PIA and privatisation

Published Oct 09, 2013 07:02am

ANYONE who has ever studied basic economics knows that in a competitive environment state-owned enterprises (SOEs) do not and cannot work.

Besides a few exceptions, almost all SOEs will be a drain on taxpayers no matter how much downsizing or rightsizing is done to correct their trajectory.

Pakistan International Airlines is a state-owned enterprise involved in the aviation business. The aviation business is notorious for being profitable for everyone associated with an airline except the airline itself.

The sooner our government extracts itself from this sector the better it is for everyone, especially the taxpayers.

Opponents of privatisation say that the airline is our national asset and should not be sold. According to my understanding, an asset is something which gives a return or increases in value over time.

In the case of PIA, its value is depreciating and it needs taxpayers - funded bailout on a yearly basis. In other words, it is more of a liability than an asset.

Fear of privatisation is basically a fear of the unknown, but the sooner PIA breaks the shackles of government control the better it will be for everyone. Having said that, it is essential that the sale is carried in a transparent manner and the taxpayers should get the most out of it.

PIA is a great organisation and the majority of its staff does not need to fear anything as they are capable of making PIA once again ‘Great people to fly with’.

HUSSAIN ZAMAN

Karachi


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Comments (3) Closed




Syed Husain
Oct 09, 2013 02:04pm

"it is essential that the sale is carried in a transparent manner and ......". Please put on your thinking hat and then let all of us know when was anything of substance done in Pakistan in a transparent manner?

Kamal
Oct 09, 2013 11:53pm

I do not agree with the writer. PIA was raised to its glory in public sector by capable people like Air Marshal Noor Khan, Enwer Jamal, etc. A few years ago Air India was under the threat of privatization but the Indian Parliament forced the government to take right measures. Ajit Singh, Indian Minister for Civil Aviation had announced in May 2013 that Air India will have a surplus of 1,040 crores in 2013-14 fiscal year. If Air India can be made profitable why can't PIA?

Kamal
Oct 09, 2013 11:47pm

I do not agree with the writer. PIA was raised to its glory in public sector by capable people like Air Marshal Noor Khan, Enwer Jamal, etc. A few years ago Air India was under the threat of privatization but the Indian Parliament forced the government to take right measures. Ajit Singh, Indian Minister for Civil Aviation had announced in May 2013 that Air India will have a surplus of 1,040 crores in 2013-14 fiscal year. If Air India can be made profitable why can't PIA?