7 June 2018 10:42 pm Views - 9813
In a statement, Mr. Fernando said the Board of Directors intend to make some changes in the composition of the top management team and the CEO has agreed to take an early retirement.
“There will be a new Chief for the Commercial division. Our fully owned subsidiary, the catering Company, is led by a part time CEO. We have already engaged a new CFO, who will assume office shortly. There will also be some minor reallocation of responsibilities in the organizational structure,” he said.
He told SriLankan employees that he was certain that if all give of their best and work together, they will not only restore profitability but be recognized as one of the best airlines in this region, in the short to medium term.
Mr. Fernando said: “We cannot continue with the status quo and at the same time restore profitability. We are seriously out of line with the norms in the industry. I intend organizing a briefing session by the consultants for the benefit of the leaders of all trade unions and associations.
We compete with some of the best airlines in the world. Many of them have recourse to unlimited resources. Thus we cannot be very open with all the strategies we intend pursuing. We cannot liberally distribute the restructuring plan, in our own interests".
Full letter
Message from the Chairman to all members of the Staff,
Dear Friends,
A new Board of Directors at the helm of your airline, with the undersigned as its Chairman, has been in office for approximately, the past two months. During this period I have tried to meet, as many of you as possible, in the different locations, in order to explain the perilous financial position the airline is in, and what we can and intend doing to restore viability. Despite that effort, I do realize that I have not been able to meet a large section of the staff yet, and will not be able to do so, soon enough, given the other pressing issues that needs my attention. Hence the need to address all of you in this manner.
Despite the fact that we now have an excellent Board comprising of committed professionals, that alone will not bring about a change in the fortunes of the airline. A return to profitability can only be brought about by all three parties who constitute the airline viz the Owner(the Government), the Board of Directors and the Management and Staff, decide to work tirelessly and in unison, to make that happen.
The Government as the owner is fully behind the restructuring, and is extremely supportive of this effort. It is my firm belief that the Government will not interfere with the day to day operations of the airline. On the contrary they will extend their fullest cooperation and support as they have willingly done, in the recent past. The Board on its part is fully committed to giving leadership to this effort. They have demonstrated that commitment by voluntarily agreeing not to receive any remuneration from the airline or enjoy any of the perks enjoyed by Directors in the past, till the airline becomes profitable once more. I expect that same commitment from all members of the staff. This is our National carrier. It is the carrier that flies our country’s flag to the rest of the world. It is our duty to protect it, develop it and make it profitable. We have something called pride within all of us. We do not want our airline to be a financial burden on the people of this country, year after year.
All my predecessors in office, past Boards of Directors, and all Management personnel who provided leadership, I presume, have made sincere efforts to restore viability to the airline. But we have been unsuccessful in that effort. Thus quite rightly, the Government as the owner, has sought and obtained the guidance and advice of external Consultants to assist us in that effort. This has been done prior to the new Board assuming office. However I have since discovered that the selection of the consultants has been done in a very transparent manner via public invitations for proposals. I have interacted with the consultants since assuming office and I find them very competent and committed. They comprise of individuals who have extensive experience in the different disciplines within the airline industry. As a firm they have in the recent past, successfully helped turnaround several large and reputed airlines.
But that does not imply that we are bound or obliged to implement all recommendations made by the consultants. The restructuring plan we hope to implement, is not one that is thrust on us by the Government or the Consultants. It will be a plan that we adopt. A plan we believe in. During the past two months our senior staff have been reviewing the plan together with the consultants in order to gain sufficient confidence that the plan is good for the airline, that it is practical and has taken into account our fears and concerns. Having done that, we have now arrived at an agreed set of proposals. What is now left is for us to implement the plan diligently and in a timely manner.
In doing so you have an important role to play. The trade unions and other collective bodies have a role to play. In the first place you must have an understanding of the current state of affairs of the airline and the broad initiatives we intend taking. How we expect things to change? What changes we have to bring about? What sacrifices we have to make? We cannot continue with the status quo and at the same time restore profitability. We are seriously out of line with the norms in the industry.
I intend organizing a briefing session by the consultants for the benefit of the leaders of all trade unions and associations. You will realize that we operate in a very competitive Global industry. We compete with some of the best airlines in the world. Many of them have recourse to unlimited resources. Thus we cannot be very open with all the strategies we intend pursuing. We cannot liberally distribute the restructuring plan, in our own interests. However we shall brief you adequately on the restructuring plan.
Despite this communique being lengthy, I must refer to one more matter which is critical. It needs only a moments reflection for all of you to realize that the most important decision any Board makes is the appointment of the CEO of the Company and the Senior Management team. It is the CEO and his team that is responsible for conducting the day to day affairs of the company. However good a plan may be, the results derived from it, will depend on how it is implemented. It is the passion that the top team displays, that will invigorate and energize the rest of the staff. The Board intends to make some changes in the composition of the top management team. The current CEO has agreed to take an early retirement. There will be a new Chief for the Commercial division.
Our fully owned subsidiary, the catering Company, is led by a part time CEO. That Company, is a jewel in the crown of the group, in terms of profitability. It requires a full time CEO and our present CF&AO who has been overseeing its operations will move over there, as its full time CEO. We have already engaged a new CFO, who will assume office shortly. There will also be some minor reallocation of responsibilities in the organizational structure.
A final word on the dynamics of CHANGE. Change is always traumatic. All of us today, are in what change management “specialists” would call the “Neutral Zone”. The neutral zone is a “No man’s land between the old and the new”. It is the night during which we are disengaged from yesterday’s concerns and prepare for the tomorrows. It represents the chaos in which the old form of things dissolves and from which the new form emerges.
This is a stage where each one of you can play an active role, by for instance, identifying what needs to be changed, proposing better and more efficient ways of doing things, identifying new revenue opportunities, cutting down costs, eliminating waste etc. I am certain that if we all give of our best and work together, we will not only restore profitability but be recognized as one of the best airlines in this region, in the short to medium term.
Yours Sincerely,
Ranjit Fernando
Chairman