13 December, 2017

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The Sad State Of SriLankan Airlines: From Rs. 4.4 Billion Profit To Rs. 107 Billion Loss In 7 Years

The sad and shocking state of the country’s national carrier, SriLankan airlines was revealed recently by Deputy Minister Eran Wickramaratne, who disclosed that the airline which recorded a profit of Rs. 4.4 billion in 2008, took an appalling nosedive having recorded a whopping loss amounting to Rs. 107 billion, since then.

Eran Wickramaratne

Eran Wickramaratne

Wickramaratne, the Deputy Minister of Public Enterprise Development speaking in parliament underscored that the decision by the former administration led by Mahinda Rajapaksa to cancel the deal with Emirates, just because they refused to permit a large entourage of Rajapaksa onboard was a ‘huge mistake.’

He further noted that the cancelling of the deal with Emirates has led to the current shocking financial situation the carrier is embroiled in.

He also praised former President Chandrika Bandaranaike Kumaratunga’s administration for deciding to partner SriLankan with Emirates, which led to the carrier being converted from a loss making institution to a profit making one in 1998.

However, after the Government of Sri Lanka, under Rajapaksa cancelled Emirates CEO Peter Hill’s visa in 2007, Emirates pulled out of Sri Lanka in 2008, after selling their 40 percent shares to the Sri Lankan government.

“From them on, it begun to plummet, recording huge losses,” Wickramaratne said.

The deputy minister also revealed that under the chairmanship of Rajapaksa’s brother in law, Nishantha Wickremasinghe, the staff was increased by 30 percent, which contributed further to the losses.

“In 2008, the staff stood at 5113, but by 2015, this was increased to 6987,” he said. Wickramaratne also cited political appointments as one reason for this increase.

According to the deputy minister in some instances due to the over staffing, a 140 seat aircraft was handled by 300 workers.

He also added that the government’s decision to purchase A330 and A350 airbuses in an irresponsible manner, led to the further suffering of the airline.

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Latest comments

  • 4
    0

    Some key turnaround levers to pull:

    1. Route rationalisation. Right aircraft to right route.
    2. Cancelling/delaying deliveries where possible
    3. Strategic alliance to take passengers to more destination with less UL routes
    4. Recruit staff on service contracts

    Eran, it is time that Ajith Dias and his team communicate action plans. You don’t need 14 months to find out the losses. It is not a Eureka Moment.

    After all, results are in implementation.

  • 2
    0

    Both CEO and CCO are not capable of doing what UL need now. CCO left UL as a Regional Manager ( i believe my guess is correct) and joined an african airline. What did he do when he was a Regional Manager except looking after his loyalist and offering promotions.He is just a middle level manager. It is obvious that he had entered through the backdoor with the help of Paskaralingam or Minister Samarawickrama. This government is not capable of selecting the right candidate even at the expense of Rs 3m plus .

  • 1
    0

    [Edited out]

  • 0
    0

    Ruwan

    “[Edited out]”

    Thank you for your measured response and also for keeping it brief.

  • 2
    0

    This is part of the ‘Wonder of Asia’

  • 5
    0

    This is truly pathetic that MR could do so much harm to the country, couldn’t care less for good advice.CEO Peter Hill’s removal is out of order so was the refusal or cancellation of the British Principal of Trinity collage. His sordid regime was a disgrace to the party. Still trying to come back to politics and greed for power has no end.

  • 3
    0

    I suppose the Air Line employees can take the former Ceo son of a GUN NISHANTHA the mad Ass to the Galle Face Green and stone to death, I don’t understand why the people in this country still believe in the Former President and go behind these culprits??

  • 1
    0

    Eran Wickramaratana is poor reading of International Airline Business and its profit. No any part of world national carriers of Airline services are running at profit on even the operational cost is low than other is concern. Most of funds provided to national carriers by relevant governments of National interest of their own economy.

    As Minister in-charge Public Enterprise Development still not realized that Sri Lankan economy needs to be restructured in direction that are not yet clear to UNP leaders ,that including Eran.W… of Christian ideologist. But for me what is clear, is that it will take resources and it will take public spending is the line of progresses of development of economy.

    Eran want to sell public resources to foreign capital. That is not the solution for ills of lost of income of Sri Lankan airline operation by current management. What we have do resources will have to move from weak sectors that are too large like (Sri Lankan airline, Petroleum corporation, Railway services ) to others that they have better management of cost cutting for better prospect for sustainable growth of GDP.

    Eran you have to know capitalism private sector and foreign capital is only that solution for every lost of Public Enterprises. That is what you have been thought by your foreign masters. Much of the as whole system of capitalism nexus by that rest of resources and economic including certain viable sectors also rested on unsustainable foundations.

    Your Hon Minister raise the question of how could something that was a means an end to become the centre of a New Economy ? and its Sustsnibility? As this ongoing world new recession has to forcefully reminded us we are all intertwined.

    Indeed ongoing new political, economic and social crisis that we simply don’t have effective political leadership and institutions to help identify the problems and formulated a UNP vision of how they might be resolved , but UNP leadership has not taken let along appropriate concern action last 15 months since 2015 January 9th.

    What we have come to call Sri Lankan imbalance ever sector of economic also pose a critical problem for country stability. One large section of rural population well below poverty level its means, the other section of cities and few wealth class of that excess of its consumptions. That is just part of UNP type of market economics of
    Neo-colonial system of “good governances” has been apply since 2015 January 9th that under the leadership of Ranil W….and advice by CBK and MS’s thinking tank.

    Let Eran has to study final challenge is stability of every sector of Democracy and Development of our nation. Growing financial instability since 2015 January 9th our day to day survival of economic an increased problems.

    In spite of Western-US- UK and Indian blessing of change of power shifting from MR to MS, Ranil.W..of UNP and CBK alleged no improvements in our financial stability and not improved knowledge about economic management, economic crises have been more frequent and worse than past MR governance .

  • 0
    0

    This is a good exposure of the impact of the Rajapaksa ego on the budget deficit. I hope the profitable business of providing security to ships from pirates will not follow the same path.

    We need investment guarantees to attract foreign direct investments after the ordeal suffered by the Port City investor and the security for ships business acquired without compensation from Mr Senadhipathy.

  • 0
    0

    I,ve tried to fly with SL Airline whenever I travel to Sri Lanka …but for my trip this October , a business ticket with Sri Lankan Airlines would cost me a whopping £800 more than that of Emirates or Qatar …This is not just a few pounds more..its a LOT MORE !!

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