“Fly me to the Moon”: Sri Lankas Aviation Fiasco and how Singapore Airlines Soared Under JYM Pillai of Jaffna

Ajit Kanagasundram

Our foray into aviation has been nothing short of disastrous except in the early years and getting worse with almost daily revelations of corruption and ineptitude. I have chosen the title “Fly me to the Moon” as a parody of Mrs Bandaranayake’s promise to bring rice from the moon and provide it free to the masses, and which promise and Sinhala chauvinism won he a landslide majority in the 1970 election.


The early years were uneventful – Ceylon was one of the first developing nations to have an airline and it was run by a distinguished Civil Servant called MFDS Jayaratne. Small, profitable and serving a few regional routes and London. We were the first in Asia to fly Lockheed Super Constellations and I vividly remember my first flight in 1958, when my father took up the post of High Commissioner in London, after he was removed from his job as the Chairman of the Gal Oya Board, despite having done an excellent job by all accounts, purely on Philip Gunawardane influencing SWRD Bandarayake to remove him because he was a Tamil. We made stops along the way at Karachi, Bahrain, Cairo and Rome – the flight took from Ratmalana two days and was super comfortable. Other airlines, Like Singapore Airlines were the flying World War II Dakotas. Anyone would have picked Air Ceylon to be the first successful Asia airline, especially as we had an agreement with KLM, the best airline in the world at that time, to provide engineering and logistical support. We have had subsequent partnership witha French airline UTA, SIA ,and Emirates all of which ended in tears over aircraft procurement. Today despite repeated calls partners there are no takers as our reputation is well known in the airline industry. The only offer was from a shadowy Texas investment outfit, with no known airline experience but with connections to our politicians through an equally shadowy “middle man”. Instead the credit for the first successful Asia airline was taken by Singapore International Airline – SIA- and I will its story first as it is a textbook case of how to do it right

In order to set up a fledgling airline In 1965, Lee Kuan Yew chose J Y M Pillay ( a Jaffna Tamil) , who had no background in aviation but was known to be an intelligent hardworking Civil Servant in his mid 30s. He was mandated to start SIA with the two Dakota aircraft that Singapore received when it broke up with Malaysia – the only scheduled flights were to KL and Penang…….

Pillay first developed regional routes and then moved international. He hired an Australian advertising firm – Bateys – to provide branding for the Singapore Girl concept. Customer service was stressed as a differentiating factor. The international routes grew with the growing realization among international air travelers – especially business travelers who valued good service, punctuality and reliability – that SIA provided all their needs even if at a premium price. SIA, conscious of its brand, never undercut it by offering discounts or cheap fares. The procurement plans for aircraft was simple – buy the latest planes, if possible as the first customer, thus obtaining substantial discounts from the manufacturers. The planes come with 3 years of free maintenance and are more fuel efficient so the cost per seat/mile goes down and profits go up. Then depreciate the planes on your books in 5 years, and when they reach zero book value sell them at a profit to 3rd world airlines and repeat the cycle. SIA was also among the launch customers for the Airbus 380, Boeing 787 Dreamliner and the new long range Airbus 350 – manufacturers fight for the cachet of having SIA as an initial launch customer and are willing to buy the business by offering huge discounts.

Following these basic principles SIA grew exponentially and in 1986 Pillay signed the largest aviation order ever for 60 Boeing 747s for US$ 5 billion. The contract did not go up to the cabinet or even the Ministry. It was handled internally by the SIA procurement Board consisting of its own engineers, pilots and management staff and Pillay took the final decision. The funding was SIA internal resources and bank borrowings. Needless to say there was never any hint of scandal.

Consider our case whether it was Air Lanka or Sri Lankan Airways. They have good pilots and operating staff and the in-flight service has always been excellent (in my opinion better than SIA because the smiles of the air hostesses are warmer and more genuine). They failed for one reason only – aircraft procurement because money was to be made.

Rakitha Wicremenayake, a crony of President JR”s son, was appointed as the Chairman on the newly created Air Lanka in 1977. This same gentleman had a few years earlier abandoned the passengers on an Air Ceylon Trident flight on the tarmac at Bangkok airport , when he defected for a better paying job in Thailand . He ignored SIA advice to buy Boeing and leased two Lockheed TriStar L1011 aircraft ( SIA were then advising Air Lanka after a special request by JR to Lee Kuan Yew). The only other customer in Asia for this aircraft type, the production of which was subsequently cancelled because of lack of demand, was All Nippon Airways and the Japanese Prime Minister at the time Kasukue Tanaka was later convicted of bribery and went to jail after being convicted of bribery. The plane had to flown to Japan or Europe for service! All airlines at this time were buying Boeing and it was no brainer for Air Lanka to do the same. The only question was new or, as SIA advised, used planes. When he ignored their advise SIA pulled out in disgust – the Air Lanka General Manager at that time was Kualsekeran ( A Sri Lankan Tamil origin now wih SIA) but he was helpless in the face of Rakitha’s insistence on going ahead with a clearly unsuitable purchase and he returned to Singapore. Why Rakitha did this is not known , but afterwords he was not a poor man, although his salary as Air Lanka Chairman did not amount to much !

This saga has gone on with every subsequent purchase under every government. Multiple tender boards and cabinet approval only increased the number of people to be bribed and naturally the cost of the planes went up. Today we are left with the fiasco of taking on long term lease planes which have a mismatch in distance they capable of flying to our existing routes, and leases signed for planes in excess of our needs where we have to pay US$ 90 million to cancel our contract. Who was responsible? No one knows or cares and many in the old management responsible for this and other fiascos are being reappointed to the revamped airline. Beyond this we have had the spectacle of the employment contract of the Emirates Manager cancelled because he refused to offload paying passengers to accommodate Rajapakse’s cronies going on a junket abroad. No wonder Emirates pulled out. Now we talk about starting on a clean slate – the Government takes over Si Lankan Airways’ debts and we find a new partner and start afresh on a clean slate– if we succeed it will be because our new partner wants our sovereign routes negotiated by the Civil Aviation Authority on a government to government basis, not to help us. Besides the long suffering public who pay high fares, the dedicated hardworking airline staff face downsizing due to the financial situation outside their control. SIA has never downsized Singapore staff even once and has expanded employment every year. Any temporary business downturn affects only foreign contract staff.

The success of SIA has had many spinoffs. SIA had to set up extensive maintenance facilities for its planes, and then started servicing planes for other airlines. This attracted aircraft and engine manufacturers like Rolls Royce and Pratt and Whitney to set up their Asian hubs in Singapore. Seeing a chance to set up a regional centre of excellence, the government offered the old RAF base at Payar Lebar as the center for the aviation hub to serve airlines in the Asian region. Rolls Royce has its largest facility outside Derby here, capable of fully stripping and re-assembling an engine. Pratt and Whitney has 2000 of its 3000 Asian staff located here. In total these activities, together with Changhi airport terminals (but not including SIA) provide 20,000 well paid jobs for Singaporeans and expats and government revenue via taxes.

If we had been smart we could have attracted some of this to our shores, as our location on the international air traffic lanes is as good as Singapore. But our aviation efforts never got off the ground because the chance to make easy money on aircraft purchases proved irresistible. We have an airline that is in debt for a billion dollars, an ageing airport in Katunayake and a brand new state of the art airport in Mattala, where no one seems to want to fly. A friend of mine, Dayantha Athulathmudali offered his services free of charge to the Rajapakse regime. He had spent10 years in Singapore as the regional consultant on airports to the International Air Transport Administration ( IATA) and is an acknowledged authority on airport design. His suggestion was that we build a second runway at Katunayake and thus attract some of the East West long haul traffic to stop here as our landing fees are much less than Changhi in Singapore. He was turned down and instead we built Mattala on borrowed Chinese money. Dayantha was snapped up by Jebel Ali International airport in Dubai as a consultant, when they were expanding to become the largest and most sophisticated airport in the world. We lost a chance to grab at least some of the international flight stopover and refueling business, given to us by our favourable location. Also the intense dislocation to travelers,who have to travel at night only ( at the height of the tourist season) due to repairs to the one existing runway would not have been necessary if we had built a second one at a much lower cost than Mattala.

A sad story of corruption and incompetence. The situation is now beyond redemption. The country has only one option left – drastically reduce the route netwok and fly only the profitable ones, remove the concessionary flight concession to the Board members and senior management (this seems the main attraction of a seat on the Board) and privates the airline to the commercial sector who will run it not for the public good but to make money.

Fly me to the Moon indeed!

The writer welcomes feedback on email which he will respond to individually ~ ajitkanagasundram@gmail.com