HERE we go again; yet another business plan is ready to fix PIA, our troubled national flag carrier. This time the proposal has been formulated by IATA that projects a turnaround in the loss-making airline in five years’ time and, hence, is more likely to appeal to the government. The devil, as they say, is in the details. But the scheme doesn’t suggest anything new or out of the box. Most proposals — PIA’s financial restructuring, reorganisation of company structure, financial discipline, human resource rationalisation, cost controls, independence from political and bureaucratic domination, induction of new aircraft, route expansion, etc — have been on the table for more than a decade and a half now, and part of almost every suggested PIA revival road map. If implemented, consultants tell us, the airline will achieve the break-even point in the fourth year provided the internal and external market situation remains favourable. So far so good. The problem is that the PIA management finds the proposed road map “aggressive and difficult to accept” even though it agrees to “many proposals”. It remains unclear as to what parts of the plan it has problems with. All we know is that the plan’s dependence on factors such as financial restructuring, changes in national aviation policy and exemption from procurement rules is the major reason behind the management’s scepticism.

However, there are other factors besides the management’s reservations that might kill the proposal before it can even take off. Apparently, the finance minister thinks the government would require around half a trillion rupees to implement the proposals. That brings us to questions we must answer before moving forward. Would it be worthwhile to spend such a hefty amount on an experiment that may or may not succeed? What is the guarantee that a bankrupt PIA would not start losing money again within a few years of its revival? Last but not least, why is the government so adamant about keeping the airline in its business portfolio? It is true that many countries have national carriers. But most of them are wealthy and have the cash to erase losses if and when needed. Moreover, these airlines are managed professionally according to best international practices outside the civil service rules. With PIA’s accumulated losses running close to Rs560bn, the cash-strapped government should carefully consider the serious trade-offs it will have to make for the revival of the national flag carrier.

Published in Dawn, February 3rd, 2022