SriLankan Airlines chief accuses unions of taking U-turn

• Says recent statements contradictory and not at all consistent with the assurances or spirit of co-operation previously expressed 

SriLankan Airlines Chairman Ajith Dias has said that employee unions, through recent statements, had taken a U-turn on the assurances they had provided at a previous meeting.

This observation was conveyed in a letter by the Chairman to the President of the Airline Pilots Guild of Sri Lanka; the President of the Association of SriLankan Airlines Licensed Aircraft Engineers; the President, of the Executive Association of SriLankan Airlines BIA; the President of the Flight Attendants Union and the President of SriLankan Airlines Aircraft Technicians Association.

The following is the full text of the SriLankan Airlines Chairman’s letter, which has been copied to President Maithripala Sirisena, Prime Minister Ranil Wickremesinghe, Finance Minister Mangala Samaraweera, Public Enterprise Development Minister Kabir Hashim, Special Assignments Minister Dr. Sarath Amunugama, Transport and Civil Aviation Minister Nimal Siripala de Silva, Development Strategies and International Trade Minister Malik Samarawickrama, Treasury Secretary Dr. R.H.S. Samaratunga, Public Enterprise Development Secretary Ravindra Hewavitharana, Public Private Partner Agency Chairman and CEO Thilan Wijesinghe and Senior Advisor to the Finance Ministry Mano Tittawela.

We refer to the recent press and social media reports in respect of a communiqué forwarded by the Alliance of Unions – SriLankan Airlines.

As most of you would know, representatives of the unions were invited to an awareness meeting on the ‘Way forward for the airline’ on 6 December 2017 where it was explained in detail the position in respect of the proposed restructuring program for SriLankan Airlines. At the meeting your confirmation and assurance to make it a success was very encouraging and we kept all staff informed in this respect. However your subsequent letter to us and copied to the press is contradictory and not at all consistent with the assurances or the spirit of co-operation given at the meeting.

The current Board of Directors took office in 2015 of a company with considerable losses, aircraft leases at unworkable rates and unjustifiable and unproductive Collective Bargaining Agreements (CBAs). In the last financial year, the SriLankan Airlines Group recorded a healthy operating profit and it is due to the provision of finance charges on the previous debts brought forward and the one-off costs paid for the cancellation of unnecessary A350 aircraft ordered by the previous Government and the cancellation of 600 flights due to the closure of the runway at BIA, that caused the final loss to the Group.

SriLankan Airlines Airbus A340 aircraft

Owing to the Government of Sri Lanka’s financial and other constraints, the Board did not receive approval for the implementation of several restructuring plans put forward with advice sought from the three foreign consultancy firms, which worked with the management and the Board on these initiatives.

With the pressures of international lending agencies towards reorganising and restructuring several State Owned Enterprises, the Government of Sri Lanka has appointed an Officials Committee reporting to the Ministerial Committee under the leadership of the Hon. Prime Minister, to come up with the necessary plans to make the company a viable entity and thereafter, to find a suitable partner to drive the airline to the next level.

We are working closely with the Officials Committee to see how best the debt could be taken off from the Balance Sheet, receive jet fuel at international market prices and right-sizing the company. Success in these areas will ensure a viable airline.

We have also clearly indicated that the consultants and the management will engage with the unions in the implementation of the Plan on the Restructure of the Company.  

 We are very mindful of the fact that due to the downturn of the global airline industry, there is little demand now especially in the Middle East for our trained and competent staff and as such the closure of the airline is a concern to all and not in anybody’s interest.

 Information requested by one of the unions under the RIT Act cannot be disclosed due to its personal nature and as stipulated so in the Right to Information Act.  It is to be noted that the total remuneration of the senior management team of SriLankan Airlines amounts to less than 1% of the total wage cost of the company. SriLankan Airlines is a $ 950 million (Rs. 140 billion) company in terms of revenue and needs highly skilled and experienced management, employed at market rates in keeping with specialised companies both here and abroad. The Chairman and the Directors are not paid a salary or any allowances.

A corporate restructure presents the company and employees with formidable challenges. It will be a difficult period but has to be done in the interest of the airline and its employees. Irrespective of what is reported in the press and on social media, we are confident that with the buy-in of a majority of our associates we can turn this company around to a positive situation.