political gurus
    or from the grandees of the establishment; but selected from a open trawl. Personally it should not be top heavy with academics. Then the task of the board becomes very analytical in my view and experience.
    Analysis is paralysis.

    The soft skills of the people on the coal face is paramount for any business but in the peoples’ business which airlines are , is sacrosanct. You provide a good service your clientele increases by progression but a consistent bad service provided is sure to lead you to ruination in no time at all. You need to select and train your staff as if you are entertaining your future in laws. As Oscar Wilde famously said that ” You can never be overdressed or overeducated”.
    I wish the soon be resurrected National Carrier, a bright future. The future is in your hands folks!

  • 6
    0

    An Airline that cheats it’s customer of their Loyalty points and offers customer service from the Gutters can never be a successful airline.

  • 2
    0

    A super piece by my former colleague and superior.

    A thought, would our primary sectors ex S. India be to Asia and the M. East ?

    Cheers.

    • 4
      0

      A “Reoriented” UL may have to manage with traffic between Colombo and Middle East Region without depending much on contribution from S.India as almost all major Cities in S.India are now being served by Direct operators.

      AS for rest of Asia it would depend on how good this”Reorientation” is going to be in relation to the Product.Aftr all UL has to compete with the likes of Singapore Airlines/Thai/Malaysian and Cathay Pacific.Patriotism will not help in filling Airline seats

      It is going to be an uphill task and any further governmental interference in running the Airline will only help to sound the Death Knell of the Airline

  • 3
    2

    God choice EXCEPT Professor Rohan Samarjeeva.

    Ultra nationalistic in my opinion, is he a good choice for looking outwards?

  • 6
    1

    Mr De Alwis

    Thank you for the well written Article.However the regret would be as to how many of those in power would either understand the contents or the gravity of the situation.Leave the Chairman/CEO and the CCO for after all their agenda may completely be a different one let alone their capabilities in comprehending the issues.

    It is quite obvious that the lead Manger who has been entrusted with the preparation the Bid document having no previous Airline nous had to rely of facts and figures provided by various local parties veracity of which have not been checked.Any serious Bidder would certainly find this quite unprofessional to say the least.

    Going by various comments made from time to time by those in power on the proposed “Reorientation”of the Airline no clear picture emerges as to the genuine intents of the Government.

    Why on earth cannot they simply decide on getting out of their involvement in the Airline and instead let the Private sector run it ?.

  • 2
    0

    The perennial problem with Sri Lankan Airline has been the “Political Idiosyncrasy” in the selection of people from the Board of Directors down to Higher Management. When this Airline started as Air Lanka with a Management Agreement with Singapore Airlines, all personnel from the Board of Directors to Management Level were people of “Proven Industry Experienced Track Records”. With them the, then Air Lanka took off with a modest beginning of flying a leased Boeing 707 and developed to flying Big Top Boeing 747 and Technical Achievement of up to “C” check levels. What happened from there onwards was a heart breaking episodes of “Political Idiosyncrasy” of unimaginable proportions that resulted in the present day emergence of a “Deadly Monster” of National Debt. This is the legacy that the present Government inherited and it was a “National Call” to resurrect this National Venture. But the very first person who got involved with that task – the Prime Minister failed miserable and let down the whole country by bringing in a Board of Directors comprised of his friends and school mates. Had he taken a few hours to study the quality of people the then Air Lanka had, he would not have done that mistake. Anyway he did the mistake and it has become too late of the day to correct the situation. However it is a pity that when we have such a huge reservoir of talents from within Sri lanka, the Prime Minister and such responsible Minsters like Mr Eran Wickramaratne are not taking appropriate measures to hand this out fit to some responsible and industry tested talented people to manage its affairs. What those ten BIDS in hand could be anyone’s guess and there seems to be no solution other than this for the present Government. At lease that could be much better than continue with this present day “Buffoonery”.

  • 5
    1

    False pride is the cause of our down fall in many projects undertaken
    by the Govt. In contrast, the private sector and commercial banks are
    doing well in our country. The reason being, unlike the Govt.,private sector takes the correct people to do the job.As writer of this article
    Sarath De Alwis, who has airline background, points out that most air-
    lines lose,which is correct, as earnings in this competitive market is not enough to meet the heavy over head charges like fuel, landing and handling fees, catering and other navigational charges and in addition,
    payment of exorbitant salaries to the Pilots and cabin crew. It is a hidden fact that most well to do governments like the Arab states fund their airlines as a matter of prestige and they show marginal profits and if one could see their books,we could see that they thrive on funds
    given by their Govts. and not on their earnings.

    We should shed our pride and get to an airline, preferably an Arab
    airline with whom a debt sharing arrangement could be arranged as
    such agreement cannot be reached with another airline from another
    area (Rs.107 Billion debts). More over airline business is foreign
    to us, specially the technology involved but we may do well in mar-
    keting. We always had tie ups with other airlines to do the Admin. work as well, even during Air Ceylon days.Selection of Chairman, CEO and the directors should be done on marketing experience one has and these vacancies fit the senior directors of leading commercial esta-
    blishments in SL.and the govt. should adopt a hands off policy on administration.

    Try this out and you may succeed.

  • 7
    6

    Yes…go regional…or better, close it!…and I will sack 3000 employees

    But u guys will get shit for tourism. When Emirates was managing UL, all the tourists were taken to MLE n the cheap residual to CMB. Even the pineapple vendor in Kandalama will face doom if privatized or closed or go regional. Other airlines won’t care about our country’s growth in foreign investment. They would only worry about their balance sheet.

    I have 3000 people directly who are under me in a hotel and then indirectly the suppliers’ etc.The tourists that patronize the hotel are mostly from Europe. Not Indians or Chinese. Cos the Europeans want to live the experience and our Srilankan values. Imagine the job loss, and that only from our hotel. Also, the closure of Germany and France by UL is already giving me sleepless nights. Another stupid decision by the screwed up management of UL.

    The airline maybe a dump in terms of management policies, but it has helped sustain many a life island wide indirectly.

    Castigate the un-noble noblemen for the misdoings, but don’t screw the numerous poor dependents that manage to garner a lifestyle through the Airlines’ (UL) existence. Hence, let’s not give armchair rhetoric without knowing the ground level hardships as a consequence to your analytical theories that only appear on a spreadsheet. Get into an “Amudey” and plough the field first.

    • 8
      4

      My Government,

      Are we to believe that all your Guests from Europe traveled with SriLankan only ?

      You claim that you have 3000 staff directly employed in your Hotel. Iwonder where this hotel is located .

      It is a revelation that European tourist come to Sri Lanka to experience Sri Lankan Values (???) Could you perhaps enlighten the readers what they are

      Your concerns in all probability must be equally shared by few others in the Hotel Industry and quite rightly so on selfish motives(profits for you at the expense of Tax payers)

      Lets be very honest here. As much as No Tourist will decide to visit a country just because there is a National Carrier,nothing will stop a tourist visiting a Country for lack of one.It is the destination per se that attracts people rather than a carrier.

  • 0
    0

    Who will invest in an airline with drunkard pilots and similar authors who write like this ?

  • 0
    0

    well said Sir.

    Chairman, Board members,CEO and other seniors are cronies of Wickramasinghe and haggard old man Paskaralingam. What aviation experience they have in running an airline? It is a crime for Wickramasinghe to do this. However he is a failed politician who is only capable of closing down or selling vntures. I hope he will be thrown out soon.

  • 1
    0

    All statistics are bull shit.2 Billion people are waiting to travel.To which destination.!
    In Srilanka alone I am sure there are millions of people waiting to travel to any point in the globe.
    0nly problem is which government will give these people Visa to travel.
    Give up this number game and get real market potential

  • 0
    0

    Man may be old. But his brain may be young.Why do you want aviation experience.
    If you are a successful businessman you can run the Airline or any business. He should be able to pick suitable key men to run it. In the aviation field there so many segments.
    Operations, Finance, ground handling, marketing and many more . You will never get any single person well versed with all.Do not go by his Degrees, MBAs,and mere experience.
    It is the duty of the Government identify the right man

  • 8
    1

    Jay,
    Pilots are people. Some times they get drunk. How many drunk pilots have crashed
    air planes with people on board?
    How many sober Politicians Corporate Big Wigs, Old Royalists have robbed, plundered public wealth, earned mostly by house maids?

    ‘Similar authors like this’ have the spunk to publicly call a spade a spade. A wise investor may well decide to invest in a land where spades are called spades though some in the benighted land call desolate airports hubs.

  • 1
    7

    Great Article , Mr De Alwis , again like Rajeewa Jayaweera another aviation exponent . Perhaps you may want the readers to understand what you did during your tenure at the famed airline .Having entered through the backdoor , went on to upset every positive move in the departments your worked . A master of the queens language (only asset) , you were single handedly responsible for millions of dollars wasted on the run to south africa . Convinced the bufoons who were then on the board that this was not the best move for the company. What right have you got to write about the whats going on now ???? Buzz off man and focus on anything but aviation . You know nothing about the true situation , just wanting prominence through trash !!!

    • 5
      1

      Mr.Fernandopulle,

      It appears that you posses some inside information as to what went on at Airlanka and in particular the pedigree of Mr.De Alwis.OR is it some news you heard through the grapevine or fed to you by some interested party that prompted to vilify the writer

      Those who have been with the Airline at the time and specially at Commercial would bear testimony to what exactly went wrong with the South African operations where Mr.De Alwis had only a minor part to play.

      I am not privy to the circumstances under which Mr.De Alwis joined Airlanka.If “Back Door” entrance was the issue I am sure he is not alone for there would have been many others including few glorified Errand Boys .

      The important thing is not the writers past or credentials but the contents of the Article and its relevance. I am sure the writer stands to be corrected/challenged if facts are not right and his arguments not sound

  • 6
    0

    Gregory Fenandopulle,

    Sir you are an improvement. You have a name. If that is your authentic moniker I confess my inability to locate your association with either the Air Line or the industry. I can only thank you for your reference to South Africa. Since you claim to know the subject well can you please help me with the Air Lanka flight schedule summer and winter during the one year that Air Lanka operated to CMB/ Johannesburg/Durban ? Who ever who briefed you has left matters unsaid. The
    raison d’être for UL operations to South Africa was the South Indian Diasporic community in that country.It borders the same thesis that I offered in my recent missive. But ours is a land like no other. No sooner I landed in Joburg a dark prince decided that South Indians of SA who wish to visit Indian points must either repose in transit in CMB over night or spend two nights to go to Madras. The transit times may not be accurate but conveys the general idea.The South African venture was made to fail. No my friend I don’t seek prominence. The years I look back are far longer than the years ahead of me. As for the entry by back door, space does not permit me to expand. Yes. It was rather unorthodox. Backdoor is a justifiable comment More of it will be in my Memoirs I am working on. It was an accidental encounter with aviation. As I said I did not disagree with the veteran in aviation (if stenography has any thing do with flying) said that my knowledge of aviation was as good as my knowledge of a shit pit? I joined UL on a specific assignment and it was for 3 year. That I was seduced by the frills and stayed longer is my mistake.

    • 0
      0

      All that sounds a reasonable explanation.

      But what impressed about the article was the fact that you had the courage to recommend specific persons for the immediate future.

Leave A Comment

Comments should not exceed 300 words. Embedding external links and writing in capital letters are discouraged. Commenting is automatically shut off on articles after 10 days and approval may take up to 24 hours. Please read our Comments Policy for further details. Your email address will not be published.