Sri Lanka Aviation

I was speaking with a Pakistani colleague, the whole PIA restructure plan seemed to be based around increasing the fleet to match the bloated number of employees PIA have(someone else also had the same lightning brainwave in his proposal bid for UL if you recall). There was some firing of striking employees or something similar but they went to court and got themselves reinstated. Those guys are a bigger mess then UL and UL will eventually get there if nothing is done or bankruptcy reckons..

I hope UL have learnt a valuable lesson in leasing out brand new planes to dubious customers like this; on top of unpaid lease costs now they have a trashed plane to repair and refurbish. On top of this all there are attempts in the PIA board to increase the CEO's salary...

Just a article about Aviation in Sri Lanka written by

A Tale of Two Countries

Ajit Kanagasundram

Singapore has an airline that is acknowledged to be the best in the world, even by its competitors, and which has been profitable from the first year. We are looking for the 5th partner in 40 years (KLM, Union Transport Ariens(UTA) , SIA and Emirates) to take a loss making Albatross off our hands, having lost billions of dollars (not rupees) over the past 40 years in aviation. Incidentally Singapore Airlines was set up by a Sri Lankan Tamil, J Y M Pillay, who ran it for the first 20 years while simultaneously holding other jobs like Permanent Secretary Ministry of Finance. Ditto Changhi airport.

I have already alluded to the fact that SIA is the only airline in the world to have been profitable during every year of its operation, has never received government handouts and is acknowledged by its competitors to be the best run airline in the world. How did Singapore achieve this when they had no domestic route network and no tradition in aviation unlike the Europeans and the Americans. This is worth a study as it is a a microcosm of the Singapore story. In 1965 Lee Kuan Yew chose J Y M Pillay, who had no background in aviation but was known to be an intelligent hardworking Civil Servant in his mid 30s. He was mandated to start SIA with the two Dakota aircraft that Singapore received when it broke up with Malaysia - the only scheduled fights were to KL and Penang. At the same time Air Ceylon was flying Lockheed Super Constellations, the latest planes and the most luxurious, on the international route to London and had an agreement with KLM to provide technical and logistics support. If one was asked to rate the chances of the 2 fledgling airlines no one would have picked SIA.

Pillay first developed regional routes and then moved international. He hired an Australian advertising firm – Bateys – to provide branding for the Singapore Girl concept. Customer service was stressed as a differentiating factor. The international routes grew with the growing realization among international air travelers – especially business travelers who valued good service, punctuality and reliability – that SIA provided all their needs even if at a premium price. SIA, conscious of its brand, never undercut it by offering discounts or cheap fares. The procurement plans for aircraft was simple – buy the latest planes, if possible as the first customer, thus obtaining substantial discounts from the manufacturers. The planes come with 3 years of free maintenance and are more fuel efficient so the cost per seat/mile goes down and profits go up. Dreamliner and the new long range Airbus 350 – manufacturers fight for the cachet of having SIA as an initial launch customer and are willing to buy the business by offering huge discounts.

Following these basic principles SIA grew exponentially and in 1986 Pillay signed the largest aviation order ever for 60 Boeing 747s for US$ 5 billion. The contract did not go up to the cabinet or even the Ministry. It was handled internally by the SIA procurement Board consisting of its own engineers, pilots and management staff and Pillay took the final decision. The funding was SIA internal resources and bank borrowings. Needless to say there was never any hint of scandal.
Consider our case whether it was Air Lanka or Sri Lankan Airways. They have good pilots and operating staff and the in-flight service has always been excellent (in my opinion better than SIA because the smiles of the air hostesses are warmer and more genuine). They failed for one reason only – aircraft procurement because money was to be made.

Rakitha Wickremenayake , a relative of the President JR and a crony of his son ignored SIA advice to buy Boeing and bought a Lockheed TriStar L1011 aircraft ( SIA were then advising Air Lanka after a special request by JR to Lee Kuan Yew). The only other customer in Asia for this aircraft type, the production of which was subsequently cancelled because of lack of demand, was All Nippon Airways and the Japanese Prime Minister at the time Kasukue Tanaka was later convicted of bribery and went to jail. The plane had to flown to Japan or Europe for service! All airlines at this time were buying Boeing and it was no brainer for Air Lanka to do the same. The only question was new or, as SIA advised, used planes. When he ignored their advise SIA pulled out in disgust – the Air Lanka General Manager at that time was Kualsekeran ( A Sri Lankan Tamil origin now wih SIA) but he was helpless in the face of Rakitha’s insistence on going ahead with a clearly unsuitable purchase and he returned to Singapore. Rakitha is reputed to have bought a luxury apartment in Malibu beach in California, which would have been a stretch on his salary.

This saga has gone on with every subsequent purchase under every government. Multiple tender boards and cabinet approval only increased the number of people to be bribed and naturally the cost of the planes went up. Today we are left with the fiasco of taking on long term lease planes which have a mismatch in distance they capable of flying to our our existing routes, and leases signed for planes in excess of our needs where we have to pay US$ 90 million to cancel our contract. Who was responsible?No one knows or cares and many in the old management responsible for this and other fiascos are being reappointed to the revamped airline. Beyond this we have had the spectacle of the employment contract of the Emirates Manager cancelled because he refused to offload paying passengers to accommodate Rajapakse’s cronies going on a junket abroad. No wonder Emirates pulled out.

A colleague of mine send this article for me I just copied couple of pages...there is more...only problem I have with this article is that the writer referring to customer service and good pilots are pre Rajapakse time...definitely not today

Correct. My friend was flying as the F.O. on the ferry flight.

It's really very simple:-

Sri Lanka Culture of Impunity and Zero Accountability.

Under this toxic culture you'll get nothing but Theft/Fraud/Corruption/Nepotism and Racketeering.

Especially if this is the case all the way up to the leaders of the country. They set the example for the rest to follow

Combine this with:-

Average IQ Singapore 108 (highest in the world)

Average IQ Sri Lanka 79

https://iq-research.info/en/page/average-iq-by-country

Receipe for disaster.

I don't believe it's possible to turn the Airline around - the best option is to close it down.

LATEST UPDATE: SriLankan A320neo, 4R-ANA is scheduled to land at Colombo on the 27th of February, and it will be flying to Colombo via Dubai (DXB). There will be a delivery ceremony as well.

I suspect sudden termination of lease agreement could be...did someone/group tried to milk the cow...

http://www.sundaytimes.lk/170212/bus...ew-227752.html



http://www.sundaytimes.lk/170212/bus...ia-227878.html

That's a very interesting article , can you share the whole article with us?

Found the Rest of the Article from Contd.... Now we talk about starting on a clean slate – the Government takes over Si Lankan’s debts and we find a new partner – if we succeed it will be because our new partner wants our sovereign routes negotiated by the Civil Aviation Authority on a government to government basis, not to help us. Besides the long suffering public who pay high fares, the dedicated hardworking airline staff face downsizing due to the financial situation outside their control. SIA has never downsized Singapore staff even once and has expanded employment every year. Any temporary business downturn affects only foreign contract staff.
The success of SIA has had many spinoffs. SIA had to set up extensive maintenance facilities for its planes, and then started servicing planes for other airlines. This attracted aircraft and engine manufacturers like Rolls Royce and Pratt and Whitney to set up their Asian hubs in Singapore. Seeing a chance the government offered the old RAF base at Payar Lebar as the center for the aviation hub to serve airlines in the Asian region. Rolls Royce has its largest facility out side Derby here, capable of fully stripping and re-assembling an engine. Pratt and Whitney has 2000 of its 3000 Asian staff located here. In total these activities, together with Changhi airport terminals (but not including SIA ) provide 20,000 well paid jobs for Singaporeans and expats and government revenue via taxes.
If we had been smart we could have attracted some of this to our shores, as our location on the international air traffic lanes is as good as Singapore. But our aviation efforts never got off the ground because the chance to make money on aircraft purchases proved irresistible. We have an airline that is in debt for a billion dollars, and ageing airport in Katunayake and a brand new state of the art airport in Mattala, where no one seems to want to fly. A friend of mine, Dayantha Athulathmudali offered his services free of charge to the Rajapakse regime. He had spent 5 years in Singapore as the regional consultant on airports to the International Civil Asian Organisation (ICAO) and is an acknowledged authority on airport design. His suggestion was that we build a second runway at Katunayake and thus attract some of the East West long haul traffic to stop here as our landing fees are much less than Changhi in Singapore. He was turned down and instead we built Mattala on borrowed Chinese money. Dayantha was snapped up by Jebel Ali International airport in Dubai as a consultant, when they were expanding to become the largest and most sophisticated airport in the world. We lost a chance to grab at least some of the international flight stopover and refueling business, given to us by our favorable location.

Cant they be able to refurbish the cabins of A330-200 and use them on routes like Gulf, India, Bangladesh, Indonesia etc.. UL better upgrade the MCT, AUH, LHE, BOM from A320 to A332.

I think new A320/321neos are replacing the A321/320 in the current fleet. If I'm not mistaken, as of April 17, UL will have 2 x A320neo, 6 x A320ceo, 3 x A321ceo, 6 x A332, and 7 x A333. I can notice MRC and ABK had been removed from fleet and MRF leaving the fleet in March 17.

Spookyflyer - do you know when does the lease expires for UL A332 fleet?

I do not agree with the author completely; some are quite political...but some information gives a good insight on overall trying to run a state airline...like how did UL end up buying L1011 https://en.wikipedia.org/wiki/Lockheed_bribery_scandals

What i see is, Our state airline had several opportunities and some good advises from personals who had experience in relevant matters, to become a successfully running airline of Asia. But the management/government haven't taken those opportunities and advises and has taken stupid decisions like an adamant child!! And we the people of SL has to bear all cost!!

When UL was run as a business by professional managers it always turned a profit.

Case in point: When Peter Hill was CEO under the auspices of EK.

UL managed to remain profitable despite half their fleet been blown up by terrorists. Few months later 9/11 happened and aviation had one of its darkest periods since inception, yet UL prevailed.

There were some 'creative' account practices IIRC at that time where the insurance payout from the written off aircraft were used in the balances and ultimately showed profitability that year.

Running up to that UL was actually having a net loss predominantly due to rising fuel costs IIRC.

http://www.sundaytimes.lk/170212/bus...ia-227878.html

From the article:-

Looks like PIA is run just like UL - and they're in financial trouble as well! There's a surprise!

UL is not a business of any kind - it is a Racket. Once this is understood the rest falls into place.

UL exists purely to transfer public money into the pockets of the Racketeers and their cronies. These people are protected by the GOSL.

Don't kid yourself all your Politicians are involved.

There may be some (hopefully) who are not actually taking money but they know full well what is going on and do nothing - they're accessories to Corruption and Racketeering- that's your best case scenario!

Why do you think investigations are dismissed as fabrication or it never goes further than talk?

It saddens me to see people getting excited about new aircraft orders. These orders have nothing whatsoever to do with the requirements of the Airline and are just another way for the Racketeers to pocket money.

Ever hear who gets the Commissions? Enough said.

In addition these new aircraft are leased at above market rates so it becomes impossible to operate them profitably. It just adds to the losses.

It's the complete and total breakdown of the Rule of Law - very serious stuff.

The only way to stop the Racketeering at UL is to close it down - the quicker the better imho.

I heard that rumor as well...insurance money is paid for the bottom line of the company...well I am not a financial expert...but what I know is when insurance pay out comes in; it first goes to settle leasing and financial dues...I seriously doubt that UL did a cash payment for the above mentioned fairly new assets.

Many inside UL and outside UL was against on EK management and spreading unfounded rumors like above...like they are making money out of GOSL ASAs; ground handling; catering etc...in my opinion that because racketeers could not make any money; EK did an excellent job