Gota’s Address To The Professionals On How Fools Made The Rulers Bloody Fools
By Arun Kumaresan –December 4, 2016
Arun Kumaresan – Air Vice Marshal (Ret’d)
A news item appearing in Daily FT dated Monday 28 November 2016 relates to an address by Gotabaya Rajapaksa (GR) at ‘Viyathmaga’ (Professionals for a better future) held at Palatuwa, Matara. GR’s own acknowledgement of the role played by him in the takeover of Sri Lankan Airlines needs a further evaluation in the context of the eventual outcome of the takeover.
GR contends, quote “It was I who facilitated the meeting between the pilots union and President Rajapaksa. In most probability it was on their recommendation that President Rajapaksa did not extend the Emirates contract.” Due to his own admission, there can be no debate on his role. The implication this decision had on the airline and the Nation needs to be told ‘LOUD AND CLEAR’ to the ‘Professionals for a better future’, intelligentsia and the common man of Sri Lanka.
Air Lanka was established as the flag carrier of Sri Lanka, as the then government closed down the bankrupt Air Ceylon in 1980. Air Lanka, which was state-owned, was partially privatized in 1998, with the investment made by Dubai-based Emirates Group. Emirates and the Government of Sri Lanka (GOSL) signed an agreement for a ten-year strategic partnership. This agreement included exclusive rights for all aircraft ground handling and airline catering at Colombo for a ten-year period. Emirates purchased a 40% stake worth US$70 million (later increased up to 43.6%) in the then Air Lanka. It also sought to refurbish the airline’s image and fleet. Whilst GOSL retained the majority stake in the airline, the investment and management decisions were left to Emirates. In 1998, Air Lanka was re-branded as Sri Lankan Airlines.
There are two noteworthy events that are relevant and needs mention; Government of Sri Lanka held majority stake and the rebranding by Emirates gave it the most befitting name – SRILAKAN- that made all Sri Lankans to emotionally own and value even to date. To cut the long story short as stated by GR due to his intervention, Emirates handed over the control of the national carrier to the GOSL in 2008. The economic benefits of this ten year partnership were as follows. Sale of 40% stake yielded Rs 7 Billion (Assumption: USD in 1998 was at Rs 100). Accumulated profit at the time of hand over in 2008 was Rs 9.25 Billion. The country benefitted and filled its coffers with the 57% of GOSL share holding amounting to a tune of 5.27 Billion. It should be noted that during this partnership of 10 year period from 1998 to 2008 with Emirates. GOSL did not dole out a single cent to the airline.
Then we come to post 2008 when GOSL took full control and managed the airline on the advice of some pilots to GR and later to his brother MR. The cash flow to manage the airline was pumped in by the Treasury. The balance sheet tells the rest and the resultant accumulated loss for the period from 2008 to 2015 is Rs 128 Billion. The amount would have gone up by another couple of billions to date (Rs 10 Billion plus to cancel the unwanted Airbus 350 deal due to economically untenable on a functional business model. Another few Airbus 330s’ ordered was released to another airline due non viability as best option to minimize potential loss. A Swiss inquiry into Airbus Consortium’s ethical practices may reveal some beneficiaries who benefitted under the table!!!!)
