To lose one parent may be regarded as a misfortune; to lose both looks like carelessness – Oscar Wilde
One could paraphrase Oscar Wilde’s quotation and present it as follows, “To suffer losses from Mihin Air maybe regarded as a misfortune, but to lose Rs 10 Billion from Sri Lankan Airlines looks like carelessness”.
What do we say then if we add reported losses from Sri Lankan Catering amounting to Rs 9 Billion? This threesome seems to have lost something like 20 billion rupees during the last 12 months.
No doubt all these losses are linked in part to the world economic slowdown caused as a result of the misdeeds of US Banks and other Corporate high flyers in the US and bad political management during the Bush era. But, the scale of losses suffered by the airline industry in Sri Lanka surely cannot be placed entirely at the door step of that economic slowdown.
As the saying goes, one can fool some people some of the time, but one cannot fool all people all the time. We can continue to offer excuses; that will not rescue the airline industry. Sri Lanka should have a hard nosed look at what is going on in the airline industry. This needs to be above party politics.
We need to ask the question whether these losses are consistent with losses in the world’s airline industry, and in particular, in the regional airlines category to which Sri Lankan Airlines and Mihin Air belong, or should belong. In fact we need to define our positioning in the industry as that will determine our strategies.
If we compare ourselves with Emirates or Singapore Airlines, or similar airlines, it would be a misplaced and misguided positioning as we simply have not been able to produce the passenger mass that those airlines have consistently managed. Neither will we be able to do so in the near future. Sri Lanka needs to make a firm decision on positioning, and do it very soon.
Linked to positioning, are strategies that will determine where we want to head now and in the future. A successful regional airline can partner with other major carriers to expand services beyond the region/s served. Colombo as a hub is nowhere near Singapore or Dubai, and anyone who has been to these two places, as quite a few Sri Lankans probably have by now, knows this.
The other key issue that will make an airline profitable or not, is management. Sri Lanka has corporate high flyers and successful managers who have proven their capacity and capability to manage large conglomerates. The issue is however whether they have experience in the airline industry and whether they could manage an airline of the size of Sri Lankan Airlines, and secondly even if they could, whether they will be allowed to manage it without political interference.
To lose so many billions of rupees when that money could be used for so many other development activities is not misfortune or carelessness or a catastrophe. It is a crime.
The government should stop giving excuses and act fast to stem the flow of losses. It cannot be done by “quick fix” approaches like buying new aircrafts without first determining other key factors like positioning and management. Replacing ageing aircrafts is part and parcel of a good asset management policy. It must happen as a routine event and not as a sudden eureka type of decision.
With all due apologies to the President and the government, it has to be said the Sri Lankan airline has not been managed well. While understanding the huge tasks before the President, having fought and won the war and eliminated terrorism, the scourge of the country for decades, and having to address issues like the IDPs, resettlement and development, all of which are proceeding at fast pace, the President has to stop this haemorrhage. Too much money is going down the drain, and the country simply cannot afford it.
Politicisation of the airline industry has to stop. Even the best possible Sri Lankan managers will not be able to manage if politicians of all hues are breathing down their necks.
Sri Lankan Airlines, Mihin Air and Sri Lankan Catering should all have boards of directors who are strong, capable and with proven experience in the private sector, not just in Sri Lanka. There are so many Sri Lankan expatriate high flyers who have successfully managed institutions even large than these institutions. They could be appointed as Directors, as they will be needed only at Board meetings and for charting the strategic direction of these institutions, and to monitor their progress.
These Boards must be given the freedom to manage without political interference. If not, no patriotic and credible high flyer will agree to serve on the boards. The board should be responsible for appointing a Chief Executive Officer to run the enterprise. It should not be a political appointment.
Finally, the future direction of the industry rests on the courage that the President and the government has to make decisions that may not satisfy some of their supporters, but what will be in the national interest of the country.
Sri Lankans can be assured that President Mahinda Rajapaksa does not lack courage. He has demonstrated that in ample measure. What is needed now is for him to extend that courage to freeing the airline industry from the clutches of politicians and half baked managers, as he freed the country from the clutches of the LTTE terrorists.
- Asian Tribune -
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