Will PIA take off?: A new plan

Published Sep 12, 2013 06:41am

PRIME Minister Nawaz Sharif is not very happy with the performance of the national flag carrier. In fact, no one is. It has been quite a while since PIA has done anything to bring a smile to the faces of those who travel by it or the taxpayers who pay for its losses and staff salaries. The airline has been on the decline for the last several years. The decay has, however, been more rapid in recent years with the company’s losses shooting from Rs18bn in 2011 to almost Rs40bn this year. Corruption, mismanagement, an aging fleet, and, more importantly, political and bureaucratic interference in its affairs are but a few factors that have contributed to the deterioration of the airline that was once the country’s pride. The attempts, however lackadaisical, by the previous government to reform the company failed because of stiff resistance from the unions. Those at the helm of affairs also did not appear very bothered about revamping the airline owing to the financial and political costs involved; instead, they opted for firefighting measures to keep it afloat like the other state-owned enterprises.

The present government appears more determined to revive the company. The loan agreement it has signed with the IMF also pledges to rescue, restructure and partially privatise the airline along with other state-owned businesses. A medium-term plan to restructure the company is being developed, which will strip it of its liabilities and shift them to a separate company — PIA2 — by the end of this calendar year. It is expected that the government will pay off the airline’s loans and retain only those liabilities it can ser-vice. The proposed plan also envisages an equity injection in the company and the launch of a voluntary handshake to shed its excessive staff and transfer of 26pc shares to strategic buyers by the end of the present fiscal year. On the whole the plan appears ‘doable’. But its success will largely hinge on its transparent and honest implementation.

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Comments (4) (Closed)


IBN-E-ASHFAQUE
Sep 12, 2013 09:24am

I like the statement, "On the whole the plan appears ‘doable’. But its success will largely hinge on its transparent and honest implementation". This is really a plan to squeeze the last drop from stone. Only the bones are left of PIA, so the new democratic government is trying to squeeze whatever it can by creating PIA2, after all they have got a heavy mandate from the country. Long live democracy.

Nizamuddin Ali Ahmad
Sep 12, 2013 07:30pm

Please run the company like any enterprise for profit. Do not sell the company to one of your cronies. Make it profitable and then sell on bid Basis. PIA is flag carrier and works as a carrier to transport soldiers and supplies in case of emergencies and war.

Shehz
Sep 12, 2013 07:58pm

Incorporating a new PIA is not going to solve the situation, but will continue tw-folds when the next government comes in (yet again?).

The members of the previous government went on to incorporate a private airline and compete against PIA by damaging PIA - trying to sell lucrative air corridors to foreign airlines. Example PIA flights from Karachi to Bangkok were always almost full, yet PIA stopped operating that sector, was sold to Thai. It was a deliberate action.

Then they went to procure aircrafts and the companies refused them. The next plan of action was to absorb PIA aircrafts, hence, they employed immoral employees whose only task was to hurt PIA - ensure that the fleet was always never maintenance-free. Technical problems here and engine problems there became a norm soon after, causing huge delays and incurring costs.

Many rudeelements were employed as ground staff, who had a PhD in bad customer service. Needless barriers they were creating at the Karachi airport, making their own laws and policies, driving passenger traffic to the competitors. Only reason was to incur losses for PIA, so as to when a new airline comes into the market they will capture that share.

Now the new government wants to incorporate PIA2, without removing the ill-elements? They have to root out the evil and lay them off first, and ensure that those names are red flagged in the operations and human resources database. Those elements have now been employed in PIA for 3-5 years and are unionized, hence, the government will have to go to courts against the union if they wish to fire these unwanted elements.

None of the above is a secret, the entire PIA management and staff are aware of this situation. So the question is, who will bell the cat? PIA2 is not a sustainable solution really without first cleaning up the mess.

Mir
Sep 12, 2013 10:45pm

This is a wishfull thinking,only visibal solution is to close PIA.start a new airline without any pressure from political sponsored employment.