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Mihin Lanka

Summary

Mihin Lanka was a low-fare leisure airline based in Colombo, Sri Lanka. It was owned by the Sri Lankan government.[2] The airline operated scheduled flights from its hub at Bandaranaike International Airport to a number of cities in the Indian subcontinent, the Arab states of the Persian Gulf, Southeast Asia, and Eastern Africa. It code-shared with its partner SriLankan Airlines on several routes, as part of a consolidation exercise between the two airlines.

Mihin Lanka
මිහින් ලංකා
மிஹின் லங்கா
IATA ICAO Callsign
MJ MLR MIHIN LANKA
Founded27 October 2006 (2006-10-27)
Commenced operations24 April 2007 (2007-04-24)
Ceased operations29 October 2016 (2016-10-29)
HubsBandaranaike International Airport
AllianceOneworld (affiliate; 2014—2016)
Parent companySriLankan Airlines
HeadquartersColombo 02, Sri Lanka
Key people
RevenueIncrease Rs 3.141 billion (2011)[1]
Operating incomeIncrease Rs −863.959 million (2011)[1]
Net incomeIncrease Rs −940.489 million (2011)[1]
Total assetsIncrease Rs 1.218 billion (2011)[1]
Total equityDecrease Rs 5.032 billion (2011)[1]
EmployeesIncrease 853 (2011)[1]

The airline was plagued by financial losses, debt, waste, and corruption since its inception in 2007.[3] In order to reduce losses and increase productivity, the government approved the merger of Mihin Lanka with SriLankan Airlines by the end of 2016.[4][5]

Mihin Lanka ceased operations in October 2016 when SriLankan Airlines resumed its schedule on routes formerly operated by Mihin Lanka and took over the additional destinations.

History edit

Mihin Lanka was incorporated on 27 October 2006.[6] Its three directors were Sajin Vass Gunawardena (CEO), Gotabhaya Rajapaksa (Chairman, brother of former Sri Lankan President Mahinda Rajapaksa) and Roshan Goonatilake (Commander of the Sri Lanka Air Force).[6] The airline is believed to have been named after Mahinda Rajapaksa, the former President of Sri Lanka.[7][8] 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][9]

Mihin began to operate on 24 April 2007 with two wet leased Airbus A320 aircraft.[10][11][12] Initially, Mihin connected Colombo with Tiruchirappalli, Thiruvananthapuram, Gaya, Bangkok, Singapore, and Malé and Gan in the Maldives.[10][13]

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.[14] In the same month, SriLankan Airlines withdrew its ground handling facilities for non-payment, forcing Mihin to manually push back its aircraft before takeoff and use its own staff to handle the check-in counters.[14] In February 2008 Mihin lost one of its aircraft, an A321, after its Turkish owners, Best Air, took it back for non-payment of lease.[12][15][16] In April 2008 it lost its other aircraft after its Bulgarian owners took it back for non-payment of lease.[12][17] Having lost both its aircraft the company was forced to suspend all operations in April 2008.[12][18] In April 2008 it was announced that Gunawardena would resign as CEO but remain on the board.[19][20] Gunawardena didn't resign but in June 2008 he was dismissed and replaced by Anura Bandara.[21] Gunawardena went on to become a Member of Parliament for President Rajapaksa's party.

Later in 2008 Mihin leased a 19-year-old A320.[22] Kapila Chandrasena replaced Anura Bandara as CEO in November 2008.[23] Mihin resumed operations on 1 January 2009 with a flight to Dubai.[24][25][26] 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.[27]

In September 2011, Mihin Lanka announced plans to serve Bangkok, Chittagong, Kozhikode, Manila and Singapore, once it took delivery of its third aircraft.[28] In August 2012, the airline took delivery of its third aircraft, an Airbus A321.[29] The airline won the Bangladesh Monitor 'Best Budget Carrier' award in 2011.[30]

In 2013 it was announced that the airline would lease two Boeing 737-800s from 2015.[31] However Mihin Lanka revised the lease agreement and leased two Airbus A320neos and one A319-100 instead, due to the cost of introducing Boeing aircraft into Mihin's all-Airbus fleet.[32]

On 29 October 2016, Mihin Lanka ceased all operations and all of its routes, staff and aircraft were taken over by SriLankan Airlines.[33]

Corporate affairs edit

Overview edit

The Sri Lankan government initially made an equity investment of LKR250 million in Mihin.[34] Lanka Putra Bank, headed by Sajin Vass Gunawardena' father, also invested LKR300 million in redeemable preference shares.[35][36] In 2008 the government gave Mihin LKR500 million to strengthen its financial position.[34] In 2009 the government gave Mihin a further grant of LKR3,000 million.[37][38] The government 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.[37][38][39] 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.[40]

Mihin was financially troubled since its establishment.[41] Official government figures show that between 2007 and 2010 it suffered losses totalling LKR5,877 million.[40] Despite cutting its workforce by a third and changing from wet lease to dry lease, Mihin made annual losses of LKR1–2 billion.[42] It was reported that between April 2011 and January 2012 Mihin lost LKR1,700 million and that the government would settle LKR2.4 billion of loans on behalf of the company.[43][44] 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.[41] Opposition politicians called for the closure of Mihin, which they claim has lost LKR13 billion since creation.[45][46]

Mihin was 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.[41]

Business figures edit

Profit & loss (LKR million)[38][40]

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Revenue — 2,570 373 1,700 3,142 5,099 7,481 9,963 10,262 11,702
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) (940) (1,968) (3,293) (2,592) (1,406) (1,196)

Balance sheet (LKR million)[38][40]

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)

Destinations edit

Mihin Lanka previously served the following destinations.[47]

Country-city Airport code Airport name
IATA ICAO
Bangladesh
Dhaka DAC VGZR Shahjalal International Airport
Bahrain
Bahrain BAH OBBI Bahrain International Airport
India
Chennai MAA VOMM Chennai International Airport
Gaya GAY VEGY Gaya Airport
Kolkata CCU VECC Netaji Subhas Chandra Bose International Airport
Madurai IXM VOMD Madurai International Airport
Trichy TRZ VOTR Trichy International Airport
Trivandrum TRV VOTV Trivandrum International Airport
Varanasi VNS VIBN Lal Bahadur Shastri Airport
Indonesia
Jakarta CGK WIII Soekarno–Hatta International Airport
Medan KNO WIMM Kuala Namu International Airport
Kuwait
Kuwait City KWI OKBK Kuwait International Airport
Maldives
Malé MLE VRMM Ibrahim Nasir International Airport
Oman
Muscat MCT OOMS Muscat International Airport
Pakistan
Lahore LHE OPLA Allama Iqbal International Airport
Seychelles
Mahé SEZ FSIA Seychelles International Airport
Singapore
Singapore SIN WSSS Singapore Changi Airport
Sri Lanka
Colombo CMB VCBI Bandaranaike International Airport HUB
Hambantota HRI VCRI Mattala Rajapaksa International Airport
Thailand
Bangkok BKK VTBS Suvarnabhumi Airport
United Arab Emirates
Abu Dhabi AUH OMAA Abu Dhabi International Airport
Dubai DXB OMDB Dubai International Airport
Sharjah SHJ OMSJ Sharjah International Airport

Codeshare agreements edit

Mihin Lanka had codeshare agreements with the following airline as of July 2015:

Fleet edit

Formerly operated edit

Aircraft Fleet Introduced Retired
Airbus A319-100 1 2015 2016
Airbus A320-200 5 2007 2016
Airbus A321-100 1 2007 2016
Airbus A321-200 2 2012 2016
Boeing 737-800 1 2008 2008

Incidents and accidents edit

  • On 6 January 2008, Mihin Lanka 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 Bandaranaike International Airport, Colombo without a vital component in one engine. There were no casualties.[citation needed]
  • On 9 April 2012, Mihin Lanka 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 in the cargo hold. According to the engineers a fire had not erupted within the plane but was a technical fault. No casualties were reported.[citation needed]
  • On 13 May 2014, an A321 (call sign MJ-502) from Dhaka to Colombo made an emergency landing at Dhaka airport few minutes after takeoff due to navigation system failure.[citation needed]

References edit

  1. ^ a b c d e f "Melstacorp Annual Report 2019/20" (PDF). Parliament of Sri Lanka. Mihin Lanka. 31 March 2012. Retrieved 14 December 2020.
  2. ^ "Optimizing Mihin Lanka". Airline Industry Review. 13 May 2010. Archived from the original on 17 July 2012. Retrieved 9 November 2010.
  3. ^ "Corrupt officials, politicians exposed (COPE) but committee lacks power: DEW". Sunday Times. Sri Lanka. 4 December 2011.
  4. ^ "Sri Lankan government to merge SriLankan and Mihin to cut losses, increase productivity". ColomboPage. 29 January 2015.
  5. ^ Shirajiv Sirimane (22 July 2016). "Mihin Lanka to wind up this year, increase productivity". Daily News. Sri Lanka.
  6. ^ a b c Dilrukshi Handunnetti; Mandana Ismail Abeywickrema; Arthur Wamanan (16 December 2007). "Trainee foreign pilots fly Mihin". The Sunday Leader.
  7. ^ "Mihin to launch domestic flights". Daily News. Sri Lanka. 6 January 2009. Archived from the original on 20 November 2010.
  8. ^ Sulochana Ramiah Mohan (14 February 2010). "People's perception of Mihin has changed- CEO". Lakbimanews. Archived from the original on 20 November 2010. Retrieved 9 November 2010.
  9. ^ Kirinde, Chandani (8 February 2009). "Mihin Lanka gets tender blow with mammoty". Sunday Times (Sri Lanka).
  10. ^ a b Mihin Lanka to Dubai Archived 20 September 2007 at the Wayback Machine AME Info, 21 April 2007
  11. ^ "Mihin Lanka's first Airbus arrives at BIA". Daily News. Sri Lanka. 17 March 2007. Archived from the original on 20 November 2010. Retrieved 9 November 2010.
  12. ^ a b c d Francis, Leithen (9 July 2008). "Sri Lanka's grounded Mihin Lanka still seeking A320s". Flightglobal.com.
  13. ^ "Mihin Lanka consolidates in Singapore". Daily News. Sri Lanka. 15 October 2007. Archived from the original on 23 November 2010.
  14. ^ a b "SriLankan Airlines". Lanka Standard. 3 October 2011.
  15. ^ Francis, Leithen (12 May 2008). "Mihin Lanka closes". Flightglobal.com.
  16. ^ "Mihin loses A-321 due to default". The Sunday Leader. 24 February 2008. Archived from the original on 2 March 2012. Retrieved 4 March 2012.
  17. ^ Samarasinghe, Sonali (16 March 2008). "Govt. and directors caught in legal net as Mihin Lanka crashes". The Sunday Leader.
  18. ^ Abeywardena, Rohan (6 July 2008). "Mihin staff 'grounded' without pay". Sunday Times (Sri Lanka).
  19. ^ "Captain Jumps first from the sinking ship, Mihin Air CEO resigns". Colombo Page. 19 April 2008.
  20. ^ Ionides, Nicholas (17 June 2008). "SriLankan CEO expects no strategy shift following withdrawal of Emirates". Flightglobal.com.
  21. ^ Abeywardena, Rohan (8 June 2008). "Mihin Air's controversial CEO removed". Sunday Times (Sri Lanka).
  22. ^ Jayasundera, Ranjith (15 June 2008). "Continuing saga of Mihin". The Sunday Leader. Archived from the original on 5 June 2012. Retrieved 4 March 2012.
  23. ^ Jayasundera, Ranjith (18 January 2009). "Mihin again losing millions per day". The Sunday Leader. Archived from the original on 29 October 2013. Retrieved 4 March 2012.
  24. ^ "Dubai ride launches Mihin Lanka". Sunday Times (Sri Lanka). 4 January 2009.
  25. ^ "Mihin Lanka re-launch on 1 Jan". The Island, Sri Lanka. 28 December 2008.
  26. ^ "Mihin Lanka resumes operations". CAPA Centre for Aviation. 12 January 2009.
  27. ^ "Mihin Lanka launches second aircraft". Colombo Page. 16 December 2010.
  28. ^ SIRIMANE, Shirajiv (15 September 2011). "Mihin goes for third aircraft". Daily News. Sri Lanka. Archived from the original on 29 July 2012.
  29. ^ Lanka, Mihin (1 September 2012). "Mihin adds another Airbus A321". Mihin Lanka. Archived from the original on 9 October 2012.
  30. ^ "Bangladesh Monitor awards best airlines". The Daily Star. 29 January 2012.
  31. ^ "Sri Lanka budget carrier to operate Boeing 737s from 2015". Lanka Business Online. 25 October 2013. Archived from the original on 6 March 2014.
  32. ^ "Mihin Lanka switches ALC lease deal from B737s to A320neo".
  33. ^ "Mihin Lanka". Mihin Lanka. Archived from the original on 24 September 2016. Retrieved 31 October 2016.
  34. ^ a b "Performance Report 2007" (PDF). Department of Public Enterprises, Sri Lanka. Archived from the original (PDF) on 5 November 2010.
  35. ^ Samarasinghe, Sonali (8 July 2007). "Shaky Mihin Lanka runs into a storm". The Sunday Leader.
  36. ^ Samarasinghe, Sonali (13 January 2008). "SriLankan Airlines in financial tail spin". The Sunday Leader.
  37. ^ a b "Annual Report 2009" (PDF). Ministry of Finance and Planning (Sri Lanka). Archived from the original (PDF) on 2 November 2012.
  38. ^ a b c d "Performance Report 2009" (PDF). Department of Public Enterprises, Sri Lanka.
  39. ^ "Annual Report 2008" (PDF). Ministry of Finance and Planning (Sri Lanka). Archived from the original (PDF) on 10 July 2012.
  40. ^ a b c d "Annual Report 2010" (PDF). Ministry of Finance and Planning (Sri Lanka). Archived from the original (PDF) on 1 December 2011.
  41. ^ a b c Vishleshaka, Arthika (11 December 2011). "Huge losses in public enterprises burden finances". The Bottom Line (Sri Lanka). Archived from the original on 15 September 2012.
  42. ^ Hemmathagama, Ashwin (20 November 2011). "State Owned Loss Makers Still at Large". The Sunday Leader. Archived from the original on 20 November 2011.
  43. ^ Mohan, Sulochana Ramiah (26 February 2012). "Colossal loss incurred by Mihin". Lakbima News. Archived from the original on 4 August 2012.
  44. ^ Bastians, Dharisha (29 December 2011). "Treasury to settle Mihin's loan". Ceylon Today. Archived from the original on 4 March 2016.
  45. ^ Jabbar, Zacki (20 February 2012). "Shut down Mihin Air, losses exceed Rs. 13 billion-Harsha". The Island, Sri Lanka.
  46. ^ Ladduwahetty, Ravi (1 February 2012). "SriLankan nosedives with Rs. 19.5bn loss". The Island. Sri Lanka.
  47. ^ "Archived copy". Archived from the original on 21 May 2007. Retrieved 21 May 2007.{{cite web}}: CS1 maint: archived copy as title (link)

External links edit

  Media related to Mihin Lanka at Wikimedia Commons

  • Official website

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