Opinion

Airline Pilots – salaries and income tax reforms

Published

4 years ago

2022/10/28

By Capt Gihan
A Fernando, MBA

Honorary Life Member, Air Line Pilots’ Guild of Sri Lanka (affiliated the International Federation of Air Line Pilot Associations)
Former Secretary, Air Ceylon Pilots’ Guild and Air Line Pilots’ Guild of Sri Lanka
Former Member Air Line Pilots’ Association Singapore
Life Member Organisations of Professional Associations (OPA)

It is no secret that Sri Lankan airline pilots engaged in international flying are highly paid and therefore in the country’s highest slab of income taxation. Their income is received direct from their employer. Their profession is strictly regulated and they cannot engage in private practice, unlike many other professions.In 1947 when Air Ceylon was formed, a DC-3 Dakota Captain’s maximum basic salary (without allowances) was Rs 800 per month. The Ceylon Air Line Pilots’ Association (CALPA) and later the Air Ceylon Pilots’ Guild (ACPG), as it was then known, tried but failed to negotiate for higher salaries. One Air Ceylon Chairman (who was known as ‘our man in Bonn’ at one time, and father of a present Member of Parliament) even asked how the Pilots’ Guild had the audacity to ask for salaries over and above what he was earning.

That status quo remained almost the same until 1977, when the Secretary of Defence, General Don Sepala Attygalle, declared that the Army Corporal who drives his car was earning almost the same wage as airline pilots, and increased pilots’ salaries all round by Rs. 1,600 per month.

Then in 1979, when Air Lanka was established, national pilot salaries underwent another increase with ‘per diem’ allowances matching international standards. The standard method of calculating these allowances is based on the crew duty time starting one hour before departure time, and finishing half an hour after landing. For want of a better method, traditionally there was a certain value added to breakfast, lunch and dinner; and if the crew member was on duty during those meal times, a ‘Meal Allowance’ was paid.

Additionally, if a night was spent overseas the crews were paid an ‘Overnight Allowance’. All allowances were the same for Technical (flight) and Cabin Crew, except for the ‘Overnight’ allowances where the Captain got a little extra to cover tips, porterage, etc., in local currency. In those days the overseas meal and overnight allowances were frugally saved by many Sri Lankan crew members and encashed into rupees in Colombo in order to supplement their take-home pay.

Even during Air Ceylon days, the Internal Auditor didn’t understand the concept of per diem payments based on meal times, and commented that crews were not entitled to meal allowances when flying as they were provided with meals on board. It took the Air Ceylon Pilots’ Guild quite an effort to counteract that notion.

Increasing flight crew salaries to present levels was the result of a long, hard struggle for the Airline Pilots’ Guild, as Air Lanka was truly ‘international’, with expatriate crew members on its payroll too. In the mixed (Sri Lankan and expatriate) crews, a ‘national’, or local, Captain earned far less than an expatriate First Officer or Flight Engineer, who also received free housing and children’s education fees as part of their remuneration packages.

Yet the Captain, whether a Sri Lankan or an expat’, was the most senior crew member in the aircraft. Further to regular appeals to Air Lanka Management, in due course the salaries were adjusted to a great extent and tied to the constantly appreciating US dollar, so as to eliminate the salary gap between nationals and expatriates. The Pilots’ Guild also managed to secure duty free car import/purchase permits for its members, in keeping with certain other professions at that time.

In accordance with the then Sri Lankan tax laws, while an expatriate’s salary was tax free, a national captain had to pay income tax amounting to around 40% of earnings. Again, after many appeals from the Pilots’ Guild, Air Lanka management agreed to pay flight crews’ income tax, which was then considered a perquisite by the Government Income Tax Department, and necessitated the airline management paying ‘tax-on-tax’. This was done to prevent pilots leaving the company for better jobs in other parts of the world.

So why is an airline pilot is paid so much?

Let me give you a few reasons. An airline pilot must undergo an annual medical examination up to the age of 40, and then regular biannual medicals until the age of 60. From then until age 65 additional blood tests and stress EKG tests are conducted. While pilots need not be as fit as astronauts, there cannot be any disqualifications either. Unfortunately, the limits of these tests are quite subjective and could be a source of worry and stress to individual pilots. Needless to say, pilots must practise self-discipline to maintain these medical standards.

The training regime to become a commercial pilot is long and extensive. There are as many as 14 theory exams to pass, along with numerous practical tests where competency has to be demonstrated to an examiner and recorded for licensing purposes. The pilot needs to qualify for: a ‘Type Rating’ to fly a particular type of aircraft; an Instrument Rating to enable himself/herself to fly solely with reference to instruments at night-time or in conditions of limited or non-existent visibility; a ‘Multi-engine Rating’ authorising him/her to fly an aircraft with more than one engine. They must also be current on Safety Equipment Procedures, which involve going down emergency slides into a pool or tank of water, and survival in case of a ditching at sea.

Even after obtaining the requisite licence and ratings and joining an airline, every six months a pilot must submit to a practical test conducted by a Civil Aviation Authority Sri Lanka (CAASL)-designated examiner in order to demonstrate continuing competency. Throughout his/her career, every year the pilot must also satisfy a company-designated ‘Line Examiner’ that he/she is up to date on all company procedures and instructions. The pilot could be failed and given re-enforcement/consolidation training at any time.

In contrast, not many vocations, including the medical profession, have such systems in place for rigorously and regularly monitoring and recording competency and proficiency. Sadly, such testing can be subjective by nature, and is sometimes used by airline companies the world over to force pilot employees to ‘fall in line’ and not rock the boat. But that’s another story.

The demand for qualified and experienced pilots around the world is high, especially as airlines are bouncing back after the pandemic. Therefore, Sri Lanka’s national carrier must find incentives in pay and conditions to keep experienced pilots within their fold. Losing experienced pilots to a ‘brain drain’ will affect the airline’s safety record in the long run. Airline Captains cannot be produced overnight. It takes at least six years on average for a good First Officer (FO) to become a Captain. That gives the FO experience to fly through all the seasons of spring, summer, autumn and winter weather, by day and night, at least six times under the watchful eye of an experienced Captain, before the FO goes out on his/her own. Not unlike a ‘House Officer’ in the medical profession, who learns what to do, as well as what not to, to enhance his/her ability to work with others in a ‘team’ environment.

Commercial airline pilot training is expensive, with ever-rising costs of equipment and fuel. Unless the trainee is sponsored by an airline, or has wealthy parents, many student pilots will incur debt. It is not unknown for some not so well-to-do parents to even mortgage their property to put their children through flight school. Yet at the end of it all one is still not sure of securing an airline job because even in the ranks of prospective flight cadets, many are called but only a few are chosen for further training by the airlines.

It is no secret that an airline pilot’s work is unique and different from a regular 9 to 5 job. Flying duties take pilots far from home, while they miss out on family events such as birthdays, weddings and funerals of near and dear ones. It is very hard on the pilot’s spouse as he/she has to be both father and mother, nursemaid, and chauffeur, especially when children fall ill. Airline pilots have to be mentally prepared for such events, and free of financial worries and stress that can cloud judgement and decision-making when performing flying duties and functions that are stressful in their own right. It must be remembered that apart from being responsible for hundreds of lives, an airline pilot is in charge of and responsible for airline assets costing hundreds of millions of dollars, leaving no margin for error; as distinct from a run-of-the-mill administration job which, according to some, allows for as much as a 50% error margin.

An airline pilot has to be trained and tested regularly in a flight simulator or an actual aircraft to safely handle emergency situations such as engine failures or fires on take-off, rejected take-offs, emergency landings with hydraulic failure, cabin pressure failure, and many other potentially perilous situations. A wrong decision will be very costly for the airline, and could even make the company go ‘belly up’.

There is a famous saying among aviators which is attributed to Jerome Lederer, the then President of the Flight Safety Foundation. He stated: “If you think that safety is expensive, try having an accident.”

That also brings to mind what Lee Kuan Yew, widely acknowledged as the ‘founding father’ of modern Singapore, said: “If you pay peanuts, you get monkeys.”

In 1776, the Scottish economist and moral philosopher Adam Smith wrote a book called ‘The Wealth of Nations’. In it he outlined five principles underlying why labour rates are different. They are still valid today. I quote:

“The Variation of Labour Rates

There are five major factors that explain why labour wages differ from one occupation to the next. To begin, labour rates differ depending on how simple or difficult the job is. A tailor, for example, is paid less than a weaver. His job is much easier. Weavers earn less than smiths. The most despised of all jobs, public executioner, is paid more than almost any other common profession in proportion to the amount of labour done.

Second, the ease and low cost of learning a new business, as well as the difficulty and cost of doing so, affect labour salaries.

Third, salaries in professions differ because some crafts have significantly more consistent employment than others.

Fourth, labour wages vary according to the amount of trust that must be placed in the workers. Goldsmiths and jewellers are always paid more than many other workers because they are entrusted with valuable materials.

Fifth, labour remuneration varies according to the likelihood or improbability of success. If 20 people apply for a job and only one is hired, the one hired is usually paid the sum of the salaries of the other 20.”

In addition, Smith states a few more home truths, such as:

“Give me what I want, and I’ll give you what you want.”

and

“A man must always be able to support himself through his job, and his earnings must be sufficient.”

Many airline administrators take Aviation Safety for granted. It does not happen automatically but with hard work put in by the people in the front line, such as pilots, engineers and mechanics. Unfortunately, aircraft can’t fly without pilots and engineers. In the love/hate relationship between the Sri Lankan Airline Pilots’ Guild and airline management, the usual cycle of events since inception is as follows.

The Board of Management appointed by the ‘powers that be’ consist of government cronies who confess to the airline employees that they know nothing about running the airline and ask for guidance. The unions, including the Pilots’ Guild, give them support and guidance. After a few months the Board members believe they have learned all they need to know, and try to ride roughshod over the unions while trying to control traditional behaviour despite really knowing nothing. It is a truism that ‘a little knowledge is a dangerous thing’. The pilots are considered ‘a necessary evil.’

Speaking for the pilots at the ‘pointy end’ of the aeroplane, they see the product of that ‘board management’ at its worst and best. The communication channels should be kept open with the Chairman and his Board of Directors. From what I gather, and in aviation terms, there is “a loss of com” between them.When the COVDI-19 pandemic began, the present Board of SriLankan Airlines unilaterally reduced pilots’ salaries by almost 50%, put a cap on the dollar conversion rate, and told pilots that if they didn’t like it that they could go look for jobs elsewhere. The Pilots’ Guild went to the Labour Commission, who discovered that the airline’s management had short-changed the pilots to the extent of Rupees 1.928 billion! It is obvious that management should not look at the bottom line only but follow a Safety Management System which ensures resilience.

Now other airlines are hiring again, and 130 Sri Lankan pilots have applied to convert (validate) their Sri Lankan ICAO (International Civil Aviation Organisation)-recognised Air Transport Pilots’ Licence (ATPL) in other countries to be able to work there. More than 40 local pilots are expected to leave for other reputed airlines by February 2023. If that occurs, it will become a national crisis. This attrition will in turn cause disruption of scheduled flights in the short term, or the airline might even cease operations in the long term. It has happened to other airlines. Sri Lanka is not and will not be immune. Yet, SriLankan Airlines’ Board of Directors seem to be blissfully oblivious of this fact.

With the proposed national Income Tax reforms, the quantum of income tax is going to be higher. Could the Board of Directors of SriLankan Airlines consider income tax payments and pay tax-on-tax where pilots are concerned, as has been done before? They can ill afford to hire expatriate pilots at ‘exorbitant’ dollar rates, as in the past. Or by ‘sitting on their hands’ would the Directors force national airline pilots to leave for greener pastures abroad, along with Sri Lankans in many other valued and respected professions?

All News Advertisement

Opinion

Could Sri Lanka once again face an economic crisis similar to 2022?

Published

19 hours ago

2026/06/9

Sahan Weerasooriya

This article examines whether Sri Lanka faces the risk of once again moving towards a situation similar to the 2022 economic crisis. The 2022 crisis was not the result of a single cause, but a multidimensional crisis created by the combined effects of fiscal weaknesses, foreign exchange shortages, debt burdens, policy mistakes, and the weakening of the productive economy. Although foreign exchange reserves, the exchange rate, and the fiscal position have now stabilized to some extent, that stability remains fragile.

The continuity of the IMF programme, debt sustainability, investor confidence, and policy discipline are decisive factors in this regard. At the same time, poverty, the quality of employment, pressures on the SME sector, price levels, and income inequalities remain serious socio-economic challenges. Therefore, while it may not be accurate to say that the 2022 crisis will immediately recur, abandoning the reform path and failing to correct structural weaknesses could once again push Sri Lanka towards a crisis-prone path.

Recently, the Chief Executive Officer of the Advocata Institute issued an important warning regarding Sri Lanka’s economic future. That statement also received wide attention across various media platforms. His central argument was that if Sri Lanka moves away from the current path of economic reforms, there is a risk that a situation similar to the severe economic crisis experienced in 2022 could re-emerge.

This statement cannot be dismissed merely as a political or ideological remark. It is an important warning that deserves deeper consideration in relation to the country’s economic stability, policy continuity, and the future of the reform process. Therefore, the purpose of this note is to examine the strength and validity of that statement through selected macroeconomic indicators and structural economic factors.

A particularly important point to remember is that the 2022 economic crisis was not caused by a single factor or a single policy mistake. It was a complex economic crisis created by the accumulation of fiscal imbalances, excessive debt, foreign exchange shortages, weak export and investment growth, the decline of the productive economy, policy uncertainty, and weak institutional governance over many years.

Therefore, in assessing whether Sri Lanka could once again move towards such a situation, it is not sufficient to rely on a single indicator or a short-term trend. Instead, it is essential to consider a broad macroeconomic range, including the fiscal position, foreign exchange reserves, debt sustainability, investment and export performance, unemployment, poverty levels, the condition of small and medium-sized enterprises, price levels, interest rates, and the overall path of economic growth.

Our main question should not be whether the 2022 crisis will return tomorrow. The more important question is whether the fundamental structural weaknesses that caused that crisis have truly been corrected, or whether they have only been temporarily managed. Sri Lanka’s economic future will be determined by the answer to this question.

1. Foreign Exchange Reserves

By early 2022, Sri Lanka’s usable foreign exchange reserves had fallen to extremely low levels, making even payments for fuel, medicine, and other essential imports a serious challenge.

At present, foreign exchange reserves have recovered significantly, providing a stronger protective buffer compared with the situation in 2022. However, this stability could once again be weakened by a breakdown in the continuity of the IMF programme, a slowdown in foreign direct investment flows, a decline in tourism earnings or remittances, or disruptions to the debt restructuring process.

2. Exchange Rate Stability

In 2022, the rapid depreciation of the rupee was a major factor that increased import prices, production costs, and the cost of living.

Today, the exchange rate shows relative stability, but that stability depends on foreign exchange inflows, market confidence, and policy credibility. Therefore, if the IMF programme is disrupted, foreign exchange earnings decline, or investor confidence weakens, the rupee could once again come under severe pressure.

3. Fiscal Position

Among the root causes of the 2022 crisis were the collapse of government revenue, dependence on excessive borrowing, and the long-term weakening of fiscal discipline.

Under the IMF programme, the fiscal position has been strengthened to some extent through increased tax revenue and expenditure control. However, reversing tax reforms for political popularity, failing to reform loss-making state-owned enterprises, or losing control over public expenditure could once again widen fiscal imbalances.

4. Debt Sustainability

In 2022, Sri Lanka was forced to suspend external debt servicing for the first time in its history.

Although the debt restructuring process has now made considerable progress, debt sustainability depends on continuous economic growth, maintaining a primary budget surplus, and policy discipline. If these conditions weaken, concerns over debt stability could re-emerge.

5. Employment Conditions

Although the official unemployment rate appears to be under some control, problems relating to the quality of the labour market remain unresolved.

Many people have moved into low-income informal employment, while the shortage of employment opportunities among educated youth remains significant. In addition, the migration of skilled and educated workers has placed pressure on the country’s human capital and long-term productive capacity.

6. Poverty and Living Standards

With the 2022 crisis, poverty increased significantly. Although inflation has declined, the cost of living still remains a heavy burden for many families.

A large number of households continue to struggle to meet expenses related to food, transport, education, and health. Therefore, it is still difficult to say that the benefits of macroeconomic stability have adequately reached lower- and middle-income groups.

7. Small and Medium-Sized Enterprises

SMEs, which are a central source of employment and income generation in Sri Lanka, were severely affected by the crisis.

High interest rates, energy costs, raw material prices, and weak consumer demand forced many enterprises to close down, downsize, or become burdened with debt. The pace of economic recovery will depend heavily on the revival of this sector.

8. Weakness of the Productive Economy

A deeper structural cause of the 2022 crisis was the limited base of Sri Lanka’s productive economy.

Even today, the country remains heavily dependent on tourism earnings, remittances, and the services sector. High value-added industries, technology exports, knowledge-based services, and innovation-driven sectors have not grown at the expected pace. Without a structural transformation of the economy, long-term stability cannot be guaranteed.

9. Income and Distributional Inequalities

Although some economic groups recovered quickly after the crisis, a large section of the population has still not escaped economic pressure.

The gap between urban and rural areas, as well as between high- and low-income groups, appears to have widened. If the benefits of economic growth are not distributed more broadly, macroeconomic stability will not translate into social and political stability.

10. Price Levels and Inflation

Inflation has declined, but people are still facing price levels that have already risen and become entrenched.

A decline in inflation does not mean a decline in prices. If income growth does not keep pace with price levels, the real purchasing power and living standards of households will remain weak.

11. Interest Rates and Investment

Although interest rates have declined, private investment and new business activity have not yet grown at the expected pace.

Investment decisions are influenced not only by interest rates, but also by policy stability, legal clarity, the protection of property rights, market expectations, and investor confidence. Therefore, sustained investment growth requires broader institutional and policy stability.

12. What Could Happen If IMF Conditions Are Not Implemented?

The IMF programme is not merely a loan facility. It is a key foundation of the confidence that the international financial community places in Sri Lanka’s economic policies.

programme breaks down:

* IMF disbursements could be suspended.

* Support from development partners, including the World Bank and the Asian Development Bank, could weaken.

* Confidence among creditors and international markets could deteriorate.

* Foreign direct investment could slow down.

* Pressure on the rupee could increase.

* Interest rates could rise.

* Inflation could accelerate again.

* Fiscal crises could re-emerge.

* Economic growth could slow down.

* Jobs, incomes, and living standards could be adversely affected.

This does not mean that Sri Lanka would return to the 2022 situation overnight. However, it could gradually weaken the protective buffers required for economic stability and significantly increase the risk of the country being drawn back into a crisis-prone path.

by Prof. Ranjith Bandara, PhD (Qld.,)

Opinion

Beware of Yanks bearing gifts

Published

2 days ago

2026/06/8

Thilina Walpola

Helicopters from the US. (Pic courtesy SLAF)

The US Government has gifted 10 Bell 206, Sea Ranger Helicopters to the SLAF for Training and Humanitarian Assistance and Disaster Relief (HADR) purposes. The full specifications are as follows.

Contractor:

Bell Helicopter Textron
Date Deployed: First flight: 1961; Operational: 1968
Propulsion: One Allison 250-C20BJ turbofan engine
Length: Fuselage – 31 feet (9.44 meters); Rotors turning – 39 feet (11.9 meters)
Height: 10 feet (3.04 meters)
Rotor Diameter: 35 feet 4 inches (10.78 meters)
Weight: 1595 pounds (725kg) empty, 3200 pounds (1455 kg) maximum take-off
Airspeed: 138 miles (222 km) per hour maximum; 117 miles (188 km) per hour cruising
Ceiling: 18,900 feet (5,761 meters)
Range: 368 nautical miles (420 statute miles, 676 km)
Crew: One pilot, four students

While they are good for training, I have my serious doubts whether these helicopters are ideal for HADR. As they have only a single engine and They can’t even operate into high rise helipads in hospitals and hotels in Colombo. The law requires twin engine helicopters! What happens if there is an engine failure while operating over the sea or in a mountainous area? There will be hell to pay!

Three twin engine versions would have been better.

How many helicopter pilots does the SLAF require anyway?

Will we be stuck with junk? Like two Russian KA -26’s during the Sirimavo Government and French Aerospatiale Dauphins SLAF acquired. which were not ‘tropicalised’, during the JRJ Government.

Will the Sea Ranger Spares support be available, free of charge?

I doubt it.

There will also be other Geopolitical strings attached. There is no such thing as a free lunch.

Guwan Seeya

Opinion

Will AI kill solar and wind energy?

Published

2 days ago

2026/06/8

Thilina Walpola

Global warming policies were expected to drive a rapid shift toward a renewables-based energy system dominated by wind and solar. While growth in these sources did occur, it has not matched the pace that was widely anticipated. In the United States, the rise of cheap and abundant shale natural gas significantly reshaped the energy mix, displacing coal and limiting the relative share of wind and solar in electricity generation. In China and India, the situation has been different.

Coal remains dominant because it is widely available domestically, while natural gas is more limited or expensive to secure at scale. As a result, coal has retained its central role in both countries’ power systems. Solar and wind always provide intermittent, variable power. It was widely assumed that a cost-effective, utility-scale electricity storage solution would emerge to solve this problem, but that has not yet happened at the scale originally expected. In the pre-AI era, solar and wind were typically integrated into power systems alongside more reliable sources such as coal, natural gas, and nuclear energy.

For example, if the sun was shining on a Monday, electricity demand could be met largely by solar power during the day. At night, coal, natural gas, or nuclear plants would supply the required electricity. If the following Tuesday was cloudy or gloomy, generation would shift back toward coal, gas, or nuclear to maintain supply. AI introduces a new and more demanding challenge. AI data centers require continuous, high-quality, always-on electricity, which solar and wind alone struggle to guarantee without large-scale storage or back-up systems. In addition, they require very large amounts of power.

As a result, the AI industry is now actively searching for new and expanded sources of reliable electricity. One of the major challenges in powering AI systems is electricity transmission. High-voltage transmission lines are expensive, slow to build, and often face regulatory and land-use constraints. As a result, some companies are exploring more localized power solutions, sometimes referred to as microgrids. These are self-contained energy systems that can operate independently from the main electricity grid. Technologies such as small modular nuclear reactors are an example of such microgrids.

In such isolated systems, the focus is on highly reliable, always available power generated close to the point of use. In this context, solar and wind are expected to play a limited role because their output is variable and depends on weather conditions, making them less suited as primary sources in fully self-contained AI-focused microgrids. The pace of AI infrastructure development is extremely rapid in both the United States and China. AI systems are widely seen as transformative technologies that promise significant new wealth creation, which is driving aggressive and sustained investment. As a result, development is moving quickly, without waiting for long-term solutions such as large-scale energy storage to mature alongside renewable energy systems.

In this environment, electricity demand is rising faster than new infrastructure can be built. In the United States, this reinforces the role of natural gas as the dominant source of reliable power. In China and India, where coal remains more established and readily available, it is likely to continue playing a central role in meeting growing demand. In India, AI data centers have not yet been built at the scale seen in the United States and China. When India does reach that stage, it will need to supply large amounts of reliable electricity. India has placed strong emphasis on solar energy in particular and has had some success in meeting the needs of ordinary consumers through renewable expansion. However, the key question is what choices will be made when large-scale AI data centers begin to arrive.

Will India rely more on coal generation, which is relatively cheap, widely available, and highly reliable, or on solar power, which is intermittent, variable, and often more expensive when reliability is taken into account? My view is that India is more likely to turn to coal to meet this demand, given its existing infrastructure and the need for dependable electricity supply. Then there is an overall question. Solar and wind were already struggling in the pre-AI days to displace coal and natural gas at the system level, despite strong expectations that they would become dominant sources of electricity. Now that AI is here and electricity demand is rising rapidly, will they push solar and wind further behind in the energy mix? (The Statesman)

(The writer is an expert on energy and contributes regularly to publications in India and overseas.)

by SUNIL SHARAN