RAWALPINDI: A business plan has been developed with the assistance of the world’s premier aviation organisation, the International Air Transport Association (IATA), to help Pakistan International Airlines (PIA) return to profitability.
“The comprehensive business plan for PIA for year 2022 to 2026 was presented to Minister of Finance Shaukat Tareen and Minister of Aviation Sarwar Khan on Tuesday,” said a spokesman for the national flag carrier.
The business plan preparation was commissioned by Ministry of Finance last year consequent to a report by former special assistant to the prime minister on public enterprises and reforms Dr Ishrat Hussain.
Dr Ishrat’s report, termed a complete restructuring plan for PIA with the objective to not only make it profitable but also convert it into an agile business unit, focused on its core operations.
Plan developed with assistance of International Air Transport Association, says official
As the plan involved financial restructuring to the tune of hundreds of billions of rupees, officials at the helms of finance ministry and the planning commission demanded a business plan prepared by an international consultant for PIA before committing to the huge amounts.
IATA’s consultancy services were hired for that purpose which after one year of spade work has developed a five-year corporate business transformation plan with 2022 as the base year and going all the way to 2026, he said.
The key postulates of the business plan encompass financial restructuring, independent decision making, re-organisation of company structure, restrictions to core business, financial discipline, HR rationalisation, cost controls, review destinations, a fleet planning exercise and network expansion thereby increasing PIA’s network spread and passenger uplift.
The spokesman said PIA’s fleet was expected to grow from current 29 to 49 by 2026, comprising 16 wide body, 27 narrow body and six turbo propeller aircraft.
The fleet will be used to expand on current productive routes of UK, KSA, UAE and Gulf sectors as well as will be operated on identified markets of Baku, Hong Kong, Istanbul, Kuwait, Tehran, Urumqi and Singapore. Resultantly, PIA’s passengers would grow from 5.2 million per annum to 9.0 million per annum and revenues to $1.7 billion per annum by 2026. The assets of PIA will also increase from current $1.196 billion to $2.183 billion.
PIA, which is currently operating 359 round trip flights per week, will be operating 581 round trip flights at the end of the programme.
However, the plan has been made conditional to certain factors, most important of which is the commitment by the government to undertake the financial restructuring of PIA for the legacy debt on its balance sheets and which are beyond the serviceable capacity of the airline, he said.
Published in Dawn, February 2nd, 2022
