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Mihin Lanka

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Mihin Lanka
File:Mihinlankalogo.jpg
IATA ICAO Call sign
MJ MLR MIHIN LANKA
Founded27 October 2006
Commenced operations24 April 2007
Hubs
Fleet size3
Destinations12
Parent companySriLankan Airlines
HeadquartersE.M.L Building, No/ 61 W.A.D. Ramanayake Mawatha, Colombo 2, Sri Lanka
Key peopleKapila Chandrasena (CEO)
RevenueIncrease LKR1,700 million (FY 2010)
Operating incomeDecrease LKR-728 million (FY 2010)
Net incomeIncrease LKR-1,221 million (FY 2010)
Total assetsIncrease LKR520 million (FY 2010)
Total equityDecrease LKR-5,628 million (FY 2010)
Websitewww.mihinlanka.com

Mihin Lanka is a low-fare airline based in Colombo, Sri Lanka. It is owned by the Sri Lankan government.[1] The airline operates scheduled flights from its hub at Bandaranaike International Airport to a number of cities in the Indian subcontinent, the Gulf States and Southeast Asia. It code-shares with its partner SriLankan Airlines on several routes, as part of a consolidation exercise between the two airlines. Currently it operates three aircraft.[2]

The airline is believed to have been named after Mahinda Rajapaksa, the current President of Sri Lanka. Kapila Chandrasena is the current Chief Executive Officer.[3][4] The airline has been plagued by financial losses, debt, waste, corruption and other irregularities since its inception in 2007.[5]

History

Mihin Lanka was incorporated on 27 October 2006.[6] It's three directors were Sajin Vass Gunawardena (CEO), Gotabhaya Rajapaksa (Chairman, brother of Sri Lankan President Mahinda Rajapaksa) and Roshan Goonatilake (Commander of the Sri Lanka Air Force).[6] It was launched without the approval of the Cabinet or the Civil Aviation Authority and its three aircraft were leased without a tender process.[6][7]

Mihin started operating on 24 April 2007 with two wet leased Airbus A320 aircraft.[8][9][10] It was established by the Sri Lankan government to operate services to India and the Middle East. Initially, Mihin connected Colombo with seven destinations - Tiruchirappalli, Thiruvananthapuram, Bodhgaya, Bangkok, Singapore, and Malé and Gan in the Maldives.[8][11]

In December 2007 Mihin was forced to ground the A320 serving India after the aircraft's Bulgarian owners BH Air had instructed its pilots not to fly the aircraft as Mihin had not settled its lease payments.[12] In the same month SriLankan Airlines withdrew its ground handling facilities for non-payment forcing Mihin to manually pushback its aircraft before take off and use its own staff to handle the check-in counters.[12] In February 2008 Mihin lost of one of its aircraft, an A321, after its Turkish owners Best Air took it back for non-payment of lease.[10][13][14] In April 2008 it lost its other aircraft after its Bulgarian owners took it back for non-payment of lease.[10][15] Having lost both its aircraft the company was forced to suspend all operations in April 2008.[10][16] In April 2008 it was announced that Gunawardena would resign as CEO but remain on the board.[17][18] Gunawardena didn't resign but in June 2008 he was dismissed and replaced by Anura Bandara.[19] Gunawardena went on to become a Member of Parliament for President Rajapaksa's party.

Later in 2008 Mihin leased a 19 year old A320.[20] Kapila Chandrasena replaced Anura Bandara as CEO in November 2008.[21] Mihin resumed operations on 1 January 2009 with a flight to Dubai.[22][23][24] In November 2009 Mihin took over an ex Air Deccan Airbus A320. In December 2010 Mihin purchased an Airbus A321 whose maiden flight under the Mihin name was on 16 December 2010.[25]

In September 2011, Mihin Lanka announced that it plans to serve Bangkok, Chittagong, Kozhikode, Manila and Singapore, once it takes delivery of its third aircraft.[26] In August 2012, the airline took delivery of its third aircraft, an Airbus A321.[27]

Hub information

An Airbus A321-200 at Colombo-BIA

Destinations

The airline also operates to Chittagong in the form of a luxury coach service connecting passengers to and from its flight to Dhaka, where they will board Mihin Lanka's flight to Bandaranaike International Airport in Colombo, Sri Lanka.

[Hub] Primary Hub
‡ Secondary hub
[S] Seasonal
[T] Terminated destination
City Country IATA ICAO Airport Refs
Bahrain  Bahrain BAH OBBI Bahrain International Airport
Colombo  Sri Lanka CMB VCBI Bandaranaike International Airport[Primary Hub]
Delhi  India DEL VIDP Indira Gandhi International Airport [28]
Dhaka  Bangladesh DAC VGHS Shahjalal International Airport
Dubai  United Arab Emirates DXB OMDB Dubai International Airport
Gaya  India GAY VEGY Gaya Airport[S]
Hambantota  Sri Lanka HRI VCRI Mattala Rajapaksa International Airport‡
Jakarta  Indonesia CGK WIII Soekarno–Hatta International Airport
Madurai  India IXM VOMD Madurai Airport [29]
Medan  Indonesia MES WIMM Polonia International Airport
Sharjah  United Arab Emirates SHJ OMSJ Sharjah International Airport
Varanasi  India VNS VIBN Babatpur Airport[S]

Fleet

Mihin Lanka Airbus A320-200 in the ramp area of Bandaranaike International Airport
Mihin Lanka Airbus A320-200 after landing at Dubai International Airport

Current

The current Mihin Lanka fleet consists of the following three aircraft. 1 A320 and 2 Airbus A321s.[4] The airline is considering of leasing a few Boeing 777-200ER aircraft for commencing long haul operations . A second Airbus A320-200 (reg: 4R-MRE) was added to the fleet to replace the exsisting A320.

Mihin Lanka fleet
Aircraft Total Orders Options Passengers Notes
C Y Total
Airbus A320-200 1 0
—
0 180 180 4R-MRE
Airbus A321-200 2 0
—
0 210 210 4R-MRC and 4R-MRD
Total 3 0 0

Retired

Aircraft model Total aircraft First delivery Last flight Disposition Notes
Airbus A321-100 1 2008 2009
Boeing 737-800 1 2007 2008

Finances

Mihin Lanka Airbus A320-232 at Shahjalal International Airport for the first time

The Sri Lankan government initially made an equity investment of LKR250 million in Mihin.[30] Lanka Putra Bank, headed by Sajin Vass Gunawardena' father, also invested LKR300 million in redeemable preference shares.[31][32] In 2008 the government gave Mihin LKR500 million to strengthen its financial position.[30] In 2009 the government gave Mihin a further grant of LKR3,000 million.[33][34] The government has also guaranteed two bank loans taken out by Mihin: a three year (2006–09) LKR250 million loan from the state-owned Bank of Ceylon and a three year (2009–12) LKR1,553 million loan from the Bank of Ceylon to lease an aircraft.[33][34][35] In 2010 the government made a further equity investment of LKR2,754 million, taking its total equity in Mihin to LKR3,004 million as at 31 December 2010.[36]

Mihin has been financially troubled since it was established.[37] Official government figures show that between 2007 and 2010 it made losses totalling LKR5,877 million.[36] Despite cutting its workforce from by a third and changing from wet lease to dry lease Mihin continues to make annual losses of LKR1-2 billion.[38] It has been reported that between April 2011 and January 2012 Mihin made losses of LKR1,700 million and that the government would settle LKR2.4 billion of loans on behalf of the company.[39][40] Mihin was unable to repay a LKR500 million loan it received from the state-owned Airport Aviation Services (Private) Ltd and the government had to settle the loan on behalf of Mihin.[37] Opposition politicians have called for the closure of Mihin which they claim has lost LKR13 billion since creation.[41][42]

Mihin has also been subject to financial irregularities with the financial figures it provided to Parliamentary Committee on Public Enterprises (COPE) being contradicted by the findings of the Auditor General.[37]

Profit & Loss (LKR million)[34][36]

2007 2008 2009 2010
Revenue - 2,570 373 1,700
Expenditure 195 4,970 1,080 2,488
Gross Profit/(Loss) (195) (2,400) (707) (728)
Net Profit/(Loss) Before Tax (195) (3,161) (1,300) (1,221)

Balance Sheet (LKR million)[34][36]

2007 2008 2009 2010
Non-Current Assets 23 39 55 38
Current Assets 381 264 386 482
Current Liabilities 599 2,805 2,089 2,606
Non-Current Liabilities 550 304 2,759 3,541
Equity (195) (2,608) (4,406) (5,628)

Awards and achievements

  • Low Cost Airline of the Year 2011 – The Bangladesh Monitor Awards [43]

Incidents

2000s

  • On 6 January 2008, flight MJ401 from Colombo to Dubai was forced to issue a Mayday call and perform an emergency landing at the Chhatrapati Shivaji International Airport in Mumbai after one engine developed a severe oil leak and stopped working. Passengers were informed that the incident was due to the plane leaving Colombo without a vital component in one engine. There were no casualties.[44]

2010s

  • On 9 April 2012, flight MJ603 from Colombo to Jakarta, called an emergency landing back to Bandaranaike International Airport, Katunayake after about 1 hour from take off, due to a suspected fire alarm triggered on the after cargo hold. On arrival to Colombo it was found the triggered alarm was a faulty.
  • On 30th Dec 2012, An Airbus A320-200 landed in Bahrain with a technical issues surrounded by fire brigades. After repair of flight departed next day.

References

  1. ^ "Optimizing Mihin Lanka". Airline Industry Review. 13 May 2010. Retrieved 9 November 2010.
  2. ^ Mihin Lanka Fleet Details and History
  3. ^ Mihin to launch domestic flights Daily News, 2009-01-06
  4. ^ a b Sulochana Ramiah Mohan (14 February 2010). "People's perception of Mihin has changed- CEO". Lakbimanews. Retrieved 9 November 2010.
  5. ^ "Corrupt officials, politicians exposed (COPE) but committee lacks power: DEW". Sunday Times (Sri Lanka). 4 December 2011.
  6. ^ a b c Dilrukshi Handunnetti; Mandana Ismail Abeywickrema; Arthur Wamanan (16 December 2007). "Trainee foreign pilots fly Mihin". The Sunday Leader.
  7. ^ Kirinde, Chandani (8 February 2009). "Mihin Lanka gets tender blow with mammoty". Sunday Times (Sri Lanka).
  8. ^ a b Mihin Lanka to Dubai AME Info, 2007-04-21
  9. ^ "Mihin Lanka's first Airbus arrives at BIA". Daily News. 17 March 2007. Retrieved 9 November 2010.
  10. ^ a b c d Francis, Leithen (9 July 2008). "Sri Lanka's grounded Mihin Lanka still seeking A320s". Flightglobal.com.
  11. ^ "Mihin Lanka consolidates in Singapore". Daily News. 15 October 2007.
  12. ^ a b "SriLankan Airlines". Lanka Standard.
  13. ^ Francis, Leithen (12 May 2008). "Mihin Lanka closes". Flightglobal.com.
  14. ^ "Mihin loses A-321 due to default". The Sunday Leader. 24 February 2008.
  15. ^ Samarasinghe, Sonali (16 March 2008). "Govt. and directors caught in legal net as Mihin Lanka crashes". The Sunday Leader.
  16. ^ Abeywardena, Rohan (6 July 2008). "Mihin staff 'grounded' without pay". Sunday Times (Sri Lanka).
  17. ^ "Captain Jumps first from the sinking ship, Mihin Air CEO resigns". Colombo Page. 19 April 2008.
  18. ^ Ionides, Nicholas (17 June 2008). "SriLankan CEO expects no strategy shift following withdrawal of Emirates". Flightglobal.com.
  19. ^ Abeywardena, Rohan (8 June 2008). "Mihin Air's controversial CEO removed". Sunday Times (Sri Lanka).
  20. ^ Jayasundera, Ranjith (15 June 2008). "Continuing saga of Mihin". The Sunday Leader.
  21. ^ Jayasundera, Ranjith (18 January 2009). "Mihin again losing millions per day". The Sunday Leader.
  22. ^ "Dubai ride launches Mihin Lanka". Sunday Times (Sri Lanka). 4 January 2009.
  23. ^ "Mihin Lanka re-launch on Jan. 1". The Island, Sri Lanka. 28 December 2008.
  24. ^ "Mihin Lanka resumes operations". CAPA Centre for Aviation. 12 January 2009.
  25. ^ "Mihin Lanka launches second aircraft". Colombo Page. 16 December 2010.
  26. ^ SIRIMANE, Shirajiv (15 September 2011). "Mihin goes for third aircraft". Daily News (Sri Lanka).
  27. ^ Lanka, Mihin (1 September 2012). "Mihin adds another Airbus A321". Mihin Lanka official website.
  28. ^ http://www.mihinlanka.com/download/MJ_Summer_Schedule.pdf
  29. ^ http://www.thehindubusinessline.com /industry-and-economy/logistics/article3978478.ece?homepage=true&ref=wl_home
  30. ^ a b "Performance Report 2007" (PDF). Department of Public Enterprises, Sri Lanka.
  31. ^ Samarasinghe, Sonali (8 July 2007). "Shaky Mihin Lanka runs into a storm". The Sunday Leader.
  32. ^ Samarasinghe, Sonali (13 January 2008). "SriLankan Airlines in financial tail spin". The Sunday Leader.
  33. ^ a b "Annual Report 2009" (PDF). Ministry of Finance and Planning (Sri Lanka).
  34. ^ a b c d "Performance Report 2009" (PDF). Department of Public Enterprises, Sri Lanka.
  35. ^ "Annual Report 2008" (PDF). Ministry of Finance and Planning (Sri Lanka).
  36. ^ a b c d "Annual Report 2010" (PDF). Ministry of Finance and Planning (Sri Lanka).
  37. ^ a b c Vishleshaka, Arthika (11 December 2011). "Huge losses in public enterprises burden finances". The Bottom Line (Sri Lanka).
  38. ^ Hemmathagama, Ashwin (20 November 2011). "State Owned Loss Makers Still At Large". The Sunday Leader.
  39. ^ Mohan, Sulochana Ramiah (26 February 2012). "Colossal loss incurred by Mihin". Lakbima News.
  40. ^ Bastians, Dharisha (29 December 2011). "Treasury to settle Mihin's loan". Ceylon Today.
  41. ^ Jabbar, Zacki (20 February 2012). "Shut down Mihin Air, losses exceed Rs.13 billion-Harsha". The Island, Sri Lanka.
  42. ^ Ladduwahetty, Ravi (1 February 2012). "SriLankan nosedives with Rs. 19.5bn loss". The Island, Sri Lanka.
  43. ^ "Bangladesh Monitor awards best airlines". The Daily Star.
  44. ^ Leon Berenger (13 January 2008). "Mihin Lanka's near disaster in the air". Sunday Times Online. Retrieved 9 November 2010.
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