Turb-UL-ence?

The Government yesterday set in motion a scenario where the CEO of the budget airline will take over the leadership role of full service and fast expanding national carrier.

Ending weeks of speculation SriLankan Airlines in a brief statement yesterday announced Kapila Chandrasena, current CEO Mihin Lanka has been appointed as Chief Executive Officer Designate of SriLankan Airlines with immediate effect.

Kapila Chandrasena	Manoj Gunawardena

Chandrasena will assume the role of CEO from 1 August 2011 from the current CEO Manoj Gunawardena whose term in office comes to an end on 31 July 2011.

The announcement follows SriLankan Board on Wednesday night making a final decision on the future CEO of the national carrier.

Yesterday morning Chairman Nishantha Wickramasinghe and the Board issued a communiqué to all staff of its decision and requested for extension of their fullest co-operation to Chandrasena who as CEO-designate will ensure a smooth transition. Chandrasena has been a member of SriLankan Airlines Board since 2009/10 financial year. Though CEO of Mihin, Chandrasena hails from a telecom industry background locally and internationally with his last stint as Chief Marketing Officer of SLT.

Since assuming office as CEO the budget carrier was reported to have made considerable progress though the travel industry doesn’t fully agree.

Nevertheless the change comes a day after the fully Government owned SriLankan Airlines announced that its fleet has grown to biggest ever in national carrier’s history with the receipt of the 17th aircraft whilst addition of five more Airbus aircraft is on the cards.

In that statement Gunwardena was quoted as saying “This is definitely a major landmark in history of aviation of Sri Lanka” and by end 2011 the national carrier will possess a fleet of modern aircraft that would position SriLankan Airlines to fulfill its role as a catalyst for the country’s economic growth.

HoweverGunewardena wont be steering that catalyst role.

Even before yesterday’s announcement on the change of leadership, rumour mills were abuzz.

 Some analysts claimed relationship between Gunwardena and the Board had strained in recent months with a few describing it was over small issues.

An industry professional Gunawardena was promoted to CEO in May 2008 midst of his long career with the national airline. Prior to CEO he was Head of Worldwide Sales responsible for the Airline’s global sales activities. He was Regional Manager UK, Europe and Americas, a position that he held from 2005. His original contract as CEO was for two years and was extended by another year thereafter.

Apart from strained relationship some also claimed the airline was having issues with optimum performance despite boom in inbound tourist and outbound local travel since the end of the war. However oil prices constrained all airlines globally but some viewed profitability was intact for most.

Preliminary financial performance figures released by the Association of Asia Pacific Airlines (AAPA) show that Asia Pacific-based carriers in aggregate reported a record US$ 9.5 billion in net profits in 2010, a major turnaround from US$ 1.7 billion in net losses suffered in the previous year. See Page  for more details on that story.

Whether the assessment of some analysts is right or wrong would only be known when SriLankan releases its 2010/11 annual accounts in a few months time those loyal to Gunewardena claimed the airline’s performance has considerably improved over an year ago.

They also said that Gunwardena opted out from seeking an extension second time around on “matters of principle.”

Rumours also included that Gunawardena who remains an employee of SriLankan as his contract was only with regard to the CEO role, was keen to reposition himself as national carrier’s Head of UK operations. However inside sources denied rumours saying the Board nor Gunwardena had yet reached a stage to discuss next steps. Some said negotiations are likely next week.

The same scenario applies to what new steps the Board will take in terms of the structure and composition of the management team under Chandrasena’s leadership.  In a welcome move recently SriLankan Board appointed career airline industry professional G. Jayaseelan as Head of Service Delivery bringing him back from several stints overseas. Industry talk was that with non-career Chandrasena as CEO, Jayaseelan could be made Chief Operating Officer.

Aviation industry circles were mixed about the selection of Chandrasena as a full time CEO of SriLankan a stance they took when he took over the cockpit of Mihin as well. “The best course for the Board should have been to upgrade a senior person within the national carrier,” they argued. However others said if Chandrasena manages the team of career staff of SriLankan there will be no issue. They cited that for a good part of the national career’s history the post of Chairman and Managing Director has been held by those from outside the industry relying on the professionals to run the airline.

The Board of Directors of SriLankan Airlines comprises Nishantha Wickramasinghe – Chairman, Nihal Jayamanne PC, Kapila Chandrasena, Shameendra Rajapaksa, Manilal Fernando and Dr Chris Nonis.