January 3, 2003	Friday	Shawwal 29, 1423

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ISLAMABAD, Jan 2: The Pakistan International Airlines Corporation (PIAC) has finalised a 10-year marketing and rejuvenating plan to improve functioning of the national carrier at all levels.

“Currently, we are working under a constraint of large number of employees which needs to be thinned gradually,” said PIA Managing Director Chaudhry Ahmad Saeed.

He told Dawn here on Saturday that it was difficult to immediately retrench the huge workforce which had been inducted during the last 20 years by successive governments on political considerations.

“We have to offer some kind of golden handshake to those employees who cannot contribute in any way and, at the same time, induct 200 MBAs and IT specialists, for which a process has just begun,” he added.

Every year, he pointed out, at least 800 to 1,000 PIA employees would have to be laid off and 200 new qualified people would be inducted to run PIA on commercial lines.

Through an attrition plan, Ahmad Saeed said, 5,000 employees were expected to be offered the golden handshake or to be laid off to bring the total strength of workers to 13,050.

“Then we plan to outsource non-core activities like flight kitchen, transport and TGS departments,” the PIA managing director said.

Cash flow of the corporation, he said, had improved and that was why employees had been given bonuses of Rs4 billion last year.

He regretted that the previous governments had inducted people in PIA without any qualification or merit. “A part of the problem is that those who were given jobs on political considerations cannot be trained as they don’t know any thing,” he said, adding that a big number of people had been offered jobs in the past without any vacancy. “I tell you, that was a disaster for PIA; this is not an easy task to remove roughly about 7,000 employees from the organisation,” he added.

The managing director disclosed that the ban on unions in PIA was likely to be lifted soon, and expressed the hope that this action would not stop him (MD) from invigorating the corporation.

The financial health of PIA was so bad previously that the employees could not get their salaries in May 2001, as the corporation had faced a loss of Rs2 billion in that year, he said and added: “But then we took some cost cutting measures, improved flights’ schedule and improved reservation system, that gave us a Rs400 million profit in July 2002”.

“And we will have around Rs2.4 billion profit for 2002,” he said and expressed the hope that the corporation would continue to receive all possible support from the government to improve the PIAC.

In reply to a question, he said Rs15 billion Term Finance Certificates (TFCs), issued on behalf of PIA with the government guarantee, had proved to be a very good experience. So far, he said, Rs8 billion TFCs had been sold to commercial banks while that of Rs3billion were being sold to Bank Al-Falah and Rs2.5 billion were being invested in the PIA provident fund. The remaining TFCs of Rs1.5 billion would also be invested in certain profitable ventures.

In reply to another question, the managing director said the government would provide $150 million to PIA for purchasing new aircrafts. “In fact the government has already extended $30 million to us while the remaining two installments (each of $60 million) would be given to PIA in 2003 and 2004”.

“The US Exim Bank will extend 85 per cent guarantee for financing the aircrafts,” he said, adding that the government was expecting Rs3.5 billion profit in 2003 from PIA.

He said eight aircrafts would be purchased— included three Boeing 777-200 ER, two Boeing 777-200 LR and three Boeing 777-300 ER.

The managing director, defending the decision on purchase, said: “The selection of planes were done by a high-level committee whose members enjoy good reputation as being highly professional and honest”. The purchase of Boeing 777 was a unanimous decision of the PIA board, he added.