Colombo Telegraph

SriLankan Airlines: Parliament Reveals UL Loss Is Over 100 Billion: A Few Comments

By Rajeewa Jayaweera –

Rajeewa Jayaweera

Having read the article by Marlon Dale Ferreira published on 02 February 2015, I decided to make a few comments based on my own experience with the National Carrier spanning over a period of 16 years which I hope would help readers to put matters in a better perspective.

On the issue of “the entire country blaming the previous regime for milking the national airline by appointing many political stooges that have now gone on to take the airline basically to the cleaners”. Ferreira is correct in that political stooges were indeed appointed by the previous regime. On the issue of “milking the national airline”, every government since the airline’s inception are guilty of milking the airline. Suffice to state between 1994 and 1998 in the run up to privatization, the entire cabinet of Ministers were supposedly opposed to privatization excluding the then President and Finance Minister who wanted to be done with regular treasury hand outs. The main concern of those who opposed privatization was the anticipated loss of First Class travel. Ministers on officials travel were entitled to First Class travel. It was a common practice to have their ticket issued against payment by the relevant ministry, return it to the airline for a refund which was issued by way of MCOs in the name of the minister (not in the name of payee), purchase two Economy class tickets for the Minister and spouse and send the tickets to the Chairman who would oblige by upgrading both tickets for First Class travel on a ‘firm basis’. This is but a very small example of how Air Lanka was milked by till 1998. This practice was drastically reduced though not completely eliminated after management was taken over by Emirates. Sri Lanka did not have an ‘open skies’ policy until after privatization of Air Lanka. However several foreign carriers were granted traffic rights to Sri Lanka simply due to the carriers of those countries having local companies as General Sales Agents in Sri Lanka who were close to the Head of State of the day. In addition, more than one Head of State directed Air Lanka to appoint their cronies as General Sales Agents in foreign countries on terms unfavourable to the national carrier. Granting GSA contracts in South India in the early 1990s to a Trade Union Leader from the Hill Country resulting in the loss of millions if not billions is one such instance.

Air Lanka assisted by Singapore Airlines took to the skies on 01 September 1979. The Singaporeans lasted less than two years and their separation was acrimonious to that extent the two carriers were reciprocally banned from landing in Sri Lanka and Singapore. Air Lanka for some time carried Singapore bound passengers to Kuala Lumpur and sent to Singapore on MAS. During the short stint of SQ management, there was no ‘viable bottom line’. While the airline boosted Sri Lanka’s image abroad and became known for its legendary in-flight meals, cabin service, liberal serving of alcohol on board and lavish giveaways, the airline was heavily dependent on Treasury hand-outs.

Many senior employees did take up employment with Middle Eastern carriers. I myself was one of them. My departure had less to do with monetary gains but more to do with a disagreement with my expatriate immediate superior. Since I could not make my superior to leave, I had no other option but to leave myself. I hasten to add that I was able to obtain employment within two weeks of my disagreement due to the skills I acquired during Emirates management from 1998 till 2005 when I left. Many who left to join Middle Eastern carriers similar to myself acquired superior skills after the takeover of management by Emirates which enabled them to obtain lucrative employment elsewhere. Exceptions were Pilots, Cabin Crew and Ground Handling staff who are always in demand.

The ‘Gulf Carrier of Dubai’ was given an initial grant of USD 10 mil. by the Ruler to set up the airline and told not to come back for more. They started operations in 1985 (6 years after Air Lanka) with one leased Airbus A300 from PIA and two leased Boeing 727-200 from the Royal Family’s Air Wing. By 1994 they had a fleet of 18 aircraft. The secret of their success was the Ruler never appointed relatives, his minions, civil servants, ex-army generals nor businessmen to run the airline. It was handed over to a team of expatriates (mostly British) led by an Englishman named Morris Flanagen who I believe is still on the Board though in a non-Executive capacity. Meanwhile many locals have gradually taken up senior positions.

On the issue of domestic ‘air taxi’ flights, I must categorically state that it was originally the idea of Peter Hill, the onetime CEO appointed by Emirates. He personally visited London, Paris and Frankfurt in late 2002 and made presentations to key Agents. I was the SriLankan Airlines Manager in France at that time and I arranged a presentation at the prestigious St.James Club in Paris. It was attended by all the CEOs of key French Tour Operators including Kuoni France, Nouvelles Frontieres, Jettours and Asia to name a few. The concept was welcomed by those who attended and they all agreed to feature the product in their brochures commencing Winter 2003/4 (one year later). However Air Lanka’s perennial malaise overtook events. The original schedule was changed so many times that by the time Tour Operator brochures reached the market, the Air Taxi schedule did not match the arrival time of flights coming into Colombo from Europe. Subsequently the project was abandoned when the government withdrew permits for private flights after hostilities broke out between GoSL forces and LTTE. A second attempt was made some time in 2010/11. Certain destinations were meant to be a regular operation. However within a few months scheduled flights were abandoned and charter flights introduced. No Tour Operator will agree to use a program which has no consistency.

To conclude, a key error committed repeatedly by our leaders is in not appointing a Chief Executive Officer responsible for the day to day administration of the airline with the Chairman and Board of Directors responsible for policy with a clear demarcation of their respective roles. The only time such a situation prevailed at least for a short time was in 1987/88 when an American named John Flemming was appointed CEO and the Board of Directors had industry stalwarts such as DS Jayasundera and MTL Fernando who ensured that Fleming was permitted to function as a CEO with proper oversight. Chairmen, especially the likes of the last Chairman with or without executive powers has and will continue to undermine the CEO. It would be interesting to see how long it would be before the new Chairman starts receiving requests for excess baggage waivers, upgrades, free tickets and waiver of Tender procedures. In our culture, to expect a politically appointed Chairman to turn down such requests is farfetched unless the promised change in political culture becomes a reality.

*The writer worked for Air Lanka / SriLankan Airlines and Qatar Airways for a period of 20 years and held several Head Office and Overseas appointments based in Colombo, Muscat, Chennai, Paris, Dhaka and Frankfurt overlooking Yemen, South India, Benelux, Scandinavia, Southern Europe, Myanmar, Nepal and Maldives

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