According to SriLankan Airlines Chief Executive, Kapila Chandrasena, one of the key issues impeding the airline coming out of the red and making a profit is the national interest. He told a recent media conference that as the national carrier, their decisions are not purely commercial.
"SriLankan has reported a loss of about Rs.25 billion in 2012 and since 2008, the accumulated loss accounts for over Rs.55 billion"
However, he also said making SriLankan a profitable venture was not that difficult. As he pointed out if the airline could discontinue the loss making destinations—mainly to Europe—SriLankan can be viable as a business venture. But he pointed out since 55 per cent of the tourists to the country come from these European destinations and therefore the airline cannot scale down operations—though this fact is disputable in the current context.
The situation with the SriLankan is quite similar to those of a number of loss making state-owned ventures, where the national interest comes before than the financial viability of the entity. But the million dollar question one should ask is, ‘Can these entities go on like this?’
On the other hand the term ‘national interest’ appears to be abused in Sri Lanka. The term often referred to by the French expression raison d’État means a country’s goals and ambitions in economic, social, cultural and military spheres. But in Sri Lanka the meaning of the term appears to have been given a twist as it reflects the whims and fancies of a handful of people. Their vanity and ego have unfortunately become Sri Lanka’s national interest.
They envisaged an airport in the Southern most tip of Sri Lanka, in the middle of a jungle, and decided to build a US $ 210 airport where only the national carrier SriLankan is now making ‘obligatory touch downs’, to heed to so-called national interest.
A survey should be carried out to discover how many people in this country think that some of the loss-making state-owned entities should be continued for the sake of national interest and national pride.
Pathfinder Foundation, a Colombo-based think tank a few months ago questioned the point of having a national carrier, which is incurring huge losses and has become more of a national burden to the people than a pride. The think tank recommended three plausible remedies for SriLankan to come out from the financial tight spot it is currently in.
They asked the government to find a strategic investor, who could infuse capital and improve the balance sheet of the airline. The second remedy suggested was to scale down the airline’s operations to profitable routes. The third was to sell the airline and its assets. Pathfinder pointed out that though many countries would consider a national airline a case for pride, such views are now becoming less important, specially if the airline is incurring a huge loss.
SriLankan has reported a loss of about Rs.25 billion in 2012 and since 2008, the accumulated loss accounts for more than Rs.55 billion.
Therefore it is high time that the country chooses between the so-called national interest or the pride and the ground realities.