New administration, travel plan to recover colossal loss
The controversial state owned budget airline Mihin Lanka is set to get a new lease of life with plans afoot to procure six Chinese built aircraft ‘for keeps’ early next year, Minister of Irrigation and Water Management and Minister of Ports and Aviation, Chamal Rajapaksa said in Parliament yesterday.
“Mihin Lanka was established with good intentions, but it ended in disaster because of several mistakes that were made. We have studied our mistakes and I’m sure we can make this a profit making venture,” he said. “We are planning to purchase six Chinese built aircraft and recommence Mihin Lanka operations under a new administration,” he added. He also said that the plan is to focus more on internal and short distance travel in the future.
Meanwhile, Minister of Power Mahindananda Aluthgamage claimed that it was a serious blunder made by the previous management that led to the collapse of Mihin Lanka. The previous top management leased out the planes before even making a business plan, Aluthgamage charged.
“The Mihin administration made a lot of blunders. They brought down two planes without even having a business plan or landing rights of the targeted destinations,” he said. “The planes were leased spending US $ 2,300 and US $ 2,200 a month and with the intention of having 350 flight hours a month. Since we did not have landing rights the planes only flew one 10th of that time, but that was not the only reason for the losses,” he added.
The government wanted to make air travel accessible to all Sri Lankan citizens and because of that the tickets were priced at a subsidised rate, Aluthgamage pointed out. He added that a total of 215,517 passengers flew Mihin and each ticket sold was at a financial loss.
“The airline made losses of approximately Rs.7,000, 5,000 and 4,000 per passenger flying to Dubai, Maldives and Bodh Gaya respectively. Within the time Mihin operated it lost Rs. 1.22 billion because of this subsidisation,” he said. “The end result was that the total expenditure was Rs. 6,200 million while the revenue was only Rs. 2,400 million,” he added.
However, these mistakes can be remedied and Mihin can be made a profit making venture, if all unnecessary expenses are removed, Aluthgamage added. “I’m sure there was embezzlement, but it was not as bad as what people thought,” he emphasised.
The Bottom Line
The controversial state owned budget airline Mihin Lanka is set to get a new lease of life with plans afoot to procure six Chinese built aircraft ‘for keeps’ early next year, Minister of Irrigation and Water Management and Minister of Ports and Aviation, Chamal Rajapaksa said in Parliament yesterday.
“Mihin Lanka was established with good intentions, but it ended in disaster because of several mistakes that were made. We have studied our mistakes and I’m sure we can make this a profit making venture,” he said. “We are planning to purchase six Chinese built aircraft and recommence Mihin Lanka operations under a new administration,” he added. He also said that the plan is to focus more on internal and short distance travel in the future.
Meanwhile, Minister of Power Mahindananda Aluthgamage claimed that it was a serious blunder made by the previous management that led to the collapse of Mihin Lanka. The previous top management leased out the planes before even making a business plan, Aluthgamage charged.
“The Mihin administration made a lot of blunders. They brought down two planes without even having a business plan or landing rights of the targeted destinations,” he said. “The planes were leased spending US $ 2,300 and US $ 2,200 a month and with the intention of having 350 flight hours a month. Since we did not have landing rights the planes only flew one 10th of that time, but that was not the only reason for the losses,” he added.
The government wanted to make air travel accessible to all Sri Lankan citizens and because of that the tickets were priced at a subsidised rate, Aluthgamage pointed out. He added that a total of 215,517 passengers flew Mihin and each ticket sold was at a financial loss.
“The airline made losses of approximately Rs.7,000, 5,000 and 4,000 per passenger flying to Dubai, Maldives and Bodh Gaya respectively. Within the time Mihin operated it lost Rs. 1.22 billion because of this subsidisation,” he said. “The end result was that the total expenditure was Rs. 6,200 million while the revenue was only Rs. 2,400 million,” he added.
However, these mistakes can be remedied and Mihin can be made a profit making venture, if all unnecessary expenses are removed, Aluthgamage added. “I’m sure there was embezzlement, but it was not as bad as what people thought,” he emphasised.
The Bottom Line
