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The personal touch
As Dubai involves itself in ever larger, and more diverse international deals, it is nice to be reminded that not every deal is based on hard cash and bottom lines. We’re told Sri Lanka’s decision to revoke the work permit of its national carrier’s CEO – a guy out in place by Emirates – will have an “extremely negative” impact on talks with Emirates over the renewal the contract to run the airline.
Never underestimate the power of the personal relationship, particularly, according to the Financial Times, when as many as 70 percent of businesses, either private or listed, are family controlled. Forty per cent of the Fortune 500 companies still under family control.
According to reports, the Sri Lanka government took the hump with Peter Hill after he reportedly refused to bump passengers off a flight from London to Colombo to make way for the island’s president and his entourage. It withdrew his work permit on December 19. The move is not likely to help relations as the two sides discuss an extension to their current deal. Hill had previous said the talks were dragging.
The upside of a personal relationship, or attachment to a business, is often long term thinking, or at least a willingness to stick to the path during tough times. The flipside is personal disputes are often harder to resolve. Disagreements between the members of the Bancroft family are widely seen as having created an opening for Rupert Murdoch to make his $5bn bid for Dow Jones, owners of the Wall Street Journal.
It may turn out that Peter Hill’s actions (and words) are part of Emirates’ bargaining strategy.
2 comments:
Well, if Emirates decides to drop its support for Sri Lankan airlines over this, it will show that Sri Lankan officials playing the people game lose out big time economically in the end. If this report is true as you give it, big kudos to the CEO who stood up to presidential showmanship. Why should passengers on a flight, some of whom probably paid top dollar for first or business class tickets, be bumped off a flight so a president can try to impress his cronies? Again kudos to the CEO, and hopefully the people game will have backfired for SLA.
Just imagine this war torn, cash-strapped county losing the affiliation of its airline with one of the most successful airline brands today, just because the country's president got insulted for trying to pull off a number. It shows you why some countries stay in the rut they are in.
By the way, the president has his own airline now--Mihin Lanka--so he probably couldn't care less what happens to Sri Lankan airlines. Meanwhile, the country continues to tank economically.
Peter Hill "reportedly refused to bump passengers off a flight from London to Colombo to make way for the island’s president and his entourage"? Full marks for Peter, Bridget likes a guy who refuses to be intimidated by 'power'!
Thanks for the info Clinton, I didn't know that such a relatively high percentage of Fortune companies were family owned.
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