Previous UL Chairman bypassed laid down procedure in appointing GSAs

Top officials at SriLankan Airlines had not followed the proper procedure, detailed in its 2009 manual, when selecting General Sales Agents (GSA) for a number of countries, it was revealed at the Presidential Commission of Inquiry (PCoI) on irregularities at SriLankan Airlines, SriLankan Catering and Mihin Lanka, yesterday.

Shiromi Cooray, Manager, Industrial Relations at SriLankan revealed this, testifying before the commission. According to the manual, prior to selecting a GSA, SriLankan must conduct a market survey (if it is to be established in a new territory), call for applications through advertising in newspapers and SriLankan website and conduct a number of reviews, including legal and financial.

The applicants should meet the criteria, including experience in the international travel market, qualified staff and prior experience in representing airlines, which was an added advantage. If an agent was accredited with the International Air Transport Association (IATA), such companies had to form a fully owned subsidiary to apply. “IATA accredited agencies handle a number of international airlines and such companies might have a conflict of interest. Thus, to prevent that we want them to form a separate company so that they can only focus on promoting us,” she said.

According to Cooray, the shortlisted candidates had to be evaluated by a committee and according to the 2009 manual and the agency that was selected by a majority of committee members appointed as GSA.

“However, between 2012 and 2015, former Chairman of SriLankan Nishantha Wickremesingha instructed CEO Kapila Chandrasena to change the criteria in selecting GSAs, set by the manual. There has been no board approval for these changes,” Cooray said referring to the minutes.

A number of agreements, signed with various travel agencies, in countries that included Dubai, Seychelles, Thailand, Singapore and Pakistan, SriLankan had not followed the procedures. For example, the agreement signed with Ms Vision Voyage for Seychelles in 2013 had not been cleared in a financial or legal review. Nor was a market survey carried out. “According to the 2009 manual overriding commission (ORC), a commission paid to an agent or broker on business sold by sub agents in his or her territory, that SriLankan can pay for a GSA is 2.5% for passengers. However in GSA agreements signed with companies in Dubai, Seychelles, Thailand, Singapore and Pakistan, SriLankan has paid over 5%,” she said referring to board meetings.