SriLankan Airlines Romeo's days of wine and roses

COLOMBO (EconomyNext) - Sri Lankan airline chairman Nishantha Wickramasinghe's penchant for young stewardesses is well documented, but his tastes in wine and anything duty free has left a legacy of losses and reputational damage for the national carrier.

The latest investigation into the conduct of Sri Lankan airlines during the former regime of Mahinda Rajapaksa, the brother-in-law of Chairman Wickramasinghe, has exposed personal corruption that warrants criminal charges.

Wickramasinghe arbitrarily kicked aside an international tender for the supply of wine, including champagne, served aboard aircraft and awarded the contract to a company known as Phoenix Rising Ventures Limited.

"Sri Lankan Airlines has made a conscious decision to overlook the other bidders and award the contract (for wine and champagne) to M/S Phoenix, a supplier who did not even bid for the tender.

"This is clearly evident with the board papers submitted and the fact that Sri Lankan Airlines only arranged for tasting of M/S Phoenix's wines and champagne." said the Weliamuna report.

Seventeen suppliers short listed for the contract and who held a wine-tasting function had been abruptly told that the tender was cancelled long after the contract had been awarded to Phoenix.

This means international suppliers were made to believe that the tender process was still underway, but in fact it had long been decided to award the contract to Canada-registered Phoenix headed by Raju Chandiram, the ex-husband of Otara Chandiram, formerly of Odel.

Some of those who tendered, were clearly unhappy that they were kept hanging for a long period while Sri Lankan had other intentions of giving the contract to Phoenix.

"So that I stop wasting, first my time and then yours, just let me know if ONE day I will be receiving updates from your side or if this is just a big joke," a company which made a bid wrote after failing to find out what was happening with the wine tender.

"Please make sure that I will post on every website I can, not to tender for your airline company and to never trust any of you. All this will get back to you one day, make sure of that."

Indeed it has. Some of the top executive could be arrested no sooner a police investigation is started.

What was more shocking was that the wine tasting to pick wines was carried out by Chandiram himself and cronies chosen by him.

The Weliamuna report concluded that former chairman Wickramasinghe, Chief Executive Officer Kapila Chandrasena, Head of Finance Yasantha Dissanayake and former chief commercial officer Jaya Seelan caused massive losses to the airline in awarding the wine and duty free contracts.

The BoI observes that Sri Lankan Airlines overlooking 46 bidders and selecting M/S Phoenix has made a mockery of the Tender/Procurement Procures laid down by SLA.

"Furthermore, such blatant disregard exemplifies the management attitude and trend that existed at Sri Lankan airlines under the control of former chairman Wickramasinghe and former CEO Chandrasena."

Phoenix had also been awarded the exclusive rights to carry out duty free sales aboard Sri Lankan flights causing huge losses to Sri Lankan airlines. A sum of $865,398 due to Sri Lankan airlines from Chandiram's Phoenix for the financial year 2012/2013 had been written off by Chandrasena, Dissanayake and JayaSeelan.

The investigation concluded that SriLankan's generosity, despite accumulated losses of over 110 billion rupees, could be the result of corruption that should lead to criminal prosecution of all those involved.

The report did not blame Phoenix, but said the manner in which it had been awarded two contracts, one for duty free sales and the other for wine and champagne -- smacked of corruption.

It is interesting to note that former Chairman Wickramasinghe was known to possess at least one Rolex wristwatch which was valued at four million rupees according to a statement he himself gave police when his house was burgled a few years ago.

SriLankan sources said Wickramasinghe had been generous gifting valuable ornaments and perfumes to stewardesses.

Press Statement - From Board of Inquiry on Srilankan Airlines

Image from Infolanka

A  Board of Inquiry has found shocking details of corruption running into billions of dollars, manipulations of service contracting, recruitment of unqualified staff and major security breaches at Sri Lankan airlines under the former government.

The panel headed by anti-corruption advocate and senior lawyer J. C. Weliamuna found instances of gross abuse of power by former chairman NishanthaWickramasinghe whose penchant for young air hostesses cost the debt-ridden airline even more problems.

The former government of President Mahinda Rajapakse made management changes to carry out a re-fleeting of the airline with brand-new aircraft costing $2.3 billion despite the availability of more cost effective alternatives.

The Weliamuna report recommends criminal investigations into the entire re-fleeting process and have noted instances where former chairmen Wickramasinghe, a brother-in-law of Mahinda Rajapakse, should be prosecuted.

The Board of Inquiry (BOI) found evidence of Wickramasinghe and Sri Lankan CEO, Kapila Chandrasena falsifying documents to lease a luxury sports utility vehicle for the use  of Wickramasinghe. This was in addition to a luxury Mercedes Benz vehicle and a Prado super luxury vehicle.

The purchase of vehicles pales into insignificance when compared to irregularities in the re-fleeting exercise and a fiasco involving the launch of an air taxi service which was eventually abandoned causing millions of dollars in losses to Sri Lankan airlines.     

The management of Sri Lankan staff knowingly ignored conflict of interest in companies and individuals hired to advise the national carrier on procurements leading to a reasonable assumption that they were all corrupt deals.  

A Cabin crew member had been released from the airline to work at the Presidential Secretariat following a request from the then Presidential Secretary Lalith Weeratunga, but she was actually released for Namal Rajapaksa’s political work.

She had been paid by the airline, including allowances for cabin work although there is no explanation of what services she provided except that she had been over paid more than 4.2 million rupees.

The BOI recommends that the Sri Lankan airlines take action to recover the overpaid amounts from the staff member who has been identified in the report and direct prosecutions of those who authorized misappropriation of public finance.

The BOI also found that several applicants who repeatedly failed entrance tests were eventually recruited on verbal requests from the management.

The former chairman had also created a post of “SLA Brand Ambassador” and appointed his known companion, an airhostess even though no such designation was known to the national carrier. The couple had travelled abroad on tickets bought by Sri Lankan from other airlines too.

“In our investigation, we can conclusively hold that former Chairman’s association with cabin crew members exposed Sri Lankan Airlines to abuse of power, causing reputational risks as well as financial losses.

“BOI can also hold that there was no corporate culture in the board or the top management to raise such issues when a senior officer or the chairman was involved in such behavioral issues adversely affecting the company”

The BOI has found CEO Chandrasena unsuitable for the job and was surprised to discover that he was paid a minimum monthly salary of 1.5 million rupees on top of other perks and he had also enjoyed salaries simultaneously from his other appointments.

There had been a time when he drew a salary as Mobitel CEO as well as Mihin Lanka CEO. The BOI recommends criminal prosecutions of Chandrasena as well as Wickramasinghe, among other senior management staff.

The BOI also found that a London station manager who tried to stop the illegal practice of sending motor spare parts for the use of former president’s son Yoshitha had been suddenly transferred out on the direction of the former President Rajapaske. 

The airline had also tried to hush up two serious flying mishaps involving the chief pilot DruviPerera and Captain U. A. V. Pathirana.

Two staff members involved in alleged human smuggling had got off lightly raising serious concerns whether few employees continue to support a criminal human smuggling ring.

The BOI also raised questions about the suitability of appointing a retired army major general,      P. Chandrawansa, who did not have aviation security experience on a salary of 450,000 rupees, without following recruitment procedure and accused him of engaging in political activities while in the employment of Sri Lankan airlines.

The BOI recommends the termination of services, or immediate disciplinary action for breaching company rules. Security Department was among the most politicized.     

The BOI praised two senior pilots -- Patrick Fernando and RangaAmadoru -- who had resigned in protest against attempts to lower pass marks of recruit pilots.

“Their resignation effectively prevented the selection of unsuitable candidates in the 2013 Cadet Pilot intake. In view of their bold stand taken to protect professional standards, BOI recommends that they be commended.”

The report also lists major fraud in the award of tenders and singles out a duty free deal and the sale of wine as one of the blatantly corrupt deals of Sri Lankan requiring a criminal investigation. BOI points out the corrupt manner in which General Sales Agents were appointed in many countries on behalf of the airlines and manipulations made. BOI also recommends criminal investigations on the involvement of UdayangaWeeratunga former Ambassador to Russia and DilanAriyawansa in several GSA appointments.

Finally the BOI has concluded that the management culture was a major contributory factor for abuseof power and external interference into the business of Sri Lankan airlines.

SriLankan Airlines needs US$125mn before end March: PM

COLOMBO (EconomyNext) - State-run SriLankan Airlines, which ran into heavy sustained losses after its managing partner Emirates was removed by the Rajapaksa regime, needs 125 million US dollars by end March to settle fuel bills and loans, Prime Minister Ranil Wickramasinghe said.

Wickramasinghe told parliament since 2011 August, the airline had received 375 million US dollars on top of a 520 million US dollar equity injection over 5 years. 

The airline now needed another 125 million US dollars (16.6 billion rupees) by March 31 to pay Ceylon Petroleum Corporation and repay loans to the Bank of Ceylon.

Wickramasinghe said he was to meet Finance Minister Ravi Karunanayake on the matter Tuesday.

In addition to capital injection made through injections of Treasury bonds, SriLankan had floated syndicated loans and bonds abroad with Treasury guarantees.

SriLankan Airlines has suffered 110 billion rupees of losses since Emirates was ousted by the Rajapaksa regime as its managing equity partner. 
According to reports former minister Sajin Vass Gunewardene played a role in the ouster. Vass Gunewardene then set up Mihin Air with people's money, which also started to make losses.

Sri Lankan Airlines: Weliamuna’s Investigation Hits ‘Turbulence’- Airline’s IT Dept Suspected Of Foul Play

From Colombo Telegraph

The Aviation Minister’s ordered probe into the airline appears to have hit turbulence as the “Urgent Notice” requested to be sent to all staff by the airline almost a week ago seeking credible information from staff is yet to be received by employees of the airline.

Disrupting this probe on all possible counts was expected from the onset as many employees were waiting to spill beans.

Employees of the airline passing on credible information to support this investigation were anticipated by airline’s Senior Management Team especially the current CEO Kapila Chandrasena the political appointee of the former regime who mysteriously still remains in control.

Many of the airline’s employees have now raised concerns in disgust as to why only some have received the ‘Urgent Notice’ and not all and have now started pointing fingers at their very own Information Technology (I.T) Department for not dispatching this all important email.

“This appears to be another tactical move by our CEO Kapila Chandrasena as he will attempt to hinder the ordered probe and attempt to disrupt any flow of information from his staff which would expose him and his former Senior Management Team. Some of the former Senior Management Team members incidentally are still in employment with the airline and still attempt to wield their powers quite blatantly.

“Those in charge of the I.T Department should be held accountable if proved that they have willfully sabotaged this ordered governmental probe on the airline” complained a very senior employee of the airline.

Other staff members of the airline feel that due to the severity of the probe the existing CEO of the airline Kapila Chandrasena, should step aside until the Aviation Minister’s ordered probe is complete.

The former Chairman and brother in law of the former President Nishantha Wickremasinghe the so called former ‘Ace of Spades’ of the national carrier has already departed and now only the ‘king of Spades’ and number two in the airline CEO Chandrasena still remains.

There is no doubt the new Chairman of the national carrier Ajit Dias will end up becoming the ‘joker’ of the deck of cards if he does not fully support the Aviation Ministry during this probe.

It is now approximately one week since the email to all staff was ordered to be dispatched and many as of today are still to receive it.

Transporting of the famous Lamborghini cars for the former first Sons of the country, to Gotabaya Rajapaksa’s VVIP travel of his puppy dog from Zurich to Colombo, to the former Chairman and Brother In Law Nishantha Wickremasinghe’s blatant and costly love affair with his Flight Stewardess paramour and his diversion of a commercial flight to Singapore for personal gain are all been investigated besides many other reasons as to why the airline had to undergo a serious operational loss of approximately Rs 120 Billion.

The aviation sector in Sri Lanka got a rude awakening early last week when probably for the first time in the country’s history a full probe into the ‘Abuse of Power’ by its Board of Directors and Senior Management, “Leasing and Purchasing of Aircraft”, “Major Contracts” and all “External Interference” of Sri Lankan Airlines was ordered by Arjuna Ranatunga the Ports, Shipping and Aviation Minister earlier in the week.

The task of probing this national carrier has been entrusted to Lawyer J.C. Weliamuna and his team.

In has been reported that the response in the first week of the current probe has been promising with many employees beating a path to Mr.Weliamuna’s door and fearlessly coming forward to provide critical information.

Perhaps this is the golden opportunity that the Aviation Minister Arjuna Rantunga has been waiting for to prove that he can clean up this right royal mess that this once trend setting and award winning airline has found itself at present.

Minister Ranatunga won the country great accolades by leading his national team of cricketers to win the world cup in 1996. Now nineteen years later he finds himself leading his aviation team to a different playground, a playing field with much bigger boundaries and in a world where the aviation sector presents a completely different set of challenges.

The entire nation and the aviation world for that matter watches in hope as ‘Captain Cool’ attempts to trap those perpetrators ‘Leg Before Wicket’ (LBW) or bowl the them ‘through the gate’. He no doubt will begin this innings from scratch and make every endeavor to nudge the airline to prosperity with his trade mark flicks all around the park.

But the all-important question that lies on the lips of the each and every tax payer in this county is this.

Will this probe help clean up this mess and move the airline towards greater success or will this probe require the intervention of third umpire?

The ‘Urgent Notice’ sent out to all employees of Sri Lankan Airlines is as follows:

URGENT NOTICE

TO: ALL MEMBERS OF THE STAFF OF SRI LANKAN AIRLINES

BOARD OF INQUIRY TO INVESTIGATE INTO MATTERS RELATING TO SRI LANKAN AIRLINES

Hon. Minister of Airport and Aviation has appointed a Board of Inquiry to inquire into certain critical aspects relating to Sri Lankan Airlines, and in particular, irregularities and abuse of power by the Management of Sri Lankan Airlines, prior to the appointment of the new Board of Directors in February 2015.

If any member of the Staff is aware of any instances of abuse of power and/or irregularities committed during the abovementioned period, such information is of vital importance in achieving the objectives of the Board of Inquiry. Therefore, all members of the Staff are requested to submit such vital information directly to the Board of Inquiry. Any person interfering with the transmission of such information through intimidation of whatever nature shall be severely dealt with.

Please note that, the identity of the members of the Staff who assist the Board of Inquiry will be kept strictly confidential. No staff member will be subjected to any form of victimization by disclosing such information to the Board of Inquiry

All information may be provided by email, by post or in person:

Address:

Board of Inquiry,

c/o Chairman

No. 147/5, Dutugamunu Street,

Kohuwela.

Email: srilankan.investigation@gmail.com

Phone: Mobile 0710211212 or Ext 1212

Any staff member who wishes to meet the Board of Inquiry may seek a personal appointment by phone or by a request made to the above email address.

© CT filed By Marlon Dale Ferreira

Sri Lankan Airlines – How Safe Are You To Fly?

By Marlon Dale Ferreira - Colombo Telegraph

The Deputy General and Chief Executive Officer of the Civil Aviation Authority of Sri Lanka H.M.C Nimalsiri in a stern email addressed to the Sri Lankan Airlines Chief Executive Officer Kapila Chandrasena earlier, had intimated his displeasure regarding the supposedly committed gross violation of the Air Navigation Regulations and the associated violations of International Civil Aviation Organization (ICAO) standards by certain pilots of the airline, thereby threatening the safety of the airline’s operating of commercial flights that carry passengers on board.

Nimalsiri’s email refers to Pilots practicing abnormal and emergency situations on commercial flights when these procedures should never be done with lives at stake.

These maneuvers must only be practiced under the watchful eyes of an Instructor and only in a Flight Simulator, he reiterated.

New Srilankan Airlines Chairman - Hemaka de Alwis?

Hemaka de Alwis with Faizer Mustapha

Hemaka de Alwis of Fairway Holdings is tipped to be the new Srilankan Airlines Chairman. 

What will be the future of Sri Lankan Airlines?

(Lanka-e-News- 12.Jan.2015, 11.30PM) The national airline beefed up with political and “Nil Balakaya” friends during the past ten years will now face a very decisive juncture, if the airline is to push forward with its planned Best Airline in South Asia dream a reality or even merely to survive.

With the current political change, taking place the airline will have an opportunity to run as a proper business establishment, if it is allowed to function away from political interference, using the professional, capable senior managers kept away during these recent years. The airline was run by people close to Family and their interested friends, cherry picking the “yes men” to run the critical areas of the airline. From Marketing, advertising Commercial and Revenue Management inexperience people were put in to test run and only to agree to the demands of people appointed by the family.

All these managers happily bowed and agree whenever Mahinda wanted an aircraft with 300 plus seats, for his many trips. They did not consider nor had the courage to discuss, challenge the loss of face and revenue losses to the company by displacing thousands of paying passengers, from many countries and the cost of providing them hotels, transfers and other facilities.

The Katunayake insiders say that a security firm owned and run by a family member was deployed in all areas in addition to Sri Lankan security staff including a retired Maj Gen. to head the division overall.

Promotions, especially Grade 9/10, those were strictly adhered and controlled by high standards even prior to Emirates involvement, were violated when the management started just distributing promotions G10 and G11 to people with no experience but to whom they knew.

If a team of professional consultants have a one on one with these managers the glaring truth will be exposed. The HR division also is run by politically appointed lot with new faces with fast promotions, only follow orders and nothing done with their own accord. Large numbers of persons were newly recruited during these few years, in every division, adding to the colossal cost. People ask why the airline is making losses when most of the routes/flights are operated with very high passenger numbers.

A Gen. Manager was appointed for Training, who worked directly for “Nil Balakaya” promoting charity with company money. This is the same Primal De Silva (cabin crew union leader) who walked away with his cabin crew calling for an industrial dispute leaving the aircraft in Zurich airport, during the Emirates time.

In Commercial division too a string of Gen. Managers were appointed, just before the election, with the intention of taking the complete control of the revenues and processes under the CEO. Most of these General Managers were the same lot who left Sri Lankan and followed then CEO, Peter Hill to Oman Air when the Rajapakse regime took over Sri Lankan, and left Oman Air too when Peter Hill was asked to leave that airline.

Also a woman, who was asked to leave the company due to an illicit relationship, in the past and a close relation of the Chairman Nishantha Wickremasinge, was called in as a senior consultant. The same Ms. Gunesekera is now influencing the senior management to promote and protect, only her close friends and her boys.

With an excellent IT team in house, the CEO decided to hand over the credit card sales division (internet bookings) to an outside party, on commission basis to share a fat Rs.6-8 million a month. No one was allowed to differ or question this decision. In a similar deal, all cargo space in Mihin Air was given to one freight agent on a profit share basis by this CEO. These are just a few things that need to be seriously looked at and investigated.

The Company’s Head of World Sales is the same person who headed the election campaign on paid leave for Mr. Sajin Vass Gunawarden in Ambalangoda.

According to the cargo trade information the cargo division is in total disarray, unable to distribute the transit cargo loads brought in from rest of the countries. The Head of cargo is recruited secretly and politically from a Sales Agent, with no real airline operation experience. Along with the old run-down cargo aero-plane registered in Colombo also with a profit share of the family and senior management.

The on board duty free with a USD 70 million turn over annually, was given out to a Canadian party by the Chairman, on a profit share basis. It is also known the Chairman is paid a huge house rental by the company, and recently bought himself the second official vehicle at the cost of the company.

A large number of new recruits in all departments for non-essential areas in the company has a staggering cost attached. These are some of the reasons why the National carrier is making such a huge loss and with unprofessional approach at the top in dealing on day to day matters, the airline is not only losing revenue but the esteem and the respect had since Air Lanka days. This down fall is only due to the mismanagement of the ruling family, their friends, their appointees and not the fault of the airline or its hard working dedicated people.

Rajapaksa’s Millions of Dollars worth US Air Force One type A - 330 - 300 Yet To Be Delivered: What Next?

From Colombo Telegraph

Sri Lankan Airlines, the National Carrier placed orders for twelve aircraft with Airbus Industrie of which two A 330 planes have been delivered. Colombo Telegraph can reveal that one A 330 yet to be delivered from Toulouse, France is to be fitted in the fashion of USA’s Air Force 1 made to measure for the use of former President Mahinda Rajapaksa.

Sri Lankan Airlines placed orders for 12 air craft with Airbus Industrie consisting of six A 330 and six A 350 in a major re fleeting exercise, one of which was to be fitted in a tailor made fashion for former President Mahinda Rajapaksa’s use. The A330 was to be fitted like the Air Force 1 used by the President of USA costing millions of dollars. The fitting necessitates gear to be fitted permanently to the front end of the aircraft which would add at least one tonne in weight even when other interior fittings are taken off when in use for commercial transport. The added weight would inflate the cost per flown mile in addition to lesser yields for the troubled airline.

Colombo Telegraph understands that once delivered for use the down time for fitting is three working days and another three days for dismantling after each journey which would render the aircraft to be grounded for six days. The cost of fitting this aircraft in this fashion has been spread over the purchase price of all twelve airbus craft to avoid scrutiny.

The Chairman of Sri Lankan Airlines during the tenure of President Mahinda Rajapaksa was his brother in law Nishantha Wickremasinghe, who has since resigned from this post. The CEO of the troubled airline too resigned after President Mahinda Rajapaksa lost in a bid to seek re election for an unprecedented third term. To the surprise of many the Chief Operating Officer of Sri Lankan Airlines has remained in his position to date.

Colombo Telegraph reliably understands that a new Board of Directors, yet to be named would be going into the balance purchases of these aircraft in the coming week.