SriLankan Airlines to fly high again!

Sri-Lankan-Airlines-PlaneThe symbol of progress SriLankan Airlines a glamour project of Sri Lanka is no longer viable to function as the government is not prepared to invest more money on this public enterprise. Because the national carrier has incurred losses due to mismanagement during the past several years under the last regime, is another institution been fraught with controversy contributing to the debt burden of the country. Government has decided to source a suitable partner for the successful management of the business operations to make it to fly high again.

Looking back at the history of civil aviation of Sri Lanka (then Ceylon) that started in 1911, when a Bleriot monoplane, the first aeroplane arrived on the shores of Sri Lanka by sea in a ship for the use of an Englishman Colin Brown. The aircraft built in France had a 25 horse power engine rated then as the best flying machine in the world, after it flew across the English Channel from Calais to Dover in 1909. The aircraft was exhibited in different locations and people had bought tickets to see the wonder machine that was capable of traveling in air. In 1911 Oster a German pilot arrived in Sri Lanka with a monoplane an Austrian machine named Etrich Taube. It looked like a dove and carried the name Taube, the German word for a pigeon. Oster became the first pilot to roll out on the grass at Colombo Race Course and shot out to the virgin sky of Lanka, managed to reach a height of 40 feet but crashed and sustained minor injuries. Later for his attempt at flying the Sri Lankan sky, Oster used Colin Brown’s Bleriot monoplane which was being displayed at the Colombo Racquet Club on exhibition. Again Oster was unlucky that time he collided with a bamboo sticking out of the Royal College building and crash-landed onto the Race Course grounds and suffered a shoulder dislocation, cuts & bruises and the plane was badly damaged. None of Oster’s sorties into the skies qualified to be told first flight in Sri Lanka as those sorties could not complete the essential basic characteristics of a full flight; the takeoff, circuit and landing safely. It was in the early morning on 7th December 1912, at Colombo Race Course grounds, two Frenchmen Georges Verminck and Marc Pourpre, managed to take-off in Bleriot aircraft, fly and land safely thus recording the First Flight in the skies of Sri Lanka.

In 1934 the State acquired 242 acres of coconut plantation at Ratmalana for the construction of a 600-yards long airstrip and the first plane; De Havilland Puss Moth landed on this new airstrip on 27 November, 1935 and was considered the ‘soft opening’ of the Airport that promoted private flying through the Aero Club of Ceylon in the 1930s. On February 28, 1938 the formal opening of the Ratmalana Airport for civil aviation and the official inauguration of the first direct regular airmail service under the British Empire Air Mail Scheme (AMS) commenced from Sri Lanka. At the height of World War II in the early 1940s, Allied military came to the island and established airstrips at Katunayake, Vavuniya, Puttlum, Trincomalee, and Palaly. A sea-plane base was also established in Koggala, for the operation of military aircraft. Until the early 1960s, Ratmalana was the primary airport for overseas-bound commercial flights.

In 1947, the Government created Department of Civil Aviation, and the office of the DCA was established at the Trans Works House, at Colombo Fort and purchased three war surplus Douglas DC 3 Dakota aeroplanes. The DC- 3s were all named after queens Sita Devi, Viharamaha Devi and Sunethra Devi a tradition which continued for some years. But the birth of the new State airline was still a few months in the future and the three aircrafts, under the aegis of the Civil Aviation Department, were extensively used for pilot training and route proving duties. In June 1947, Viharamaha Devi flew to London; the historic nine-day flight supplied further proof of what Sri Lankan aviators and the trusty DC 3 could accomplish. On Wednesday 10 December 1947 with a complement of 16 passengers, Sita Devi rose gracefully from Ratmalana runway inaugurating the Air Ceylon commercial flights and headed for Palaly and after a brief stop proceeded to Madras, returning to Colombo by the same route later that day.

Air Ceylon achieved the distinction of one of the world’s safest airlines, never recording a single passenger fatality throughout its 32-year history, apart from an accident on 21 December 1949 in which Douglas C-47 Dakota (registered VP-CAT) was damaged beyond repair in a crash landing at Tiruchirapalli Airport following a scheduled passenger flight from Jaffna. The 21 passengers and three crew members survived the accident. During its life span from 1947 to 1978, Air Ceylon entered into partnership with four international airlines viz. Australian National Airways (ANA), KLM Royal Dutch Airlines, British Overseas Airways Corporation (BOAC) and French airline UTA. Becoming Air Ceylon`s fourth international partner in 25 years, UTA provided a Douglas DC-8 jet for the long-haul services. Originally operated by UTA pilots with Sri Lankan cabin attendants, the DC-8 was subsequently bought outright by Air Ceylon and flown with a 100 percent Air Ceylon crew. This purchase was applauded as a breakthrough in Air Ceylon`s struggle to shed the shackles of foreign influence.

Air Ceylon had at last come of age and the last of the airline`s faithful DC-3s were phased out, a second Avro HS 748 was bought. However before long, the first signs began emerging that all was not well with the national carrier. Authorities in Europe impounded a DC-8 for non-payment of fuel bills, and staff morale plummeted when international services were suspended towards the end of 1977. A reduced domestic and regional operation soldiered on valiantly with the Trident and two Avros. On 7th September 1978, Air Ceylon suffered a cruel blow one of the Avros, just back from a trip to Jaffna, which parked at Ratmalana was exploded by a bomb planted inside aircraft, reducing it to a charred twisted hulk and miraculously no lives were lost. The surviving Avro and Trident struggled to maintain a semblance of an operation. Faced with a five-fold expansion of capacity, negative cash flow, lack of trained staff, unreliable services and insufficient passengers, it was bound to fail and it did in 1978.

A national airline was considered a glamour project, not of great value and should not be a priority for a developing Sri Lanka; it required too many talented and good administrators to get it off the ground when they were more needed for irrigation, agriculture, housing, industrial promotion and development. Yet due to the insistence of then President, who while wanting to move away from the socialist policies of the previous government that had bankrupted the country believed it was a symbol of progress. Singapore helped to launch it, but the decision to buy two second-hand aircraft against Singapore’s advice led them to withdraw their assistance and support. Air Lanka was set up by the Government in July 1979 and initially, the new air carrier operated 2 Boeing 707 jets on lease from Singapore Airlines, but Air Lanka ended up keeping the Boeing 707s, which was purchased in 1979, while a Boeing 737 was acquired for shorter routes. During the 1980s, the airline increased the number of destinations served and made additions to its fleet. During the mid-1980s the airline operated two Boeing 747-200 aircraft to a number of European destinations. The airline’s golden aircraft was the Lockheed L1011 Tristar, which served the airline from 1980 to 2000.

Air Lanka, which was state-owned, was part-privatized to the Dubai-based Emirates Group in 1998, when Emirates and the Sri Lankan Government signed an agreement for a ten-year strategic partnership. Emirates bought a 40% stake worth US$ 70 million (which it later increased to 43.6%) in Air Lanka, and sought to refurbish the airline’s image and fleet and gave full control to Emirates for investment and management decisions and the Air Lanka was rebranded ‘SriLankan Airlines’. SriLankan Airlines acquired 6 Airbus A330-200s between October 1999 and July 2000 to complement its fleet of Airbus A340-300 and A320-200 aircraft, the first commercial jetliner with a full fly-by-wire control system giving a tremendous boost as the first airline in Asia to induct the state of art aircraft. The weight savings from the replacement of heavy mechanical control cables provided a significant reduction in fuel consumption and as electrical controls are less complex and easier to maintain than mechanical ones, the use of fly-by-wire translated into lower maintenance costs.

The airlines was a profitable venture when it was operated in partnership with Emirates until the arrangement was disturbed on the instructions of the then President, after an incident when the airline refused to grant seat allocations for his 35-member delegation from London. The previous regime took initiatives in haste giving birth of a new State airline Mihin Lanka. The low-fare airline wholly owned by the government commenced operations on 24 April 2007. The airline operates scheduled flights from its hub at Bandaranaike International Airport to a number of cities in the Indian subcontinent, the Gulf States and Southeast Asia. It code-shares with its partner SriLankan Airlines on several routes, as part of a consolidation exercise between the two airlines. When the management contract expired on 31 March 2008 the government took over the business, had four billion in profit and the asset base was valued at 15.536 billion; Emirates sold its stake in shares to the Government of Sri Lanka at US$ 53 million in 2010, thus ending any affiliations the two airlines had with, after five years of take over there is a loss of 74.106 billion and asset valued at negative 102.816 billion, by then SriLankan airline had joined the one world alliance in 2012

The International Civil Aviation Organization which conducted an audit on the Safety and Security Oversight capabilities of Sri Lanka from 24-30 October 2010 found that the State’s compliance in the implementation of international standards and recommended practices is well over the world average with the overall compliance of over 85%. As per the overall audit results, Sri Lanka has been ranked number 4 amongst 34 States in Asia & Pacific Regions and 19 amongst 181 States in the world. The Government created an Airport Authority in 1979 for the development, operation and maintenance of civil airports in Sri Lanka and it survived only for three years. In 1983, the Government created an Agent established under the Companies Act to succeed the Airports Authority and to also provide Air Traffic Services which were hitherto handled by the Department of Civil Aviation. The Agent was identified as the Airports and Aviation Services (Sri Lanka) Ltd., which has later being identified as the Statutory Service Provider under the Civil Aviation Act.

Katunayake International Airport was developed under the Canadian Government’s assistance in 1963. With the development work was completed in 1968, International air transport operations were shifted from Ratmalana to Katunayake. The airport had a passenger handling capacity of 1.5 million per annum at the beginning and it was subsequently expanded to 6 million passenger per annum with one pier and connecting eight aerobridges, under the Stage I-Phase II of the Airport Development Programme which was completed in November 2005. The over motivated previous President decided to construct the country’s second international airport at Mattala, Hambantota, at a time the regional airports were in badly in need of renovation and upgrading in the country. The Mattala Rajapakse International Airport (MRIA) commenced operations with the landing of a SriLankan Airlines special Airbus A340 flight named ‘City of Magam Ruhunupura’ with then President on board, the project cost the Government 240 million dollars. Air Arabia landed at MRIA as the first foreign airline and Fly Dubai also commenced scheduled operations to MRIA. SriLankan Airlines and Mihin Lanka which also commenced scheduled passenger operations to and from MRIA suspended operation out of Mattala in January 2015. With a view to promoting MRIA, the Government declared in 2015, full ‘open skies’ policy at MRIA with all nine freedoms of air, available to airlines.

The national carrier has been fraught with controversy due to mismanagement during the last regime and is today in the red. For the past several years have incurred losses and is another institution contributing to the debt burden of the country. The present government is determined to make it to fly high again and has decided to absorb the outstanding debt and have instructed the new management to made changes necessary to ensure transparency and have put in place several procedures and processes to stabilize the company and deliver better results. There are many issues that the new management inherited such as to repay with interest massive loans taken for ordering new and unnecessary aircrafts at premium prices and making lot of money in the process and some of the contracts signed even into the future. The current loss of Rs. 11.6 billion includes an interest burden of Rs. 6.1 billion due to the inherited losses and includes the compensation of Rs. 2.5 billion paid for the cancellation of a lease for an unnecessary aircraft ordered for use the sole of then President. This overshadowed an otherwise strong improvement in the operating loss by 70% compared to the previous year, made possible by dedicated and capable individuals and the benefit from the fuel cost reduction. The significant reduction in procurement and fees paid to service providers, with increase in productivity all round helped to reduce the losses. The fully-owned subsidiary in catering enjoyed its best year ever, posting a profit of Rs. 3.69 billion, while good progress made in engineering, ground handling units and the aviation college.

Sri Lankan Airlines served 94 destinations in 44 countries with a fleet of 21 aircrafts to its name and a cadre of 6,800 including foreign expatriates; with its shares 94.68 percent are owned by the government and the balance 5.32 percent by its employees is to become the first Public Private Partnership (PPP) and are in search for a partner or even a buyer. While the government is seeking an investor for Sri Lankan Airlines, agreements have been signed to give three Aircraft to Pakistan. Three A330 aircraft and the necessary crew will be given to Pakistan International Airlines under a wet lease. While Pakistan is using aircraft from Sri Lankan Airlines to expand their flights to Europe, Sri Lankan airlines has in fact decided to cease services to Europe. Thereby, direct flights to Paris, Rome and Frankfurt have been ceased though the three airports had granted favorable time frames and space for SriLankan airlines flights. It was also reported recently that ground services provided by SriLankan Airlines have been taken over by Airports and Aviation Limited. Trade Unions claim that Sri Lankan Airlines will lose revenue amounting to eight billion rupees per annum as a result. Against a backdrop where the fleet has been reduced to 18 aircrafts and several services have been curtailed, the government published newspaper advertisements recently inviting new investors.

It is the hope of Sri Lankan that under a Public Private Partnership (PPP) SriLankan Airlines will soon regain its worldwide network to fly high once again.