15th February 1998


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We are here to advise – Emirates

AirLanka merger

By Frederica Jansz

Emirates Airlines will handle the management of AirLanka for the next ten years from April this year. It will also provide expert management advise to AirLanka, while airline officials in the U.A.E said the fallback for Emirates Airlines would by and large be the dividend on the 40% equity of AirLanka. The government of the U.A E. is confident, they said, that AirLanka is a viable carrier for investment.

Unconfirmed reports say that the future board of AirLanka could include officials from the Public Enterprises Reform Commission (PERC).

Emirates officials in the U. A.E. have dismissed claims by AirLanka last week that the national carrier has a net profit of Rs 1200 million for the Summer of 1997. This is only an operational profit at the cost of commercial loss, they said.

AirLanka staff say if the airline has made a net profit of Rs.1200 million, then the airline should consider paying a bonus to the staff, as the Rs. 1200 million is an operational profit. This however remains at the discretion of the management.

Contrary to initial reports, Emirates will not provide aircraft, aging or otherwise to AirLanka, but instead will lend expert advice to the airline. Such professional expertise they say, will focus primarily on the non viability of maintaining three models of aircraft. AirLanka at present flies the L1011 (Tristar), Airbus A 340 and an A 320.

Emirates say all these three models are not technically viable in that they share no commonalities.

AirLanka should instead phase out the L 1011 and the A320 and instead have a fleet of A 330 to complement the A 340.

AirLanka’s unit cost will then go down they say, where it will be easier for cockpit crew, spare parts and in a wider sense, flight schedules to be used to maximum benefit.

However officials at AirLanka said the A 340 and A 330 being wide bodied aircraft will not be able to fly into Trivandrum and Trichy, since the runway is too short. This is the reason why the A 320 is used. The A 320 is a 150 seater and usually flies to full capacity once a day to Trivandrum and Trichy.

Emirates insist that AirLanka should purchase a fleet of A 330’s on “their own steam.”.

Asked how this would be possible, given that AirLanka yet nurses a debt over the purchase of three A 340 Airbuses, Emirates said since the management at AirLanka profess such “tremendous increase in profits” that they should then purchase the required A 330’s out of this profit.

AirLanka last week issued a press release that boasted of Summer profits for 1997 being at Rs 1200 million. This, they said would be increased for 1998 by a further 2 billion.

Japan being the largest lender for aircraft lease, have recently refused further loan facilities to any airline.

This being the case, Air Lanka would need in the future to supplement leasing arrangements with banks in the U.K and Europe which ask for much higher premium. Since AirLanka would find it difficult to pay such high premium without borrowing from the government, such arrangements could however be facilitated if AirLanka were in a partnership with another airline, Emirates said.

Meanwhile Emirates Airlines have placed an order for A 330’s with Airbus Company Ltd. It is now rumoured that Emirates prefers the A 340 and saw this viable alternative when AirLanka was placed on the market. Emirates Airlines now insist that its future business plan for AirLanka will include advice to re-fleet, by purchasing A 330’s.

Emirates will have a complete say in management control for the next ten years, to the extent where even the powers of the board of directors will be limited or at the very least will remain a group of figureheads. After all, Emirates say there can be no point in handling 100% management control and then being answerable to a board of political appointees.

If there is any opposition to Emirates Airlines with regard to handling the management of AirLanka “we will just pull out,” they said, insisting they not be individually named in this article.

Claiming to have the best proven track record in the field of aviation, Emirates Airlines say in a period of ten years they have expanded to the extent of flying to 36 destinations while AirLanka after seventeen years in the field of aviation fly only to 22 destinations.

Emirates officials declined to comment on how much if any, the Arabian airline intended investing into the coffers of AirLanka. The management expertise Emirates will provide will more than compensate, they said.

Emirates meanwhile dismissed claims that senior management staff at AirLanka are attempting to undermine the partnership. ‘They are fighting a losing battle,” they said.

Other aspects of the takeover could mean code and profit sharing for Emirates and AirLanka.

This would mean that Emirates would perhaps share flight routes not yet initiated by EK. For example a UL flight to Tokyo would in the future read as UL/EK 456/7 which would benefit the two airlines into the sharing of profits.

The potential of exploiting landing rights to Sydney through AirLanka is yet another attraction for Emirates Airlines due to the Sydney Games in the year 2000. A direct flight from Colombo to Sydney will be an added advantage from a passenger point of view.

“Fed up with constant bungling”

Staff at AirLanka say they welcome the new management of Emirates Airlines. Fed up with constant bungling, a majority of the staff at AirLanka say they have had enough.

It is time a professional management team takes over the airline and rejuvenates an establishment, that reeks of incompetence, they said. Contrary to management pronouncements stating AirLanka’s increased cash flow, AirLanka employees complain that they remain neglected.

AirLanka technicians have threatened to strike if a salary anomaly which has been long standing is not adjusted forthwith.

Anil Chandrapala, Secretary to the Technicians Union at AirLanka said, if no resolution is found by Monday, February 16, 1998, the technicians intend to strike. The last time the technicians received an increment in pay was over six years ago, he said.

Cabin crew received an increment in allowance ten years ago. Hotels for in-flight crew are changed constantly at the advice of Management. While most hotels in Europe provide a package of bed and breakfast, the Management of AirLanka has effectively managed to get a per head room rate reduction at slip stations minus breakfast.

For example a reduction of ninety pence and five guilders was negotiated by AirLanka in London and Amsterdam respectively. Angry staff say the image of the airline has been devalued in the eyes of foreigners by indulging in such ‘disgraceful’ bargaining. Cost cutting exercises are carried to extremes. Passengers on a UL flight delayed in Frankfurt were served sandwiches and drink, but not the passengering crew. The reason according to the station manager was that the crew were not entitled.

On a 240 seat airbus only some 50 blankets are made available for passengers. Kleenex and quality cutlery have also received the chop. Plastic teaspoons have replaced silverware, in yet another cost cutting exercise.

A Colombo-London return initiated on the 15th of December 1997, allows a twelve hour rest for crew before operating back to Colombo again. This cost cutting procedure has been implemented in order to avoid an additional crew being kept on layover.

Who is the fairest of them all?

Gamini Wethasinghe, Chairman, Peace Air, says he offered US$ 85 million for 40% equity of AirLanka. He says however that the Public Enterprises Reform Commission, (PERC) did not even acknowledge the offer which he believes to have been the highest made. Mr. Wethasinghe’s offer was later rejected by the Technical Evaluation Committee, (TEC).

Mr. Wethasinghe has accused PERC of not being transparent and further alleges that PERC has bypassed the Ministry of Aviation and the Director General of Civil Aviation and his department in conducting secret negotiations with Emirates Airlines. PERC has continued to remain obstinate and not divulge details of the present negotiations with Emirates Airlines, apart from saying Emirates remained the only technically qualified bidder for AirLanka.

Lame arguments in resignation story

From the Green Corner

By Viruddha Paakshikaya

Expressing his es teemed opinion in the ‘Blue Corner’ of The Sunday Times last week, “Paakshikaya”, allegedly an SLFPer, attempts to make a case for “General Anuruddha Leuke Bandara Ratwatte” in the now infamous resignation affair.

In so doing, ‘Paakshikaya’ - while trying to carve a distinct identity as a SLFPer and not a member of the People’s Alliance, a good strategy, no doubt has indeed painted himself into a corner, attempting to compare the Ratwatte resignation to the undated letters of resignation submitted by UNP MPs to President J.R. Jayewardene, way back in 1982.

Those of us in the UNP who were privy to history being made in intimitable JRJ style do not need to rummage through old - and now defunct - newspaper columns to ascertain what happened.

The Old Fox - now a fond rather than a derogatory reference - won the Presidential Election on October 20, 1982. The Working Committee of the UNP met thereafter on October 27 and decided to hold a Referendum to extend the life of Parliament. A resolution authorizing the leader of the Party to obtain letters of resignation from all UNP members to reorganize the government Parliamentary group was adopted at this meeting. The Cabinet met the next day and endorsed this decision. The UNP Parliamentary group met that afternoon and endorsed the decision of the Working Committee and the Cabinet. (Whether the ministers looked glum or cheerful is a moot point. To me, Minister Mahinda Rajapakse always looks cheerful. Minister Mangala Samaraweera always looks glum.)

By evening, undated letters of resignation addressed to the Secretary General of Parliament were handed over to President Jayewardene who kept them in his custody. The letters would become effective only when they reached the Secretary General and JRJ was to decide which letters were to be sent to him - this he did, with fifteen of those letters. By-elections were held for these seats and the likes of Dinesh Gunewardena, Amarasiri Dodangoda and Richard Pathirana entered Parliament.

There can be no parallel between this incident and Ratwatte’s publicity stunt. The MPs did not submit resignation letters to the Secretary General of Parliament; they only addressed the letters to him and gave them to JRJ. Ratwatte however did submit a letter to the President. Only a simpleton (as Paakshikaya calls himself) - or a gullible fool - could have seen a parallel. Would Ratwatte be considered as having resigned, if he wrote a resignation letter and handed it to wife Ramani for safekeeping?

When Ministers did submit their resignations to JRJ, he acted promptly and had new Ministers sworn in. And, unlike in Paakshikaya’s Party, Ministers did resign in that UNP regime - M.D.H. Jayewardene, E.L. Senanayake, Cyril Mathew, Ronnie de Mel, Gamani Jayasooriya, E.L.B. Hurulle, P.C. Imbulana, D.B. Wijetunge, Bakeer Markar, M.S. Amarasiri and Nissanka Wijeratne all resigned for one reason or the other.

Unfortunately - or fortunately, from Paakshikaya’s perspective - these honourable gentlemen did not have the cunning or the where withal to organise protest marches and burn effigies of themselves, sunglasses and all. And JRJ was not the kind of leader to dilly-dally with a Minister’s resignation letter either.

So, for “General Anuruddha Leuke Bandara Ratwatte”, this resignation must be his second biggest mistake in politics. The first was of course, to leave the UNP in the sixties when he was a MMC in the Kandy Municipal Council.

But he must not be blamed for that, because he had no cousin in the UNP to make him a Lieutenant Colonel by lunch (he was a Lieutenant at breakfast) and a niece to make him a General by lunch (he was a Lt. Col. at breakfast that day)!

We shall not dwell on his walk with a ‘Basthama’ and a limp (which truly depicts this government’s war efforts in ‘general’) for that would be getting utterly personal, and we must maintain some decorum in cut-throat politics though some do stoop to the level of questioning the paternity of the son of two Prime Ministers!

But this latest resignation episode makes us wonder whether the good general’s much publicised walk in Tiger territory (that helicopter incident) was also state managed just like his resignation. (Anyway, could the amiable and once retired Mr. Rajaguru have walked all that distance to safety when he cannot stand still for a couple of hours)or maybe he was wearing a looser pair of shoes.

As we in the UNP see it, Ratwatte’s letter of resignation was not in response to a call by the UNP. If that claim is to be believed it would be as ridiculous as believing the claim by Jeyaraj Fernandopulle that salaries of Parliamentarians were raised because UNP MPs asked for it. So do we have a PA government which does only what the UNP wants done?

No, Sir, Ratwatte was annoyed with the President when independence celebrations were shifted to Colombo against his advice. Ratwatte hoped to stage manage the resignation with the “public” - consisting mostly of employees from the Petroleum Corporation - demanding from him not to resign.

All this was compounded by Gamini Iriyagolla, a practising lawyer who pointed out that under Article 47 of the Constitution, Ratwatte had vacated office when his resignation was delivered to the President. Ratwatte was stumped but the self-appointed Third Umpire, G.L. Peiris ruled him not out. As we well know, even Third Umpires err.

Perhaps having realised his folly, GL wisely lost his voice thereafter. Now that he has sold his package to two thirds of the world and travelled around the world studying the Constitutions of South Africa, Malaysia, France, Britain (which has no Constitution) and the latest in Italy (where government’s are breaking down faster than Fowzie’s CTB buses), GL has found that the package will no longer pass muster. Left to argue his case on behalf of his client, the “General”, GL made a disaster of the case - so Ratwatte’s defence was worse than his offence of resigning!

Now that ‘Paakshikaya’ has been enlightened on what happened to the resignation letters during our days - and how different it was - we may well tell him, yes, we also want the war won, not for the ego of a pocket edition Montgomery or to boost the fluctuating fortunes of a lame duck President, but for the Nation’s wellbeing.

But, why we have our differences with the “General” is because we disagree with the way the war is being fought in his Ministry.

To cite just one example, tomorrow (February 16), the Air Force Chief reaches retirement age. A Presidential Committee that was headed by the Defence Ministry Secretary and included a former Air Force Chief, a Former Army Commander and a former Inspector General of Police held unanimously that the Air Force Chief was incompetent, that morale was low in the Air Force, of irregularities in procurements etc.

That was three months ago. The Air Force Chief has the audacity to say he has not seen this report, but even to the simpleton mind of Paakshikaya, it must be obvious that this is not the way to defeat Prabhakaran. We can, of course, change our mind if the Air Force Chief quits tomorrow!

Moreover, there was President Kumaratunga, Commander-in-Chief of the Armed Forces, slipping up when she told TIME magazine that she was prepared to give Prabhakaran ten years of undemocratic rule in the North, without elections, and for his cadres to become policemen.

And then what? Was the LTTE going to hand over control of the North to the Central Government, after ten years? We in the UNP would be in power then and this is the legacy Kumaratunga would leave the UNP to inherit - God forbid!

Our advice to ‘Paakshikaya’, therefore, is to follow the path of the son of your revered leader and join the UNP. Or else, at the rate resignations are being forwarded and withdrawn, we as a nation will have to be resigned to our fate!

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