Five-year revival plan for PIA by March, promises CEO
ISLAMABAD: Pakistan International Airlines (PIA) will submit a five-year ‘Strategic Business Plan 2019-2023’ to the government by March.
Addressing a press conference on Tuesday, PIA CEO Air Marshal Arshad Malik said the plan, currently being developed, consists of cost-cutting and revenue generation through detailed analysis of the market, right sizing operations, work centre, flights and routes for the revival of the national carrier.
PIA’s financial restructuring will be carried out through government support and at the same time the current fleet will be reviewed and purchase of new aircrafts will be decided, he said.
Explaining PIA’s financial health, he said the current operational losses are at Rs3 billion per month but this bleeding would be successfully plugged. The accumulated losses have risen to Rs431.1bn, while loans/borrowings have touched Rs247.7bn.
The government will announce a new aviation policy in February to boost PIA’s business, he said. Prime Minister Imran Khan has assigned the task of drafting a new aviation policy to Privatisation Minister Mohammad Mian Soomro and the Secretary Aviation.
The Open Skies policy of the previous governments brought losses to the national carrier, Mr Malik said. The government has already decided in principle to end the open skies policy.
“PIA’s 550 weekly international flights were brought down to 101 flights. Foreign carriers took away the business from 101 flights per week to 555 flights per week. These airlines are supported by their respective governments, particularly the Gulf carriers which get fuel subsidy whereas PIA does not get any subsidy. How can PIA compete with other airlines in the market,” he questioned.
He claimed to have taken “bold steps” for cost cutting. Duration of flights to Europe will now be reduced by an hour as a result of flying over the territories of Iran and Turkmenistan. Previously, all Europe-bound PIA flights avoided flying over these two countries just to avoid payment of fee to the civil aviation agencies of Iran and Turkmenistan, resulting in extra consumption of fuel. However, the matter has been resolved with the intervention of Army and PAF chiefs, he said.
On route economics, Mr Malik said PIA is under compulsion to operate flights to Gwadar, Turbat, Panjgur and Saidu Sharif routes whether or not these routes make a profit. “The annual loss on operating flights on socio-economic routes amounts to Rs452 million,” he said.
Sharing details, Mr Malik said that in addition to the Roosevelt Hotel in New York, there are another 23 properties owned by PIA in Tashkent, Tehran, New Delhi, Bombay, New York, Copenhagen and Amsterdam.
“These properties have been abandoned and virtually forgotten,” he said. “Assistance of the Foreign Office has been sought to engage ambassadors in these cities to evaluate these properties. Either these properties would be disposed off or will continue as source of income,” the CEO added.
At the press conference, the CEO said that flights on seven international routes have been stopped since these were costing Rs500m to the airline. “PIA had been facing losses on these routes for a long period,” he said. Citing the example of Islamabad-Beijing-Tokyo-Beijing-Islamabad route, he said an aircraft would be blocked for five days, with resting of crew members for equal number of days. Moreover, on the Tokyo-Beijing flight, PIA was allowed to pick only 80 passengers on a 350-seat aircraft, he added.
As part of cost-saving operations, PIA has now introduced five new international routes including Islamabad-Doha-Islamabad, Karachi-Jeddah-Karachi, Multan-Muscat-Multan, Sialkot-Sharjah-Sialkot, Peshawar-Al Ain-Peshawar and Lahore-Bangkok-Kuala Lumpur-Karachi.
“In these routes, PIA is getting 95pc seat occupancy. Aircraft from loss-making routes have been shifted to profitable ones.”
On the occasion, the privatisation minister announced that PIA will start Peshawar-Kuala Lumpur flights from April.
Published in Dawn, January 16th, 2019
Comments (77) Closed
There you go, finally someone looking at the problem professionally
The ceo has recently attached the most incompetent and corrupt person in his office (reporting to his advisor). I am wondering what kind of “advice” he is thinking to get from such people.
Another route can boost profit for PIA Flt even twice week especially on weekends and that is Islamabad-Al Qassim-Islamabad because a huge number of Pakistanis are residing in this part of Saudia Arabia. This routcan give PIA 100% occupancy of seats even if they operate 3-4 flights in a week.
Salam Sir: 5 years turn around is too long. You may not be able to fix it so far as you are reuqired to pay interest of PKR 40 billion per annum. You can never earn so much profit to pay this and yet report profit. It possible, get this loan written off, and start a fresh!
Previous govts have deliberately put pia on back foot while their own airlines prosper.
Improvement of the ‘pathetic’ customer services by the political appointees and no-nothing is nowhere to be found on the to-do list hence it’s not going to work. These days airlines with the best services survive. Learn a bit from United airlines experience which has failed due to its sluggish customer services. I would pay where I don’t get bully or have some respect.
Plans only work when people do their job.
Another new CEO and another new plan!
The only example where an Air Marshal is going to run a Commercial Airline and to turn it in to a Profitable Business. Sure, why not? With all the courses he aced in Management, Accounting and Finance.
so nothing will be done, five year plan looks much like the one PTI spelled for the country and nothing is happening
@saad, this is part of that plan if you had seen the press conference you would have seen already a lot has been done in PIA.
All previous governments only inducted their political workers and blue eyed people on high salaries and cushy perks. Union was there to thwart any desires to bring about change and people like Mushahidullah were there in the union to get their kith and kinn enrolled. InshAllah there seems to be a positive change and hopefully we will see our national carrier once again regaining its lost glory.
This sounds and looks good. PIA should abandon all non-profitable routes internationally.Focus should be on profitable destinations and maximum seat occupancy,smart cabin crew,good healthy food , competitive fairs and good safety.I am sure overseas Pakistanis would love to fly with PIA.
All of PIA'S overseas real estate should be renovated and restored. Why sell them. They have plenty of potential to make money.
Good to hear all this. All the best
Picture perfect moment ! A 747 perfectly alligned with the runway after landing.
Flush out all politically employed staff and get instant progressive results.
@saad, do you expect changes to happen overnight? Nawaz and Zardari leadership almost destroyed the country at the expense of their pockets. At least PTI is heading Pakistan towards the right direction, one that will make the country progress Inshallah.
PIA has tooooo many employees and yet the worst service. PIA needs to severely cut the number of its employees to less than its competitors on a per plane basis. Those with the least merit and productivity should be let go with some job training in other fields. Its a bitter pill to swallow, but it has to be done. And then the wages of all of the remaining employees should depend on how much money the airline makes or loses. Its losses should not be placed on the heads of us taxpayers.
First get rid of thousands of people employed as political bribes. Run the airline as a business not a govt organisation
Giving 5year plan by current management Is a sign of failure, and if current management can’t do, then bring aggressive management. We have seen all 5 year plans failed, so why create another 5year plan. Hope PIA current or new management looks at turn around of all other companies around world, and take drastic actions to bring back PIA out of red in one year, and then two years becomes as one of the leading airlines of Asia.
If government accepts 5year plan, then it tells PTI government no different than any other government. Results should be immediate to see the management success, otherwise so many companies failed with CEOs giving long term plans, they took their severance and walked out after their failures,
@A Patriotic National,
I agree with that, 5 yrs plan is too too too long, nothing is going to be done just ensuring the job for a long period of time. very very disoppointing.. I don't think so its going to be approved. its reflects no talent is avialbel back at home, everyone is greedy for money... another bahria town kind of a project...
Good intentions; However, please start fixing the people first since it is all about people in any business. We can always add new routes but if the same people with same horrible attitudes serving the new/old routes not much will change since airline is a service platform how PIA staff behave in the air and on the ground is absoluty unprecedented - Poor, inhospitable attitudes to the passengers must go away if we want to see any noticeable change in this ill fate airline. I travelled with PIA about 12 years ago and after my 2 back to back horrible experiences I avoid PIA at any cost if I can even when I have to pay more, will not touch this airline with a 10 ft pole and I am a frequent business/leisure traveler. Love Pakistan but PIA is not part of that love unless something drastically change you have lost my business. Good luck with your plans.
Thanks CEO PIA Air Marshal Arshad Malik and Thanks Naya Pakistan.
Bankruptcy pia. Start new airline with other options
A retired Air Marshal can’t run a civil institution because he is not trained to do so. This is the mistake Islamabad has been doing again and again. Just take a deep look at Mr Malik’s first statement he needs 5 years instead of 2 years, the reason being he got no clue of the problems e.g. overstaffing, untrained staff, losing lucrative routes, issues of time keep etc etc
So you mean to say for the next 5 years we should keep on feeding pia our tax payers money
please stop loot in PIA kitchen by PIA staff that will also save millions.
Lets hope that the plan is implemented as well...fingers crossed
I am irritated over my self for flaying with bad food, bad service, rude staff, delays and expensive tickets for so long (Flights between Norway and Pakistan). Now I use Qatar despite not being a direct flight and I have never been happier.
The MD has no previous experience in running a commercial enterprise let alone one of the most competitive businesses in the world... The plan will fail before the ink dries.. PIA needs to be shut down and restarted with a completely new management staff.. Pilots and Engineering to stay on
747, the most beautiful plane ever built!
PIA seriously needs to drastically reduce the number of employees first and take strict measures to prevent future political appointments..
@Satya Jeet, PIA was the leading airline in Asia, when Air Marshall Asghar Khan and Air Marshall Nur Khan, were heading the airline in the 60's. The difference was they were not corrupt and were not politicians, and were highly efficient at their jobs.
PIA needs to lay off the staff which have been hired on political favors. But they won’t do that because management themselves are hired on political favors same case with Pakistan railway. Because of this pressure Nawaz Sharif couldn’t privatize PIA in his tenure.
You make me laugh people.
Open skies policy should not be abandoned until PIA is made to set its house in order. Right now PIA's operations are pathetic. Flight delays and cancellations are common. Pakistani consumers do not deserve to suffer due to this poor customer service by having to compulsorily chose PIA.
Once PIA mends its ways, then restrict the foreign carriers' flights to Pakistan. Until then why should the people of Pakistan pay by suffering at the hands of PIA?
This is why I switched over to other airlines after flying with PIA for 40 years:
New govt new promoises... we always suffer..
Just remove the extra staff. Hire a professional HR company to manage the HR. Thats the biggest cost. And remove any corrupt individuals immediately. Hire only on merits. Give the management to a foreign airline if you cant handle it.
So does that mean London -Islamabad will only take 6 hours, at the moment takes 7
@saad, no one has magic wand to take you out of misery in a matter of days. Destruction can be done in days but reconstruction take its course over the period of years or may be decades.
There is NO 5 yr revival plan. ECC meeting in 2 months. Concrete improvements need to be shown by them otherwise Asad Umer has promised that PIA will be shelved permanently and another Airline started from scratch.
@Dr Mohsin Kazmi, Everyone here to make money and do some loot of their own.
I say to chairman of PIA, yes, reviving an organisation is a daunting task and it is your responsibility to do so. Here are some of my suggestions: 1. Review and restructure all management activities and appoint competent team with identifying their tasks and responsibilities. 2. Review operational activities and costs - cut down non profitable activities. 3. Review and reorganize futile routes and focus on improvements, customer care and satisfaction 4. Restrict free staff traveling and unnecessary purks. 5. Review training, motivational and business activities, etc. Reviving any organisation is challenging but, it can be done by applying various management tools with dedicated and competent staff - as, safarishis are create obstecles. I hope my candid views will motivate PIA's management team for a bright future - good luck!
There was a buruecrat before and now an ace fighter pilot- can’t they find a commercial aviation person for the top position? A fast ramp up is needed to make PIA profitable again to stop the bleeding. Tax payers are paying heavily and getting nothing in return. However, he has the right priorities: Revenue increase and reduction in costs. He is missing the essential ingredient: customer service. PIA is hopeless in that area. Wish PIA the best for a speedy recovery
Not at all impressed by the press conference given by the CEO, never saw or heard PIA cabin crew throwing food to their passengers neither saw cabin over head cabins being tied with bed sheets.
Please introduce more flight on Dubai Karachi route, currently one flight is in operation and timing is also very odd i.e.1:30 am. New flight should be in day time, certainly PIA will get benefit due to this move.
Hope for the best.
Pakistan Zindabad.
Good luck
Promises. Promises.
I can't see more public money wasted on PIA when the results are already known .... for PIA, PTI is doing the same as the previous governments did so how can I expect different results this time? ..... Did placing Ehsan Mani in place of Najam Sethi improve the performance of Pakistan Cricket team? .... I don't know what kind of experiments PTI wants to do just to learn governance.
PIA needs to become professional and customer focused. Has anyone tried to resolve an issue with the PIA staff? As someone has seed before "Political appointees have to be removed and staff employed on merit " only then will the PIA once great to fly with will improve.
After 5 years, they all will be making another 5 years plan of PIA revival. Just get rid of this white elephant. Government should concentrate on policy making and let private sector to run airlines.
The PIA has conveniently chosed a Five year planing term rather than 3 or 4 so as to pass through the pressure applied by this govt. After next election they will then propose another Five year plan and the rot of National Airline will go on.
I don’t see PIA lasting 5 years, the pasti mprovements must show within a year, changes must be implemented from day one. Pakistan can not afford losing billions every year because the management and the CEO fail to recognize the reasons.
Train the RUDE staff and do proper REPAIRS of planes.
PIA can look at some of the cheaper airports and add flights from there. For Example: Hamilton airport is less then an hour away from Toronto. There is no shortage of passengers travelling from Toronto to Karachi, Lahore Islamabad. It is can be a cost efficient proposition while offering competitive reasonable fares to passengers while maintaining profitable margins. Passengers are looking for reasonable fares to travel back home and you have to keep in mind that us Pakistanis do have large families and cost to fly back entire family is very significant. Just some thoughts
Major re-structuring is vital for PIA, the once proud national flag carrier which was devastated by PPP and PML governments, due to political meddling. They appointed two politically linked airline unions "People's Unity" with PPP and "Air Alliance" with PML. They gave thousands of jobs to political party "jiyalas". PIA management could not sack them, as these unions threatened strikes even shutting down the airline.
No airline in the world would allow such political unions, which operated like mafia they must be banned. Only professional unions like the pilot's union, cabin crew union, engineer's union be allowed. Previous governments gave 300,000 "free" PIA tickets to politicians / government officials every year, that must end. If these two things are done, PIA will regain its past glory to make it "Great People To Fly With".
We will stop others because we do not have skills and are so fat that we cannot compete. PIA has so many privileges from other countries already that they don't utilize. If you want to survive in the long term them compete by performance and efficiency not by closing the sky for others.
Goal should be to promote Pakistan aviation industry for the greater good of common person and economy, with our without PIA. In US the aviation industry boomed and created lot more jobs and convenience for people after they de-regulated the industry. That did result in wiping out the flag carrier but was overall proved to be good for the country of US.
PIA performed better under a retired air marshal about 4 decades ago but since then many things have changed. PPP and PMLN tried professional CEOs from private sector in addition to voluntary chairmen from a long list of their business fraternity but again failed miserably because of the immunizations and political inductions. it was very surprising to know that there was a service terminal at the union's office, which shows the damaged done to this airline by the political parties. Now the only solution to this malaise is to sell it by scrapping it and use public money on public instead of feeding some useless parasites.
There is an old cliche that goes"What if you threw a party and nobody came?" Notwithstanding whatever strategic plans are developed and implemented, at the end of the day, the key element for them to bear fruit would be increased revenues which will be dependent on how you can hoax, coax or otherwise get passengers to fly PIA vis a vis other available options. Right now, with the sullied reputation of PIA, passengers will fly PIA only as a last resort if that. Attracting passengers at rock bottom fares will defeat the objective of bringing PIA back to snuff and out of the hole it has gotten itself in to. I cannot foresee resurrection of PIA out of this dilemma.
Bring back flight to NYC !
this did not seem like rocket science!
For recovery of PIA, the respected CEO should remove all politically appointed employees who have to sense of customer service and bring in Air Force professionals who have been serving the country selflessly for decades. Get airforce pilots, engineers, catering staff, air hostesses in PIA, you will see a sea change immediately.
Five years are too much. Where ever you fly, give excellent service and impression. Praise should appear in papers. Get rid of excess staff. Start Delhi Bombay flights.
Great job.
@saad, if you expect the effects of 70 years of corruption and looting will be gone in 8 months of PTI rule, you are very naive.
Give early retirement to all non-productive staff. Make everyone work hard, no more free lunch. Make PIA profitable in short time.
Now PIA is on proper track, it has banked towards right direction.
“These properties have been abandoned and virtually forgotten,”
Somebody needs to be found accountable for this!
I used to travel by from USA to Lahore by PIA. After putting up many years of poor service, delays and dirty planes, I decided to go else where.
Waste of time ,energy &resourses .Only some miracle May change PIA.
@Abbasshah , miracle is IK.
A great initiative and finally a plan of action to put things right.
Hopefully the dead-wood, free-loaders and political yes-men in PIA will be shown the door without any golden parachute.
Time to run the airline professionally!
The CEO and management should take a cut in pay, and start earning their salaries as they start showing positive changes and actual profits. Like any other business, PIA is a result oriented business, the big salaries ought to be at the back end, not just given to start their jobs. How long has the CEO been in his position at PIA? And now he wants 5 more years to show good results? That ought to be unacceptable to any person with authority.
How many PIA “revival” plans have come and gone over the past years since none of them address the tremendous over staffing issues?
Are you going to be there on that seat after five years? Could you be questioned for what you accomplished or did not accomplish from the five years plan which you are proposing now?