SriLankan Airlines (UL, Colombo International) violated government procurement guidelines by ordering ten Airbus widebodies and agreeing to lease a further four without due cost-benefit analysis, the Lankan Auditor General said in a special report.
"It was not confirmed that the Management had made above decisions [to add the A330 and A350 widebodies] after making comprehensive cost-benefit analysis on the contribution, which can be made to the profit of the Company by way of running aircraft on relevant air routes, which were to be added to the fleet bearing a huge cost," the audit report said.
According to the audit, the airline selected Seabury as the consultant without formally soliciting comparable proposals from all consultants, without ensuring confidentiality of proposals, and with multiple other procedural errors.
In 2017, the Office of the Auditor General was requested by the parliamentary Committee on Public Enterprises to evaluate the flag carrier's fleet decisions.
The audit concerned an order placed in 2013, wherein SriLankan Airlines committed to buy six A330-300s at USD104.4 million each and four A350-900s at USD136.6 million each, and additionally to take four A350-900s from lessors (three from ILFC and one from AerCap).
The airline has taken all six A330-300s and added another aircraft of the type but later reneged on its decision to add the A350s. It has already cancelled half of the order, which cost it - according to the audit results - LKR16.9 billion Sri Lankan rupees (USD94 million) in compensation and a further LKR134.1 million (USD745,000) in legal and consulting fees.
SriLankan Airlines still has four A350-900s on order, although it signalled earlier this year that it will seek to convert these orders to A330-900 aircraft.
The Auditor General also pointed out that not only was the process of selecting the consultants and developing the new fleet strategy procedurally fraught, it was not adhered to by the flag carrier. SriLankan Airlines took one more A330-300 than planned and increased its fleet of A320 family aircraft quicker than planned.
The audit covered the period from 2011 to 2017 and, as such, does not discuss the current fleet or financial situation of the airline.
According to the ch-aviation fleets module, the carrier currently operates five A320-200s, two A320-200neo, two A321-200s, four A321-200neo, seven A330-200s, and seven A330-300s.
