- The Government of Sri Lanka(GOSL) took over the management of Sri Lankan Airlines from Emirates in April this year. You were an Independent Consultant during the transition period. What do you think of the government’s decision to part ways with Emirates?
The arrangement by which Emirates managed the Airline was in any event due to end by March 31, 2008. From a national interest perspective it was an opportune moment to take over the management as the interests of Emirates and Sri Lankan Airlines began to diverge. For instance, Emirates had grown into a resource rich Airline which could have the luxury of more relaxed internal management processes while the challenges faced by SriLankan Airlines required more stringent internal processes.
While Emirates was an expanding Airline its attention was more focused on such expansion while Sri Lankan Airlines had to set itself more modest objectives and as a result required a different style of management. However although Emirates are no longer in charge of the management, it remains a Strategic Partner with representation on the Board and therefore its continued participation will be of great benefit to the Airline.
- What was your own role as an Independent Consultant during the transition of the management from Emirates to the GOSL?
The task assigned to me was to identify the issues that would arise during the transition and suggest ways in which the government should address those issues as well as to make an assessment of the strengths and weaknesses of Sri Lankan Airlines.
- What qualifications and experience do you possess to undertake a task of such magnitude?
I am an Electrical Engineer by profession and count over 25 years of international experience in technology, management and business consultancy. I am also a Fellow of the Institute of Business Management Consultancy in the United Kingdom. The assignment that I undertook was essentially a Management Consultancy. Contrary to some reports I have never claimed to be an aviation expert. My CV clearly bears this out.
- What made the President pick you for the task?
I think he was aware that I had executed a similar assignment in the transition of Mobitel from the management of Australian Telestra to Sri Lanka Telecom. I had also functioned as Advisor to Sri Lanka Telecom where I assisted in reducing the dependency on foreign nationals in management and replace them with locals as a result of which there was a saving of more than Rs. 500 million a year for the Company.
Besides I was subjected to a rigorous interview process conducted by the Minister of Ports and Aviation, the Secretary and the Additional Secretary of the Ministry before I was appointed by the mnister with the concurrence of the President.
- Can you tell us if you have been paid a consultancy fee for your assignment and if so how much?
No fee was paid and it was entirely an honorary job although I believe that a similar consultancy if handed over to a Consultancy Company would have cost at least Rs.50 to 60 million.
The two individuals that I picked to assist me-with the concurrence of the Minister of Ports and Aviation - Captain Les Rajapakse former Board member of SriLankan Airlines and former Captain of Saudi Arabian Airlines and Mr. Javid Yusuf Attorney-at-Law and former Ambassador to Saudi Arabia too gave of their expertise, time and effort without any fee.
- But there are allegations that you were put up at the Hilton and travelled every week on Business Class to Colombo as well as to visit friends overseas.
The decision to put me up at the Hilton which is adjoining the SriLankan Airlines office at the World Trade Centre and fly me to Colombo on Business Class was taken by SriLankan Airlines on its own initiative and not on my request. And it is also the usual practice that any Consultant carrying out a high level consultancy of this nature would be facilitated in this way in any part of the world.
However if you look at it logically it was the correct decision. I would board the flight every Wednesday at 12 midnight after working the whole week at my regular job as Advisor to Saudi Telecom. I would arrive at 7 a.m. on Thursday morning at Katunayake after about three hours sleep and be at the SriLankan Airlines office by 9 a.m. and continue working till late evening on Thursday, Friday and Saturday leaving Colombo on Saturday evening to return to Saudi Arabia. This process went on till April 1.
The allegations that I have used SriLankan Airlines to visit friends and relatives in world capitals are diabolical lies and can easily be verified from the SriLankan Airlines office where details of the travel of all Board Members are recorded.
- What was the outcome of your Consultancy and how will it benefit SriLankan Airlines in the task of consolidation under GOSL management?
The whole exercise was conducted through a participatory process with the full and enthusiastic participation of the senior management and other staff of the Airline. The end result was the production of four segments of the outline of an overall strategy under the headings of Quick Wins, Risk Management, As Is Assessment and a Draft Strategic/Business Plan.
*Quick Wins: identification, analysis and implementation of high impact initiatives to capture and boost the confidence of all stakeholders (public, shareholders, customers and staff) and optimize business operations in the context of any adverse effects of the transition.
*Risk Management: identify, quantify and prioritise all risks related to transition and to create a risk response plan and manage it effectively.
*As Is Assessment: study and analyse the current status; assess the current status of the Company in terms of business strategies, financial processes, technology, leadership, competition, current management practices etc., and provide remedies if deficiencies are found
*Draft Strategic/Business Plan; agree on key corporate strategic goals and develop a Draft Business Plan for air transportation and other business units
These have been presented to the President, the Minister of Ports and Aviation and to the Board of SriLankan Airlines in April 2008.
- Has the Board of SriLankan Airlines discussed these reports?
Not yet. I am hoping that it will be done soon as it will be extremely beneficial in strategizing for SriLankan Airlines future.
- One of the significant things that took place during the transition period was the exodus of pilots. What steps have been taken to address these issues?
On April 3, 2008 the Pilots met me and discussed their grievances. I requested them to set out their grievances in writing which they did the following day. Thereafetr on April 6 I forwarded their grievances to the Chairman Mr. P.B. Jayasundera suggesting that an independent committee comprising Board Members be immediately appointed to address those matters.
- Is it not correct that SriLankan Airlines is running at an operating loss at the moment mainly due to the high oil prices? How do you think the Airline can overcome this situation?
At the time of studying the transitional issues we identified the fact the Airline was incurring an operational loss in the core business and identified a range of short term and long term implementation strategies to address the issue.
Some of these were to increase productivity levels, to ensure more effective procurement processes, re-visit loss making routes and look at best practices in the industry. We also identified the need to increase the group profits to minimize losses arising from a highly competitive environment.
The increase in oil prices is common to all Airlines and different Airlines have adopted different strategies. Cost cutting strategies and increasing the revenue in order to offset increase in oil prices are some of the strategies adopted so far.
- Mihin Lanka is now non-operational carrying a burden of a loss of Rs. 3.5 billion. How do you think SriLankan Airlines and Mihin Air can work together and what common synergies can be expected in the exercise such as regional routes, ground handling, catering and other services without further burdening SriLankan Airlines?
This issue was not looked into during the Consultancy as it was not an issue arising from the transition. But having a Budget Airline for the country is certainly a good thing. If both SriLankan Airlines and Mihin Air work together it will benefit both Airlines as well as all Sri Lankan citizens. In addition to the synergies you mentioned other common synergies could arise through sharing of maintenance facilities, IT infrastructure and so on. But any such arrangement should be carefully thought out and its financial feasibility assessed before being put into operation.
- Are there moves to upgrade the fleet of ageing aircraft and if so on what basis would they be purchased or leased?
During the Consultancy we looked at the issue of re-fleeting in detail as it is one of the most important assets which generate revenue. In the current business environment and in the context of the Airlines financial position dry leasing of Airlines is probably the best option.
- There were reports that Emirates management kept SriLankan Airlines out of its one time destinations like Sydney, Amsterdam and Zurich. Will the Airline be looking at re-opening those routes?
In our Strategy Development exercise during the Consultancy we have looked at ways of increasing revenue and decreasing costs. In that respect all the routes have been looked at including the destinations you have mentioned based on short-term and long-term profitability. The new management will take appropriate action after studying the issue in more detail.
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