This is about the financial crisis of the national airline of Sri Lanka "Srilankan Airlines".

1. Financial Crisis of the
Sri Lankan Airlines

3. Revenue vs Loss/Profit
-50000
0
50000
100000
150000
200000
250000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
REVENUE
EXPENDITURE
NET LOSS/PROFIT
Analysis of annual reports from 2005

4. Reasons Affected for the Crisis
(since 2008)
Unavoidable
• Fluctuations in jet fuel prices
• Depreciation of the LKR
• Foreign currency fluctuations
Can control if proper leadership style practiced
• High expenses on overseas offices
• Cancelling lease agreement on one A350-900
aircraft in 2016 at a one-time cancellation fee (
Annual Report 2015/16)
• Politically appointed incapable Board Members

5. • Heavy expenses on Brand promotions
• High operational expenses
• Rising interest rates on existing loan facilities
• Paying high lease rates for Airbuses
• Higher intervention of Sri Lankan Government on Airline operations
• Huge competition from other Airlines ( Ticket fare, facilities )
• Poor selection of operating routes
To Frankfurt, Paris, Rome, Moscow etc
• Sourcing foreign media to cover international sporting events sponsored
by the Airline

6. “leadership facilitates
organizational performance
enhancement”
(Bhargavi & Yassen, 2016, p.
2016).

7. Leadership Style
observed in Sri Lankan
Airlines
Autocratic
Leadership

8. Characteristics of autoceatic
leadership style

9. Cancelling Lease Agreement on one A350-900 aircraft
in 2016 at a one-time cancellation fee ( Annual Report 2015/16)

10. • Heavy expenses on
Brand promotions

11. “The autocratic style is characterized by
the dominance of authoritarian leaders
in organizations. They dictate to their
subordinates what they should or
should not do and are not interested in
any kind of feedback”
(Bhargavi & Yassen, 2016)

12. I would like to highlight major issue which caused heavy financial loss to company
as a result of autocratic leadership style.
1. The cancelation of Airbus agreement that I mentioned above is evidence for autocratic
decision making of chairman and director board. * Its simply director board in 2016
decided to purchase some aircrafts and made an advance payment for it and when
director board changed with government they cancel the agreement, therefore airline
have to pay a 14,362 million rupees to airbus company as a penalty as per the auditor
of annual report annual report 2015/16 .
2. In this occasion we can identify whole director board have act as an group of autocratic
leaders because they have made their own and sudden decisions. If director board get
feedback from well experienced professionals in airline such as CFO, CCO, Flight
operation department they could have a different idea and solution for this matter. Poor
features of autocratic leadership style such as lack of trust on own team and not getting
their feedback is more visible here.
3. Another issue is high budget such as 14,550 Mn had spent as per annual report 2020/21 for
marketing purpose in 2022 to minimize the loss. but there is no significant result of it is not
visible regarding profit. Company have reported increasing loss further. This shows the
quality of autocratic lack of creativity when it come to launching marketing campaigns.
4. Taking loans on High interest rates is showing the nature of autocratic leaders that
taking any kind of risky step to achieve their goals

13. Authentic
Leadership
Types of leaders
that Sri Lankan
Airline needs now

14. Authentic Leadership
Authentic leadership approach developed by George (2003;
George & Sims, 2007)
• They do not compromise their values, but rather use those situations to
strengthen their values
• Self-discipline gives them focus and determination
• They are able to stay focused on their goals
• They have the capacity to open themselves up and establish a connection
with others.
• Enable leaders to be selfless and make judgments that serve the greater
good of the group, organization, or community

15. What type of leaders needs? AUTHENTIC 👍

16. I suggest that authentic leadership approaches for Srilankan airlines.
1. As per this diagram one of authentic leaders’ quality is RELATIONSHIPS. They
always connected with their team and getting ideas from them. If this was practiced
when cancelation of airbus agreement chairman and directors could get a different
idea or a smart solution because airline have a well experiences professionals like
CFO,CCO,CMO. because it said to be two head are better than one philosophy.
2. If there is a autocratic leader what he will do is doing marketing campaign in creative
and cost efficient way because authentic leaders are creative and they really think
about companies money comparing with autocratic leaders. This is the quality of
authentic leaders PURPOSE and PASSION.
3. There is a issue regarding the values of chairman and board because they are just
appointed by the politics without considering their industry related qualifications. They
need to act according to their VALUES as authentic leaders do, without connecting
them self with political agenda
4. One of other quality is PURPOSE and PASSION. Passionate leaders are interested
in what they are doing, are inspired and care about their work. If this was practiced
chairman and board, they could have an action plan about which steps to be taken to
minimize loss.

17. Stogdill’s Second Survey(1974)
1. Drive for responsibility and task completion;
2. Vigor and persistence in pursuit of goals
3. Risk taking and originality in problem solving;
4. Drive to exercise initiative in social situations;
5. Self-confidence and sense of personal identity
6. Willingness to accept consequences of decision and action
7. Readiness to absorb interpersonal stress
8. Willingness to tolerate frustration and delay
9. Ability to influence other people’s behavior.
10. Capacity to structure social interaction systems to the purpose at hand

18. • What I have learned from this analysis and study is that a company does not
have proper leadership from the beginning, or that leadership does not
understand financial control, budget control, and expenditure control, or that
leadership does not work together with coworkers and does not have a sense
of the organization they lead. It means that an organization will never develop
if it is only on the position.
• Similarly, what is called leadership is primarily formed on attitudes.
• This study shows that a person who has narrow attitudes, who only thinks
about his own benefit, who spends the company's money as he likes because
it is not his investment, who thinks about his own benefits rather than the
development of the company while receiving salaries from people's taxes, can
never sit in the front seat of a company and think about the development of
that company. Then I learned.
Reflection

19. List of References
• Maxwell, J. C. (1999). The 21 Indispensable Qualities of a Leader. Nashvill,
Tennessee, America: Thoms Nelson Publishers.]
• https://www.forbes.com/sites/forbescoachescouncil/2020/03/11/tradition
al-leadership-vs-servant-leadership/?sh=11dc83a0451e
• Annual Reports of Sri Lankan Airlines
https://www.srilankan.com/en_uk/corporate/annual-reports
• Peter G. Northouse. Leadership Theory and Practice (7th Edition)
• https://www.youtube.com/watch?v=OTuJ3wPfAws - GET REAL with
Mahieash Johnney | Episode 83 | Flying SriLankan to the Future (Interview with
Srilankan Airlines chairman)