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ISLAMABAD: The National Assembly was informed on Wednesday that the Pakistan International Airlines discontinued its Islamabad-New York flights after it could no longer afford Rs1.2 billion annual operational losses on the route.
During the question and answer session, Minister in charge of the Aviation Division Raja Mohammad Javed Ikhlas said in a written reply that flights to the US had been closed in November last year in line with the aviation industry’s practice.
He said the PIA had been rationalising its route network from time to time, closing loss-making routes and introducing additional flights on viable routes.
He informed the house that over the past five years, PIA closed eight routes — including Pakistan-US-Pakistan, Pakistan-Barcelona-Pakistan, Pakistan-Bradford-Pakistan, Pakistan-Hong Kong-Bangkok-Pakistan and Pakistan-Amsterdam-Frankfurt-Pakistan — after incurring heavy losses.
In another reply, the Aviation Division stated that PIA suffered Rs4,538bn losses till Dec 31, 2016. The 2017 accounts will be declared after their finalisation. According to the Aviation Division, some of the reasons for heavy losses were high fuel prices of over $100 per barrel in 2013-14, shortage of aircraft, navigation and other expenses and increase in salary of PIA employees.
The lawmakers disapproved the practice of offering free tickets to PIA staff after denying seats to revenue passengers and closing certain domestic routes. They also criticised the national flag carrier for selling Airbus A310 to a museum in Germany in violation of Public Procurement Regulatory Authority rules and PIA’s internal procedures.
Raja Ikhlas did not answer questions concerning accountability of PIA officials involved in sale of A310. “The German CEO, Bernd Hildenbrand, was removed after an inquiry and the Federal Investigation Agency is probing the matter to fix responsibility on other officials involved. A Senate committee has also been investigating to get to the bottom of the issue,” he said.
Published in Dawn, January 25th, 2018
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Comments (25) Closed
Jan 25, 2018 08:24am
I have no doubt, the downfall of PIA is due to incompetent management team and the way it's operational activities are planned and run by hand picked cronies of Nawaz Sharif. Remember, once, PIA was making profit and part of world's well known airlines, and used to train staff for Middle East airlines.
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Jan 25, 2018 08:30am
In fact contrary to what the honourable law makers are stating, PIA as a policy only allows vacant/unsold seats to be taken by the employees for travel.
Infact PIA goes so far as to even disembark its employees from the aircraft to accommodate revenue passengers.
As per industry practice a flight is closed for selling atleast 3 years before estimated time of departure. However, PIA keeps the cash register open till the last 30 minutes to ensure that every inch of the aircraft is offered to revenue paying guests. This is at times results in deplaning of employees in favour of revenue passengers.
Sadly there appears a lot of misunderstanding and misinformation with regards to the national carrier in our society. This is not in any way to suggest that PIA be absolved of its wrong doings / ills. The point is make people understand that PIA should not be looked at in a vacuum. Its a state owned corporation and runs just like state itself is run. Any state owned company is only as good as the state that runs it.
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Jan 25, 2018 08:33am
Let's break it down,
Losses were high fuel prices of over $100 per barrel in 2013-14 (but they have been low in the past 2 years)
Shortage of aircraft, navigation and other expenses and increase in salary of PIA employees. (if PIA had not been over-recruiting people, bleeding money on things that were not required, they would have money to buy all that had been missing)
The German CEO, Bernd Hildenbrand, what he did is a corrupt conduct out in the open and he gets a free pass? this shows the incompetency of the system.
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Jan 25, 2018 08:34am
Is there any route on the international services provided by the PIA, on which it is making a profit? Please sell it to any airline which is willing to cough up a few millions under the table to the signatory of the letter transferring the route and make everyone happy. When giants like the PIA die, their death should bring solace and consolation for some.
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Jan 25, 2018 08:53am
Well it was coming for some time now.
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Jan 25, 2018 08:57am
The staff seats are not the reason the flights are losing money. It's the corruption and mismanagement by the government.
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Jan 25, 2018 09:01am
PIA is deliberately being sunk by the government, so that the leeches can take over its routes and assets and make money for themselves.
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Jan 25, 2018 09:10am
PIA staff, Parliamentarians, and government officials working in PIA are equally responsible in this case. people have the right to deny the causes but take a flight today with PIA Domestic or international routes you will understand the reality. It is simple then ABC. PIA staff still doing old practices to ruin already dead airline. I booked flight over the phone and was advised to make payment to their near by office but when I reached their office, PIA staff advised me that we are on strike while sitting in office using all perks but they cannot receive payment for ticker. They advised me to pay for the ticket next door private agency. Now tell me will this institution will ever stand up on his own feet. Simple answer no
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Jan 25, 2018 09:14am
Good decision.
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Jan 25, 2018 09:15am
PIA is on slow self destruction mode...Let it be quick to save the tax payer's money...It is beyond salvage...
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Jan 25, 2018 09:21am
Govt must take sincere efforts if then PIA may convert in profitable organization.firstly reduce excess staff from PIA reduce excess expenses,and must make limited union activities in PIA iam sure it will be convert in profitable Airline.Some hard steps against corruption also need if sincerely efforts may taken no doubt it will surely convert in PROFITABLE ROUTE.
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Jan 25, 2018 09:50am
This is no ones fault except the greed of PIA management. Why is it that all other carriers make money from NY or Texas except PIA. One, how did the management come up with the cost of a ticket? compared to other airlines the cost of tickets to Pakistan were the most expensive. The greedy management thinking they were above reproach, stole what they could from the passengers. They did not realize that it would catch up with them in the long run. Secondly, they gave too much away in the form of tickets and free travel. They even lost a plane which was found in Germany. It tells you how PIA was run. It was run by crooks for crooks. Not one experienced person at the helm.
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Jan 25, 2018 10:10am
All game plan. PIA has $1.5B+ worth of excellent investment (hotels) in New York and Paris. Incompetency has been used to destroy the airlines, rob the valuable assets, sell airplanes and other assets to friends to cheap price, and then to ultimately operate and profit from own airlines such as AIR BLUE. Yes Pakistanis you've been hijacked by your own leadership.
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Jan 25, 2018 10:10am
Corruption and attitude brought the inglorious chapter in the history of PIA
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Jan 25, 2018 10:31am
@allan please give it a break. Other airlines staff also go on strike.
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Jan 25, 2018 10:33am
as long as only the Pakistani diaspora is flying PIAA there is bound to be losses. I flew PIA Karachi-Bombay in the early 90s and it had good standards then. But to have a profitable enterprise like this there has to be a lot more business travel and tourists who are not of Pakistani origin. Biz travel is where the airlines make profit. And cargo.
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Jan 25, 2018 10:34am
Loss making through bad management nothing else, PIA for years have had the monoply of direct flights to Lahore & our capital yet they loose money - by now we should have had a fleet of A380's and 777's but no.
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Jan 25, 2018 10:41am
Love PIA, a great organization. Govt needs to revive it by placing competent managing officers. Thousands of people's livelyhoods depend on the national carrier. The training academies are one of the greatest which are producing good competent engineer for the aviation industry. The privatization model of 50/30 model is good, giving administrative control to the private industry as well, and govt should retain 50% of the stake. Excessive and kamchor employees should be fired at once.
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Jan 25, 2018 10:47am
There are multiple reason for PIA to be like this.
But one another reason comes to mind is that crippling the airline by government officials so some bull crap politician or his proxy can buy it for cheap.
Privatization is a good thing as government should only be providing the public services. Not for profit companies.
Thing about it, the Prime Minster (Khakan Abbasi) owns his own airline (air blue) in Pakistan. So do you except PIA to be doing good? Isn't this conflict of interest?
There are perhaps thousands of reason and corruption is almost everywhere.
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Jan 25, 2018 11:08am
ISB-NYC has been kept open for political reasons. Our politicians want a direct flight to NYC. Never mind the losses.
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Jan 25, 2018 11:13am
What are, "navigation and other expenses?" Please enunciate!
PIA has to discontinue free tickets to staff members in view of such a precipitous situation in its existence. Yes, at least 25 percent of ticket cost must be recovered. Salams
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Jan 25, 2018 12:08pm
State of a national airline usually reflects the state of the nation
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Jan 25, 2018 12:48pm
@shaikh mustafa Most airlines give seats to its employees if vacant - you and I know that what you said is true in theory but a different story when it comes to practice. Many people can testify how their confirmed seats have been cancelled to accommodate certain 'special' people and employees. The airline unfortunately has been run on personal connections and interest ie with no professionalism and ownership whatsoever - with the revenue passengers just as a side show so that the party can keep going. The moto of PIA should have been 'make hay while the sun shines'.
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Jan 25, 2018 01:02pm
Everyone makes money on those routes, airlines are buying more aircrafts to satisfy the ever increasing air traffic. It’s pure mismanagement, over staffing, and giving life time free tickets to retired staff and their families.
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Jan 26, 2018 05:30am
@white noise ... $100 a barrel. You are talking about unrefined, sweet crude oil, not fuel.
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