PIA: A ‘dead product’ to sell?

Published November 19, 2014
A Pakistan International Airlines (PIA) plane prepares to take off at Alama Iqbal International Airport in Lahore - Reuters/File
A Pakistan International Airlines (PIA) plane prepares to take off at Alama Iqbal International Airport in Lahore - Reuters/File

The management of the national flag carrier Pakistan International Airlines (PIA) has been trying to retain a PR firm to rebrand its image since August, but in vain.

Image problems, however, should be the least of PIA's concerns. Its products and governance need an overhaul, which no PR maverick, even Don Draper of Mad Men, could provide.

Repeated ads have failed to entice a reputed PR firm, forcing the airlines to extend the deadline, yet again, by 10 days.

It is true that PIA's bad repute is a limiting factor. However, the real culprit is decades of poor management, which has delivered inferior products and services.

No matter how much PIA plans to spend on cosmetic fixes, unless the management is overhauled, there is no hope for the struggling airline.

Also read: Fuel-efficient planes, other cost cuts to improve PIA

PIA is running humongous losses. Earlier in November, PIA advised the Economic Coordination Committee of the Cabinet that the airline was running accumulated losses of 207 billion rupees (US$2.03 billion).

In 2013 alone, PIA lost an additional 44.5 billion rupees, the largest calendar-year loss ever. In 2010, the accumulated losses were fewer than 75 billion rupees. In a short span of four years, the losses have increased by 175 per cent. Whatever plans the government and the PIA management had put in place, all failed miserably.

Also read: PM expresses resolve to make PIA world's leading airline

PIA's creditors are losing patience. Pakistan State Oil (PSO) supplies fuel to the airline. It warned the airline publicly that unless it clears the outstanding debt of 12 billion rupees, PSO will stop providing fuel to PIA. Fuel stoppage would effectively ground the airline. The PIA's management committed to repaying 2 billion rupees in November to ensure continued fuel supply.

There is no dearth of smart individuals at well-reputed ad agencies. They can do the math for themselves. When they see PSO struggling to be paid, the PR firms know that the odds of being reimbursed for the services delivered in the future are no better than that of the PSO. No wonder then that the established PR firms are not responding to PIA's call.

With 18,000 employees and only a few dozen planes, PIA is one of the world's worst managed airlines.

Since PIA is a state-owned enterprise, every successive government has tried to operate the airlines as the ruling party's personal limo service. The wasteful use of services, exploitation of its resources by its staff, and the lack of accountability are some of the factors that have pushed the airline closer to the brink.

Also read: No decision yet to sell PIA shares, says PC chief

Being a public sector enterprise, PIA failed to resist successive governments who filled the airline's ranks with their loyalists. At the same time, the army of workers, whose services PIA has no use for, oppose any attempt to change the culture or to make the agency more competitive. In addition, opposition parties and PIA's employees oppose attempts for partial privatisation of the airline.

Somehow, PIA's 18,000 employees feel it's their God-given right to hold the 180 million Pakistanis hostage.

Why should the entire nation be collectively penalised to the order of 200 billion rupees for the failure of 18,000?

Successive governments have repeatedly appointed their favourites to the key management positions in PIA. The results have been obvious over the years where losses have ballooned with every passing year. At the same time, PIA's aircrew has embarrassed the airlines by trying to smuggle iPhones or turning up inebriated to fly the plane.

The government has tried to appease the powerful pilot's union by appointing pilots to management and leadership positions. This is a mistake. Pilots are skilled in flying planes, but not in managing complex organisations. In fact, pilots know as much about organisation behaviour and management as the railway engineers do. Yet, I hear no one asking to appoint a railway engineer to the MD office.

Also read: Overstaffed PIA hires PAF officers on high salaries

During my graduate studies in transport engineering at the University of Toronto, I took a course in airport and aviation management. Dr. Lloyd McCoomb, who headed the Greater Toronto Airport Authority (GTAA), taught the course. Dr. McCoomb's responsibilities included managing the Pearson Airport, Canada's largest airport with over 32 million annual enplaned-deplaned passengers. The course was at the cutting edge of airport and airline management. Such training should be mandatory for anyone aspiring to manage airports and airlines.

One big challenge in Pakistan is the lack of management experience required to run an airline or manage a busy airport. So poorly trained is the workforce that when the flights carrying relief goods for the 2005 earthquake victims started to arrive at the Islamabad airport, the air traffic controllers gridlocked the air and groundside operations. A crew from DHL was brought in to take over the operations.

If the government is at all serious about rescuing PIA and relieving taxpayers of the responsibility to bankroll the defaulting state-owned enterprises, it should bring in a team of experts from abroad whose experience matches that of Dr. McCoomb. Such talent does not exist in Pakistan; over two billion rupees in losses should be sufficient to recognise this point.

These experts should be given complete autonomy over operations. They should benchmark PIA's operations against comparable successful airlines. They would need to implement changes to stop the haemorrhage; it is naive to think of profits at this stage. PIA has to clear 200 billion rupees in losses before one could think of profits.

Also read: PIA: Better than the local bus?

A lot also depends on the superior courts. Without a doubt, laid off employees, whose positions have already been redundant for years, will challenge their dismissal in the courts. It is, therefore, incumbent upon the superior courts to consult with global experts in airline operations and management before passing judgements on this matter.

We should not forget that the workers' right to earn a living does not mean that we must condemn every state-owned enterprise to life-support, which cost billions to the taxpayers.



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