SriLankan, a hopeless case even with a management change: Eran

  • Says airline has no business and economic proposition in current context
  • Cites national pride as only reason keeping SriLankan in air

Airlines serving out of the Middle East and Southeast Asia have pushed SriLankan out of competition in other routes.
The previous management headed by former President Mahinda Rajapaksa’s brother-in-law, had grossly mismanaged the previously profitable airline, leading to the accumulation of Rs.128 billion in losses from 2009-2014—a period highlighted by  thousands of jobs in SriLankan given to Rajapaksa’s political supporters and falling quality standards.
The Rajapaksa administration also saw SriLankan ordering eight wide-bodied long-haul Airbus A350-900 aircraft at above the market rates, which now appear to be related to the scandal rocking the foundations of the Airbus management in Europe.

Four of the aircraft have already been cancelled with around US $ 100 million in penalty payments.
Over the previous decade running up to 2008, the Middle Eastern giant Emirates owned 40 percent of the shares in SriLankan and managed the airline.

Rajapaksa chose to interpret some of Emirates’ professional management decisions as personal slights and kicked the airline giant out of SriLankan.

Interestingly, national pride hasn’t blown out of proportion in the case of SriLankan, compared to the flak the current government is receiving for ‘selling out the country’ from protectionist elements, for finding partners for other non-performing state assets.
This is perhaps due to the fact that the previous experience has been positive, with Emirates running SriLankan at high standards and profitability and posting a Rs.4.9 billion profit during the final year Emirates managed the airline.

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