Will Covid-19 finally tank the pet project of the former UNP strongman the late J R Jayewardene, SriLankan Airlines, launched originally as Air Lanka?
SriLankan Airlines was pie in the sky, in the tenure of most governments and that fact is so painfully obvious. Today, with the pandemic, top notch global airlines are facing closure, and some have already called it a day.
SriLankan Airlines is facing a tall order to be back in business, and that’s obvious. It’s through no fault of the Management. This pandemic time is not the time for aviation, period.
But, it’s time to take stock of the airline’s origins, its progress to the status of perennial white elephant, and what it reflects in terms of a snapshot of economic policy as applied institution by institution in this country.
It’s an old story, but Lee Kwan Yew the iconic founder of the Singaporean miracle, is quoted as saying that he advised the late President J R Jayewardene against embarking on his pet airline project.
But the ex-President insisted. The Singaporeans provided an advisory team, but they soon pulled out when the first chairman Rakkitha Wickramanayake insisted on purchasing two spanking new aircraft against the advice of the Singaporeans.
LONGER
Why did Sri Lankans entertain a pipe dream that they were unable to convert into a profit earning enterprise and insist on keeping it afloat time and time again when it was underwater?
Hubris. Covid-19 has given the excellent opportunity for the new government to rethink the national airline. Whether it has to be folded up is eventually the Government’s decision, but what is clear is that there are certain verities regarding the Company that no longer can be ignored.
One is that it will be a pipe dream in itself to bail out the airline at this juncture. Most will say that there is no moral justification whatsoever to do it. It was Sri Lankan born entrepreneurial wizard billionaire Chamith Palihapitiya, a Canadian citizen, who made some now rather famous remarks about bailouts in the USA.
‘Venture capitalist Palihapitiya recently made headlines with his strongly worded beliefs that the government should not bail out large corporations that are facing bankruptcy as a result of the recent economic slowdown,’ states an article in Yahoo Finance. Palihapitiya said that it’s ridiculous to argue that Company bankruptcies should be avoided on account of employees. He said employees would be receiving just recompense, in terms of the bankruptcy packages that require such severance arrangements.
It’s reiterated that what would be done with SriLankan Airlines would be decided by the Government. But what’s certain is that it will never be business as usual — and already, the Chairman has stated that he will seek the opportunity to rationalise and restructure the airline, or words to that effect.
But that was sometime earlier. This far into the pandemic, the picture has changed even more markedly. Are we a country that can or should keep these large and usually bleeding concerns going?
Shouldn’t we be wedded to a system of priorities, as was suggested by Lee Kwan Yew at the very inception of the airline? To go back in time, what Lee Kwan Yew said at that juncture was that the airline would require the services of the cream of administrative talent. He said it’s better to have them serving in the vital areas that would matter to the country — such as food production, infrastructure, etc.
There could have been a case for a national airline during JR Jayewardene’s time, but not of the type that he eventually established. It could have been a smaller regional airline that could have managed with minimum investment and start up costs.
CARRIER
Hungary, Norway, Sweden and Brazil are all countries that do not have so called national flag carriers. The U.S.A. does not have a national flag carrier as well — even though the country had some of the best airline networks that service North America and other parts of the world. Druk Air or Royal Bhutan Airlines the national flag carrier of the Kingdom of Bhutan services just twelve Asian destinations and is geared to be in sync with the country’s carbon neutral goals and the Gross Happiness Index. It’s a tiny airline that operates without much fanfare but does its job and is still a national carrier.
SriLankan Airlines has not been able to have this kind of rational, small but efficient operation for several reasons, one being that it was an operation that serviced the egos of rulers such as J R Jayewardene. In addition it was an operation that advanced the corrupt intent of other various adventurers who over time served under various governments on its Board.
In short, the National airline became a vanity project from the time JRJ unveiled it and its first Chairman Rakkitha Wickremenayake ordered those two extra unnecessary aircraft against the advice of the founding Singaporean advisors.
There will be others who argue that having a national airline is a matter of national pride. They would say that this factor outweighs the financial disadvantages.
That argument is ludicrous considering the size of the financial outlay. Losses run into tens of billions of rupees in the best of times.
That’s not just a financial loss to the nation, it has also been a factor that has so many ethical dimensions. But perhaps more than all it questions the ability of the country’s administrators under various previous governments to do a job, and the psychological effects of that are telling.
It’s best to be self-effacing about these issues, and not indulge in kite flying exercises.
In the backdrop of Covid-19, when the aviation industry has for all intents and purposes become non-existent for the time being, it is best that the Government rationalises the decision on whether to keep the airline afloat or not. This is most definitely not an indictment on the new Management. The current Chairman is a top bracket businessman, but before he had time to so much as call a Board meeting so to speak, the pandemic struck.
If the flag carrier is liquidated, it will leave room for a rationalised service of the nature of Royal Bhutan Airlines in the future. Or perhaps the current structure could be drastically downsized to the scale of Druk Air.
The details of any future operation are not for us commentators or observers to decide. All that can be said is that the nation cannot have some obscene drag on its finances such as a national flag carrier that is heavily subsidised or loss making, especially when the country is forced to recover from the economic perils of a pandemic.
VANITY
At the time of recovery from the pandemic, there are many small and medium entrepreneur sector folk that have the ideas, and the passion and drive to implement them in the face of adversity. An ailing large scale airline is the worst message that could be given to such people.
The fact that SriLankan has always been a large scale operation with a history is the worst excuse to keep it that way.
The fact is, no excuses should have been needed to rationalise the airline’s operations but now the Covid-19 calamity offers the exact right climate for an exit from J R Jayewardene’s ludicrous vanity project.
What form that will take and what time frame is intended, and whether it would be a phasing out or an entire shut down of operations or whether it would be an interim halt to the airline’s operations with a time frame to start something in the nature of Druk Air — or whether there will be an entirely different strategy — will be up to the policy makers. But this is the best time to stop dreaming about a pie in the sky project launched with lotus eating abandon, without any proper basis, just to satisfy one ruler’s ego in 1979.