In 2007 former Mihin Lanka CEO Sajin Vass Gunawardena had informed the then Commercial Division's head Sugathadasa Rajapakse that he, the CEO, would decide on the prices of air tickets and this had led to his resignation from Mihin Lanka, it was revealed at the Presidential Commission of Inquiry (PCoI) on SriLankan, SriLankan Catering and Mihin Lanka today.
“We had prepared several airfare price buckets to cater to the time when lots of people were travelling to and from Dubai. Things went relatively well till the CEO asked me not to do such things in the future. He said that there should be only one price and that he will decide what they should be,” he told the PCoI.
Mr. Rajapakse had worked at SriLankan from 1980 to 2003 and that he was approached by Mr. Gunawardena in October 2006 to prepare a business plan for a new budget airline.
He said he told the former CEO that SriLankan's former Chief Financial Officer S.A. Chandrasekara was the ideal person to prepare a business plan and both of them had met Mr. Gunawadena at the Finance Ministry on the following day.
Mr. Rajapaksa said Mr. Gunawadena had tasked both of them to prepare the business plan and the commercial plan.
“Mr. Chandrasekera had asked the then CEO the reason for a second airline given the existence of UL and because 2006 and 2007 were bad years for tourism. The CEO had informed Mr. Chandrasekera that it was a government decision,” he told the PCoI. “It was also obvious that SriLankan under Emirates management led by Peter Hill was also unhappy about the government starting a budget airline. It would have been easier if we had their help."
However, the two of them, with more than 40 years of combined experience prepared a business plan, which was presented to the Mihin Lanka Board of Directors on January 2007. The business plan included the number of aircraft needed (one in the first six months) and destinations.
However, there were changes to the business plan from the beginning. “A second aircraft arrived soon after without us knowing and there were suggestions to fly to Rome as well, which was not in the original plan,” Mr. Rajapaksa said.