A NEW plan is in the offing to bifurcate PIA into two companies and sell one of them to an international party. The plan would split PIA’s sprawling operations into two — creating an airline on one hand, and putting ground operations such as hotels, catering and ground handling in a separate compartment. The airline can then be sold off, while the other operations could be consolidated for sale later.

This is, indeed, a novel idea and it should be given the space to succeed. Earlier efforts to privatise the state-owned airline have come to grief because of strident opposition from the labour unions who fear mass layoffs, and, reportedly, even from the Ministry of Defence which has large interests in the airline. The concerns of the labour unions are well understood, and layoffs at a time of high unemployment should be avoided to the extent possible.

But all other considerations for retaining the airline as a national asset have now been overshadowed by the sorry state of the carrier’s affairs for a number of years now. The fact that the airline has a workforce of 17,000 for a fleet of 36 aircraft, 10 of which are grounded, is evidence enough of its inefficiency. The accumulated losses, that had crossed Rs186bn when the plan was originally formulated in January, have left the airline with a debt burden of Rs276bn. This has made debt service one of its largest expenditure heads after operating costs.

Having come this far, and stoked the embers of expectation, the government must now see through the successful implementation of the plan. Retaining PIA as a national carrier no longer appears workable, and if a viable path exists to divest the airline without sparking mass layoffs, then the plan deserves a chance.

It is also worth noting that PIA would be amongst the first regional national airlines to be successfully privatised. However, it is equally important that mistakes of the past with regard to privatisation be avoided. Principal amongst these is wasting the proceeds. Since the government is intending to raise almost $4bn via its privatisation plan this year, it is crucial that we have thorough transparency on how those funds are utilised. The law requires them to be used for drawing down debt, not for financing the current account deficit. This must be ensured. Frittering away hard-fought gains has been a national failing for far too long now.

Published in Dawn, September 28th , 2014