SriLankan Airlines: Need Of The Hour, An Exit Strategy
By Rajeewa Jayaweera –April 17, 2016
Rajeewa Jayaweera
After 37 years of making losses, it is abundantly clear, the state of Sri Lanka does not have the political will or the expertise to do what it takes to manage and operate SriLankan Airlines as a viable commercial enterprise. Profits declared during a few financial years have not been from its core business of transport of Passengers and Cargo but from ancillary operations such as Ground Handling and Engineering in which the carrier has a monopoly and by disposal of assets from time to time.
Meanwhile, some ministers have begun speaking of restructuring the airline by way of infusion of ‘direct foreign capital or through a management agreement with a foreign airline’.
Every government is duty bound to decide and act based on what is best for the country. The national carrier played a pivotal role during the years of the armed conflict. It kept afloat, the hospitality industry, the movement of labour traffic to the Middle East and facilitating Sri Lankan exports even at times when foreign carriers withdrew. Traffic Rights could have been better managed allowing the national carrier a reasonable chance to compete with carriers with modern fleets, equipment and large networks. Emirates, Qatar Airways, Etihad, Oman Air, Kuwait Airways and Saudia now operate 84 weekly flights between their home bases in the Middle East and Colombo. It is expected to increase to 98 flights from summer 2016. If a Liberal Aviation Policy or Open Skies is what is best suited for the country in post conflict Sri Lanka, so may it be. However, the national carrier does not have the wherewithal to compete with them. It has been literally overwhelmed, especially in the European markets. This writer discussed this issue at length in an article titled “What ails our National Carrier IV – Question of a National Carrier or a Liberal Aviation Policy” published in the Sunday Island edition of 19 July 2015.
The most important and fundamental issue that need be addressed is ‘does Sri Lanka need an airline’. It need be a hard business decision thought out rationally and not emotionally in the context of archaic concepts such as ‘national carrier’, ‘flag carrier’ etc. nor in the context of the welfare of its 7,000+ employees. More important is that every citizen has to bear a debt of LKR 6,000 on behalf of the national carrier and it is still increasing. The only justification for an airline would be if it contributes to the growth of the country’s economy without being a burden to the Treasury.
