Putting SriLankan Airlines Together Again

By Rajeewa Jayaweera –April 3, 2016

Rajeewa Jayaweera

Public Enterprises Development Minister Kabir Hashim’s revelations onSriLankan Airlines (UL), published in a leading weekend publication last Sunday, did not reveal anything new. The public have been hearing of excesses of the Rajapaksa administration both at SriLnkan Airlines (UL) and other state owned enterprises since 09 January 2015. What the general public would like to know is what has been done by this government since 09 January 2015 and the present Board of Directors (BoD) appointed on 12 February 2015 to turn around the airline.

Company Law of this country stipulates, BoD will elect a Chairman amongst them. The first Minister of State for Aviation appointed on 09 January 2015 resigned in a huff due to his nominee for Chairman being rejected. The Chairman as well as Board of Directors was appointed by the Prime Minister mostly from amongst his close associates. Last Sunday’s report confirms the rumour of the present BoD being divided into two factions.

Deputy Minister Eran Wickramaratne is on record stating in Parliament, UL had made a profit of Rs 4.4 billion in 2008. He further stated, the agreement with Emirates was “a good decision even if done by a different administration”. The then Opposition (UNP) opposed the privatization deal and its leader handed over a letter to the local UN office stating his intention to abrogate the agreement in the event of his party being voted into office.

UL increased it’s 2007 profit of Rs 568.05 mil by 780% in 2008 to Rs 4.4 bil (exit year of Emirates) and then incurred a loss of Rs 9.3 bil in 2009. Eelam IV was in full swing in 2008. The massive profit was declared by selling off assets (aircraft and engines) and leasing them back and not from airline operations!

There is much talk of the aircraft deal concluded by the Rajapaksa administration. Deputy Minister Wickramaratne speaks of “National Crimes” and “Financial Crimes”. The process of purchasing new aircraft is commonly referred as ‘Re-fleeting’. A plan to Re-fleet involve months of research and hard work by different teams of airline professionals. Some of the key components of such a plan are; Trend analysis for Passenger & Cargo, Growth Plan for Route Network for next five years, Revenue & Yield forecasts and Financing Plan for re-fleeting including lease options. It is also customary for aircraft suppliers to provide a Deployment and Utilization Plan for their respective aircraft. What has befallen to all the supporting material leading to the Board Paper which approved the purchase of six A330 – 300 and four A350 – 900 aircraft? Who were the authors of such documents? Were these reports prepared after research and an in depth study or were they purpose prepared, to justify the purchases? If the government is serious in establishing the identity of those responsible for the now partially completed Re-fleeting exercise, it should unearth all such reports, plans and their authors. It is bound to shed light to the origins of this disastrous aircraft order and identity of the “unqualified political lackeys” referred to by Minister Hashim.

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