By Rajeewa Jayaweera –

Rajeewa Jayaweera

The national carrier SriLankan Airlines operated an eighteen seater Flysmiles Hospitality Booth at Lord’s Cricket Grounds in London on Friday, 10 June and Saturday, 11 June during the third test match between England and Sri Lanka. Free food and drinks had been served to invitees. A group photograph which contained former cricketing greats Sidath Wettimuny, Aravinda de Silva, Sanath Jayasuriya, Kumar Sangakkara, cabinet minister Arjuna Ranatunga and cricket commentator Ranjith Fernando besides the Chairman, Chief Executive Officer and Chief Commercial Officer of SriLankan Airlines has been published in the media.

The published cost of a hospitality booth at Lord’s for the England Sri Lanka test match was GBP 5,000 per day for first three days and GBP 3,000 per day for last two days. The hospitality booth had been obtained by SriLankan Airlines head office free of charge on one day and at a cost of GBP 5,000 less member’s discount by courtesy of the Chairman on the other day. Cost of food, beverages and Champagne was paid for separately.

The airline granted 14 free return air tickets to London for members of the Foundation of Goodness dance troupe, an MCC supported charity project in Sri Lanka. They performed at the Westminster Concert organized by Lord Mayor of London and sponsored by MCC. Cost of 14 return air tickets to London including opportunity costs would amount to more than GBP 5,000 booth rental for a day.

Friday had been assigned to the London office to entertain their guests. Saturday had been utilized by head office for corporate entertainment.

Considering the deepening financial crisis faced by the airline, some are heard to criticize this exercise as extravagant and wasteful.

There is nothing wrong in conducting hospitality suites during important events such as trade fairs and sporting events, provided they are conducted in a manner beneficial to the organization. In fact, such exercises make an important part of promotional programs in many companies, especially loss making concerns striving to return to profitability.

However, a few issues need be highlighted. In order to derive maximum benefit from such an investment, invitees to hospitality suite need be decision makers in the hospitality industry and corporate houses besides members of media. They should not be friends and relatives of top management, visiting ministers / politicians and cricket board officials. The scrutiny of the eighteen invitees who enjoyed the hospitality of SriLankan Airlines on each day, especially on Saturday, 11 June will establish if the expenses for this exercise can be justified.

The management need to justify travel expenses for three senior officials to London, especially in view of an experienced senior staffer, also a former CEO of the airline being present in London. From that perspective, it would appear at least two officials from head office were in London on a joy ride.

Cost saving measures should not be limited to depriving Pilots of annual increments, suspension of overnight crew layovers, to name a few. It also applies to curbing overseas travel of all concerned, unless absolutely necessary.

Lastly, one wonders of the whereabouts of the sometimes talked about Director Europe based in London in charge of the European offices including the London office. It is not customary for promotional events of this scale to be held without the person in charge of the country office, who in theory is also the host. It is he or she who maintains and continues contact with those invited, once head office mandarins have returned home. It is understood, Director Europe had entertained invitees from the travel trade on Friday and was not present on Saturday to meet and greet corporate invitees. The absence of Director Europe in the hospitality booth on Saturday is akin to a performance of Hamlet without the Prince of Denmark!

The non-Executive Chairman draws a handsome per diem for attending board meetings besides a full time chauffeur driven vehicle and other perks from the airline. He is involved in operational decisions, present at all important events both at home and abroad and makes all Media announcements. The Chief Executive Officer recruited in October 2015 draws a monthly remuneration package of several million rupees besides a chauffeur driven vehicle and other perks. Under the circumstances, it is mind boggling to understand the role played by the CEO. For all intent and purposes, it would appear the non-Executive Chairman plays the role of a de facto CEO and the CEO, the role of a supernumerary CEO and paid millions for his efforts.
Considering the role played by the Chairman, it is also poor corporate governance for the three key management personnel of the airline i.e. Chairman, CEO and CCO to be away from the country at the same time.

These are not signs of a sinking airline struggling to survive bankruptcy. These are signs of merry making at the top while the plane is heading south, in an uncontrolled tail spin.