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Unions told closing SriLankan Airlines not in the best interest

Dec 16, 2017 12:16:27 AM - thesundayleader.lk

SriLankan Airlines has rejected allegations raised by some trade unions and noted that closing the company will not be in the best interest of anyone.

In a letter to the the President of the Airline Pilots Guild of Sri Lanka, President of the Association of SriLankan Airlines Licensed Aircraft Engineers, President of the Executive Association of SriLankan Airlines BIA, President of the Flight Attendants Union and President of the SriLankan Airlines Aircraft Technicians Association, the Chairman of SriLankan Airlines Ajith Dias notes that representatives of the Unions were invited to an awareness meeting on the ‘way forward for the airline’ on 6th 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,” Ajith Dias said.

He said that 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).

Dias said that 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.

“Owing to the Government of Sri Lanka’s financial and other constrains; the Board did not receive approval for implementation of the several restructuring plans put forward with the advice sought from the three foreign consultancy firms, who worked with the management and the Board on these initiatives. With the pressures of international lending agencies towards re-organizing 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,” he said.

Ajith Dias said that the management of the Airline is 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.

“The success in these areas will ensure a viable airline. We have also clearly indicated, the Consultants and the Management will engage with the Unions in the implementation of the Plan on the Restructure of the Company,” he added.

Ajith Dias told the unions in the letter that the management is 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 trained and competent Sri Lankan staff and as such the closure of the Airline is a concern to all and not in anybody’s interest.

He also says 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 USD 950 MN (LKR 140 BN) Company in terms of revenue and needs highly skilled and experienced management, employed at market rates in keeping with specialized companies both here and abroad. The Chairman and the Directors are not paid a salary nor 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 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,” he concluded. (Colombo Gazette)