‘PIA has incurred more than Rs341bn in liabilities’

The Newspaper's Staff Reporter Published April 28, 2017

ISLAMABAD: Pakistan International Airlines (PIA) has incurred more than Rs341 billion foreign and local liabilities as of June 30, 2016, the airline’s finance manager told the National Assembly Standing Committee on Cabinet Secretariat on Thursday.

PIA Finance Manager Omar Bin Sadat told parliamentarians foreign liabilities stood at Rs71 billion and local liabilities are over 270 billion.

The committee met to ask the airline’s officials about the Federal Investigation Authority’s enquiries into alleged practices of corruption, discuss problems with dry and wet leases of aircrafts and the commercial restructuring of the national flag carrier.

However, senior officials from the PIA could not give satisfactory answers to the questions asked by members. Annoyed, the chairman of the committee, PML-N MNA Rana Mohammad Hayat Khan repeatedly raised his voice at the PIA officials for coming to the meeting unprepared.

“I have complained to the prime minister that the PIA is nothing more than a carrier of drugs,” MNA Khan said and asked why PIA officials did not have answers to the questions they were being asked.

He directed the secretary of the committee to lodge another complaint on behalf of the committee with the prime minister regarding the officials’ poor performance and not taking the meeting seriously.

PTI MNA Asad Omar was disappointed to learn no progress had been made during the last 12 months regarding the commercial restructuring of the PIA. “I have more information from last year on the restructuring of the PIA than the officials have now,” he said.

In his briefing, Civil Aviation Authority (CAA) Director General retired Air Marshal Asim Suleman said five international companies had expressed interest in operating PIA airports.

“These companies have extensive experience in operating both international and domestic airports. The CAA will keep regulatory control of the airports,” Mr Suleman said.

According to him, the National Aviation Policy 2015 provided an opportunity for the outsourcing of airports to world class airport operators of international standing through a transparent and competitive process. He maintained that the objective was to achieve better operability and enhanced efficiency at major airports.

He told the committee that the offer of the highest revenue share percentage will be considered.

“The CAA intends to hand over airport operations by June 2017,” he said.

Published in Dawn, April 28th, 2017

Pakistan

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Muhammad Murad Iqbal

Apr 28, 2017 09:51am

That is a colossal loss

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Sayed anawar

Apr 28, 2017 10:02am

PIA is nothing but liability for Pakistan. The airline is eating away all taxpayers money that was suppose to use for education, healthcare, food program for poor people. Foolish goat sacrifice is adding to the operational cost. Corruption and poor management are the poisons which is slowly killing PIA.

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khaled

Apr 28, 2017 10:08am

So why don't the concerned authorities declare the airline bankrupt and appoint liquidators as is normally done in such cases. Alternatively privatize it , instead of the airports which are earning profit. Why sell the egg laying hen? And what about security issues involved in selling the airports, are they not the same as selling the airline? the reason often given when PIA is not to be privatized.

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Hameed Kazakhstan

Apr 28, 2017 10:10am

A famous saying: "what is stupidity ? Repeating the same thing again and again and expecting different results" No need to discuss restructuring anymore simply privatize this white elephant as soon as possible. Discussing restructuring simply means they are looking for more corruption.

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Abe

Apr 28, 2017 10:20am

Since there's only talk of liabilities but not assets, it may ne fair to say PIA has a negative Net worth. I will buy PIA for $100, shut it down, fire everyone and liquidate it piece by piece, instead of throwing good tax payers money after the bad one. Time to call it end of the show.

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ali ahmed

Apr 28, 2017 10:24am

Another great achievement OF pml-n

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BULLZEYE

Apr 28, 2017 10:27am

Change PIA Airports to CAA Airports

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The end is near

Apr 28, 2017 10:33am

PIA's main problems are deeply-rooted corruption, mismanagement, Nepotism, incompetence and very Bad flight safety record. This criminal negligence have turned PIA airplanes into flying coffins. You have to solve these serious problems first in order to make PIA a profitable airline. Otherwise things will keep getting worse day by day.

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Nahrad Muni

Apr 28, 2017 10:35am

Please also include costs for sacrificial black goats in PIA loss. Thank you..

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criclover

Apr 28, 2017 11:00am

"In his briefing, Civil Aviation Authority (CAA) Director General retired Air Marshal Asim Suleman said five international companies had expressed interest in operating PIA airports." Are these airports owned by PIA? I guess PIA runs flights which are brought on leases of different types. CAA is the actual owner of all domestic airports from which it has been earning millions. If three large airports i.e Jinnah International Airport Karachi, Allama Iqbal Airport Lahore and Benazir Bhutto International Airports are leased out then CAA will start facing deficit. Thus there must be a strong justification for privatising these airports to any foreign company.

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Sarwar

Apr 28, 2017 12:18pm

We need to privatise this White Elephant, this should have been done two decades ago. Unfortunately for us the privatisation started from the wrong end of the spectrum i.e., education and health

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A Gujjar

Apr 28, 2017 12:21pm

Keep continue like Pak steel that's what you expect from any ruler of Pakistan, all are actors of Drama, NS,PTI and PPP, That's what I have experienced through out my life,

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MOHAMMAD

Apr 28, 2017 12:38pm

That's around 300 Million Euro.

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Mahmood

Apr 28, 2017 12:49pm

What a huge loss and insult to Pakistani tax-paying public. Considering that the German CEO, is costing the country 22000 Euros a month, yet he has done nothing to stem the flow of red ink.

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Shahid akram

Apr 28, 2017 01:08pm

No need to keep this airline anymore. so called national asset.

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bulesha

Apr 28, 2017 01:19pm

One more step towards out sourcing of operation to Chinese company.

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faraz

Apr 28, 2017 01:19pm

I think this is high time when tough decisions are required to be made. There is always solution to a problem and for PIA also there is a solution. We must address this issue as soon as possible. The way it is working is not a business model and it is very clear now. Solution must be implemented as soon as possible. Operational expenses are required to be reduced in order to increase revenue. Revamp is required and a good marketing campaign to bring up the name back in action again.

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Mahmood

Apr 28, 2017 01:25pm

Soon, we might even see PIA jets being seized by foreign creditors as the planes land anywhere outside Pakistan. No lender is going to continue to risk default or bankruptcy by PIA and getting wiped out of $ billions in debt owed. Time for the company to be shut down and liquidated. RIP.

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Sadaf

Apr 28, 2017 01:42pm

This government body is a complete failure. It should immediately file for bankruptcy and advise all potential passengers not to book. All their assets and planes should be sold off, after this they have to seek help from reputable airlines and foreign governments in how to build a successful national carrier. My mind does boggle though how an earth is it so mismanaged, they charge passengers from the UK,Europe and the US extortionate amounts to travel and the service is a complete disgrace. Finally the sacking of significant number of employees is also advised, and IF it resurfaces with a different name new employees should be taken onboard

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Sadaf

Apr 28, 2017 01:43pm

@Abe The most sensible answer to date

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ISHRAT SALIM

Apr 28, 2017 01:44pm

This is what democracy for the past 8 years has given us including unemployment, inadequate education, inadequate health, driving king water, sewerage problems, loss of export, FDIs and increase in corruption and governance issues.

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Azmeen

Apr 28, 2017 02:20pm

In spite of this terrible financial situation of PIA, political parties like PTI and PPP oppose its privatization to gain political mileage. Where is the national interest?

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Indian

Apr 28, 2017 02:35pm

@Mahmood Your CEO is actually underpaid by industry standards, 264,000 euro is very low for a CEO. In INR its hardly 1.85 crore, there are many senior managers/directors/VP earning more than this in India itself. Consider what his European counterparts are being paid then. CEO would be close to 5X if not 10x this amount (including profit sharing)

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saeed

Apr 28, 2017 03:21pm

please sell this airline

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Dr. Salaria, Aamir Ahmad

Apr 28, 2017 03:23pm

What a shame?

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Syed husain

Apr 28, 2017 03:50pm

Shut down the airline. Pakistan should not absorb the losses from PIA anymore.

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Muhammed Ali UK

Apr 28, 2017 04:04pm

Close down PIA, its a white elephant that is not worth the cost,it will never make money while these leaders are in power, so please stop the rot and get rid of it.

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Shakil

Apr 28, 2017 04:22pm

All our public corporations are overburdened with rising debts and therefore there must be some common factor operating somewhere in all of them. PIA owes 341 bn, electricity companies 400 bn, steel mills many billions and the list seems endless. The most outstanding cause appears to be that they are overburdened with politically appointed surplus staff. Another common denominator seems to be the theft of the product of such companies perpetrated by their own staff. For example, the electricity staff sells electricity privately (i.e. lets consumers steal for a consideration). Similar action must be going on in other corporations too. Why does the government not purge these corporations of all this corruption? Same was the case with PTCL until its administration was privatized.

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Jaffer Jan

Apr 28, 2017 04:24pm

Let me first clear the assumption that the foreign consultant/handling agents can resolve the problem of PIA and the CAA services. Pakistan has potentials in the aviation field that no other nation has in it. If unbiased thought is given by the Aviation Committee, they should search with country the retired management personals who bear abundance of long, untainted, excellent aviation industry experience that can help us bring PIA to its past glory and get it out of red, as far as financial part is concerned. These were the people who were deputed to several airlines in the Gulf to streamline and organise some carriers and converted them into world's top airlines. We should not overlook the services of the people who achieved PIA's logo"Great People To Fly With", possible. I have the names of such non corrupt and dedicated people with whom I had the privilege of working in PIA. So please do not waste our precious foreign exchange on foreigners who know just to talk and make money. Think about it.

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SAK

Apr 28, 2017 04:30pm

This money should be used for education, instead of paying fat salaries to PIA employees and free travel for there families. It is time to shutdown all dead entities funded by tax payers.

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Ali Vazir

Apr 28, 2017 07:15pm

Should we remain silent spectators at this loot and plunder of our national institutions? As told by Faisal Raza Abidi that PIA was a gift by our founding father to the nation. Nobody has the right to destroy and then sell it at throw away price. My dear silent majority speak up, raise your voice. One day you will find your streets, your area parks, your compounds, and even yourself sold to their masters.

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Naim Khan

Apr 30, 2017 03:16am

It's more than that, PIA staff at all the airports makes life very difficult for every passenger, PIA is the only airline you have to reconfirme your return seat, PIA is the only airline demands passport photo copies at the Pakistan airports, staff is rude, cabin crew is rude, food you don't want to eat, it's expensive, air hostesses are thieves, one got caught in Canada stealing, one in Paris this year. Now who is running PIA it's PMLN, PPP.

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