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Perspective Musings

Air pockets ahead

Updated 13 Dec, 2016 02:12pm
Illustration by Marium Ali
Illustration by Marium Ali

Cumulative losses of Pakistan International Airlines (PIA), which is 87 per cent government-owned, were 76 billion rupees in 2013-2014 and were expected to continue into 2015, despite a sharp fall in the price of oil. The airline is rated poorly (never mind its glorious past) on customer care, in-flight service and timeliness. Given the open skies policy, international travellers using Pakistani destinations have a choice of Qatar Airways, Etihad Airways, Turkish Airlines, Emirates and Thai Airways. They notice the difference in service quality and have since deserted PIA.

Is privatisation the solution to PIA’s ills? Let’s look at the competition: Qatar, Etihad and Emirates are among the world’s top 10 airlines according to consumer satisfaction surveys and are all government-owned. Thai Airways (ranked 19 in the world) is also majority-owned by the government.

Turkish Airlines, on the other hand, was 87 per cent government-owned in the mid-2000s and was in the doldrums. The government reduced its share to 49 per cent, brought in professional management and saw a huge growth in operations. From 2004 till 2014, aircrafts increased from 73 to 261, destinations from 102 to 264, passengers from 12 million to 55 million, net profit quadrupled and, most importantly, technical staff increased by 2,000. (Take note, PIA labour unions.)

The common factor among all these well-run airlines is a professional management targeting the global tourism and business markets. The resource-rich, labour-scarce owners of Qatar, Etihad and Emirates have mastered the art of hiring professional management to produce goods and services that meet world standards, be they hotels, ports, shopping malls or airlines. Thailand sees Thai Airways as a vital input into its unmatched global tourism industry. The turnaround of Turkish Airlines was the result of the decision to integrate Turkey into the world economy via trade, investment and tourism. Privatising PIA will certainly help stem the rot because of greater transparency and more accountable management that our government owned companies find a challenge to institute. Karachi Electric Supply Company (KESC) and the telecommunications sector are good examples of progress after privatisation. But if we truly want PIA to be a flagship carrier we are proud of, we have to make Pakistan a hub of global economy and not a playground of protected local monopolies, free-riding officials and jet-setting jihadists.


This was originally published in Herald's Annual 2016 issue. To read more, subscribe to Herald in print.