SriLankan in storm over Hill

With his work visa revoked, Emirates appointed SriLankan Airlines CEO Peter Hill took wing to Dubai on Thursday beating the government deadline for him to leave the country by one day, but the battle seems far from over with his parent airline said to be resorting to legal avenues to obtain redress.

When The Sunday Times contacted Mr. Hill on Friday in Dubai and asked him whether it was true that the Emirates airline had served a letter of demand on the government of Sri Lanka through a leading local legal firm, he said he was not aware of what action his parent firm was taking over his expulsion and requested us to contact the Emirates management there. But we were unable to do so due to Friday being a holiday in that Islamic nation.

Mr. Hill who is married to a Sri Lankan has a luxury bungalow at Kotte with a swimming pool. Asked whether he had not tried to obtain an ordinary resident visa in Sri Lanka because of his personal stakes in this country, he said he had so far not done so. The Emirates Airlines President has already announced that despite the revocation of his work visa by the Sri Lankan government, Mr. Hill would continue to serve as SriLankan CEO from Dubai till the management contract ran out in March.

Meanwhile, the national carrier is said to be suffering a severe brain drain due to unprecedented cost cutting exercises introduced in recent months. Its future is now in doubt with public acrimony breaking out between the Government and Emirates over the refusal of SriLankan to provide seats to the Presidential entourage to return from London early this month.

This was after President Mahinda Rajapaksa attended as the Chief Guest at the passing out parade of his son Yoshitha from the Royal Naval College at Dartmouth. Following this incident the government retaliated by revoking the work permit of the CEO. In the last two months alone, insiders reveal that at least 14 pilots and ten engineers have resigned from the airline and at least five more engineers and ten more pilots are scheduled to leave in the coming weeks.

In addition, there is a general exodus among other skilled cadres as well. They are being snapped up by the fast expanding airline industry in the subcontinent and West Asia. Emirates Airlines President Tim Clark and Director Garry Chapman too are due in Colombo on Wednesday for what some aviation sources term as break-or-make talks with the Sri Lankan government on the renewal of its existing ten-year management contract scheduled to expire in March and the issues arising from Mr. Hill’s effective expulsion.Many have pointed out that the existing contract is highly disadvantageous to Sri Lanka and the opposition UNP came to power in 2001 vowing to renegotiate the contract, but it soon backed down when Tim Clark insisted that “a deal is a deal”. There is some speculation whether the reverse UNP decision came after some key people enjoyed some Arabian nights in Dubai.

Though the Emirates management of SriLankan has been crowing about how they managed the airline without a single cent from the Sri Lankan Treasury since they assumed the management of the airline and how they even returned profits in most of those years, critics counter these arguments by simply pointing out that they had achieved such results by selling the national carriers own aircraft.

At the time of the privatization SriLankan owned nine aircraft, including five nearly new Airbus aircraft. It now owns just one aircraft, while all others are leased from other airlines. Critics claimed that at the time of the privatization the airline had already been turned around and was earning profits under the stewardship of Chairman Harry Jayawardena.

They said it was not the Emirates that should be punished, but the so-called Sri Lankan experts and Treasury big shots who negotiated the lopsided agreement to the disadvantage of the country.“There are so many hidden disadvantageous clauses which are not in the main body of the contract and one such clause stipulates that if at the end of March the Government does not buy back the 43.6 per cent stake in SriLankan held by the Emirates it automatically gets to manage the airline for a further five years”, they alleged.

There was speculation yesterday that Mr. Jayawardena who continues to be the government-appointed Chairman since privatization might himself bid for the airline if the existing management contract with the Emirates is not renewed. But it is alleged that Mr. Jayawardena who has benefited by the airline throwing several hundred million rupees worth of insurance business to his firm, Sri Lankan Insurance, each year has generally ignored any wrongdoings by the Emirates management. Mr. Jayawardena who has been abroad in recent days was due back in Colombo over the weekend.

Prior to crucial talks with Tim Clark, President Rajapaksa has summoned a meeting with the national carrier’s powerful Pilots Guild on Monday. In recent months with government appointed directors and the Treasury keeping mum it is the pilots who have been blowing the whistle on alleged crony management practices of top managers of the national carrier.