KARACHI:
The debate over whether a civilian or a military person is best suited to run the state-owned Pakistan International Airlines is over, at least for now: outgoing Air Force Chief Rao Qamar Suleman has taken over the reins as the new managing director of PIA.
The new MD confronts some daunting challenges, including an organisation that is haemorrhaging money, an aging fleet that faces increasing restrictions from the European Union and potential issues in dealing with the airline’s powerful unions.
It does not help that far too many in the industry are sceptical of Suleman’s military background. A few weeks before his appointment, when a military man taking over the MD position was just a rumour, the leaders of PIA’s various unions met to discuss the possibility. Many were distressed at the prospect and believed that a military man, with little or no experience in commercial aviation would not be able to handle PIA. The unions also feared that a military head might adopt an inflexible attitude towards a civilian workforce.
Military men have had a mixed record running the national airline. Air Marshal Nur Khan is widely remembered as having led the airline during its golden era. But others are remembered for their scandals. Air Marshal Viqar Azeem is remembered for selling four brand new DC-10-30s through Page Avjet in return for four of Canadian Pacific’s old Boeing 747-200 with an almost expired hull life, causing the airline a $20 million loss. Air Vice Marshal Niaz’s tenure was marred by reports that he allowed the purchase of substandard brake grease that cause the planes to catch fire when they landed at airports in the United States and Europe.
Yet despite these reports, the unions say they are ready to work the new MD on a plan to revitalise the national airline, though they added some caveats. “The unions are ready to work with the new MD, but a lot depends on his plans,” said Shaukat Jamshed, president of the Society of Aircraft Engineers of Pakistan, though he hastened to add that the unions expected to have a good working relationship with Suleman.
The PIA spokesperson also corroborated this account. “PIA associations have welcomed new MD on joining PIA,” said Sultan Hasan.
Perhaps ironically for an organisation that is often described as overstaffed, Jamshed said that “financial problems would remain the biggest challenge for the new management.”
The financial losses of PIA are indeed gigantic. The company has lost over Rs112 billion over the last five years. Its liabilities exceed its assets by Rs79 billion. During the first nine months of 2011, PIA had net losses of Rs19.3 billion, an increase of almost 74% over the same period in the previous year.
Most industry experts say it is pointless to inject billions in bailout money into the organisation without first overcoming its entrenched management and financial issues.
Part of the problem seems to be what industry experts describe as the non-serious attitude of the government towards aviation as a whole. They point to the example of the former MD of PIA being appointed to run the Civil Aviation Authority, which is a practise that is frowned upon in the world.
“It is not only illegal but also criminal to appoint a top official of airline in civil aviation,” said one expert, on the condition of anonymity. “Europeans who are already closely monitoring PIA will take notice of these violations and the country may eventually face all the problems if EU put expected restrictions on PIA.”
The PIA spokesperson, however, disagreed. “There is no talk of expected ban on PIA. And as far as monitoring of PIA in EU is concerned, civil aviation authorities in every country monitor aircrafts and it is not specific to only PIA,” Hasan said.
Published in The Express Tribune, April 5th, 2012.
COMMENTS (24)
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I think it was Cathy Pacific Airlines not Canadian Pacific . from whom Pakistan bought the old planes ...but why always buy old ...?Buy new and be worry free for 10 years at least..
@Rasfa: You are absolutely right. Canadian Pacific B747-200s were a maintenance nightmare compared to DC10-30s that PIA sold. Dickheads become CEO's of this airline, then what can one expect the results to be. I must ask Baby as well??
PIA is run by the Defence Ministry. As retirement playground for retired armed forces officials no wonder it has stopped operating as a business. What experience does an Air Force officer have running an airline? Unless we've been treating our air force as a glorified airline for officers.
What a mess the governments, PIA employee, the management team, and administrators created in the management of operaton of our National airline. Is it really possible to undo today whats left of it. I remember flying during Zia ul Huq time when PIA Employee favored over genuine customers. Is it possible to have a policy of Customer First. Lets bring back PIA from Islamabad and make a brand new Headquarter in Karachi. The city of Karahi is natural center for internaional traffic. With the help of PIA we can also turn around the city of Karachi as a tourist destination.
DC-10s were relatively more moderon aircraft than Boeing 747s. Capacity wise DC-10s would fit in between B-747 and Airbus 300. Besides the DC-10s were powered by the same General Electric Engines as Airbus 300 and 747s acquired earlier than DC-10s. However, additional 747s acquired later in exchage for DC-10s from Canada were powered by Prêt and Whitney engines. The situation further aggravated when PIA received 747-300 from Cathay Pacific fitted with Rolls Royace engines. Collection of all the three varieties of engines on the same type of aircraft must have been an engineer's nightmare to maintain them. Keeping a variety of inventory parts as well as maintenance tools must have cost PIA dearly. As far as labour cost is concerned there is no doubt that PIA has employed four times the number of employees it actually needs. But its labour cost, on the other hand, as a percentage of the total cost, is the same as other airlines in the region like Emirates, Etihad or Singapore Airlines etc. This is because PIA pays an average employee only 1/4th the amount other airlines pay to their employees. It is expected that the total labour cost of PIA, for the year 2011, will remain below Rs 20 billion whereas PIA lost about the same amount in the first 9 months of year. Its total losses for the year are expected to be over Rs 26 billion, meaning thereby that even if PIA employees worked for free for the entire year yet the airline would be in a loss. How can we put the entire blame on PIA labour? And how can we justify management's performance? How can we justify PIA Board's performance where either no one understands airline business or has no interest in its performance.
@Ali:
I am well aware of the fact that the -300 version was leased and then purchased from Cathay Pacific. It has RR engines which created a maintenance nightmare for PIA since we don't have experience with RR engines. I think they used to send them to Singapore for overhaul. ' The -300 was not a bad choice to augmnent the fleet even if it is old-style analog three-person cockpit. I think they are being used for Hajj Operations but I did see it flying into Lahore on successive days since I was staying at a place along the approach path. Maybe they use them as back-up as well. They are airworthy but gas guzzlers and need to be phased out.
I presume all the -200's have been retired/scrapped. I hope at least one of them is preserved for display.
Readers here and media people are very fond of using the word "grounded". Any aircraft undergoing maintenance checks at Karachi is deemed to be "grounded"! There is no reason why the -200 was "grounded". Being older, they had to undergo sectional modification as ordered by Boeing in which case they were pulled out of service. But I think that modification was done abroad.
There is a carefully laid-out maintenance schedule for all aircraft that becomes progressively more detailed and time-consuming as the hours and cycles build up. If an aircraft is undergoing a check, is it "grounded" or simply undergoing scheduled maintenance as required by the manufacturer and the regulator?
There is no registration that is AP-BC. You are missing a letter!
Privatise it please (and do it transparently without taking kickbacks). There is no other cure for this cancer. Don't waste further time
PIA is a mess .High oil prices or low oil prices it is always losing money.It is a dumping ground for political appointees not a Corporation which works on sound economic principles ...
For info of Meekal Ahmed, the Boeing 747s PIA got from Canadian Pacific were grounded by PIA (AP-BC series)between 1998-1999 and those that are flying today are B747-300 PIA got from Cathay Pacific and the B747-240C are those that it bought from Boeing. Look up Flight International Magazine March 1985 issue and read the facts about this rip off of PIA by Zia ul Haq and his appointed MD Viqar Azeem and Maj Gen Rahim of Hamood ur rehman report fame for his choice as Chairman.
PIA's problems emanate from Islamabad. This is understood but not accepted. Once this is accepted then the will to correct this has to be found. Once the will is found, PIA will function as an airline should. Final result = will not happen.
Not everything is a scandal.
The DC-10's were NOT "brand new". They had been in service with PIA for some time. The jumbo's were not beyond their hull life! Where do you get this information?
There was always a wish that PIA operate the "Queen of the Skies". And why not. The 747-200's were retired only recently after years of brilliant serice to Pakistan. They are still flyable but costly especially in terms of fuel.
As for the new MD, there is no magic wand in his hand. High oil prices are pushing airlines to ruin around the world. It is not PIA-specific. Someone should calculate how much of PIA's losses are attributable to high oil prices. I don't know why or whether they hedge. Most airlines do.
Of course there is a lot of inefficiency and corruption in PIA. That leads to revenue losses. So even with 100% load-factors, PIA continues to lose money.
A fine man not mentioned in the article was Air Marshall Ashgar Khan.
AM Qamar Suleman does not seem to be the right choice for this job. Army or Airforce aviation is a security apparatus which runs solely on command and revenue generation is never on their agenda. Commercial aviation is a service industry, which is highly regulated not just by CAA Pakistan, but by ICAO and every civil aviation regulatory body of the country that it overflies or lands at. Aircraft manufacturers and insurance require that maintenance is carried out according to manufacturer's recommendations and parts supplied by their recommended vendors. Unfortunately for the new MD, he will have to forget about his airforce experience and get acquainted with commercial aviation and importance of revenue generation through competitive marketing strategy alongwith enforcement of financial discipline to plug revenue pilferages and eliminate kickbacks in procurement of parts so as to cut costs. Passenger Safety and convenience is of prime importance in airline business, where the client is king, not the airline boss or employees.
there are two things attached to with him.
1.Honesty(5/10) 2.Professionalism.(10/10) 3. Politics (0/10)
Honesty: yes, he may be.
Professionalism: No doubt in that.
Politics: You cant be a head of PIA if you are not associated to the corrupt elite that rule pakistan at the moment. thats simple.
Culture eat the religion for breakfast. i say , politics eat Honesty even faster.
regards,
ps: he said he tossed 10,000 bombs over FATA :) . if you know what i mean.
From his past credentials, one can't really tell if he has what it takes. I have an idea, how about we contact the Indian bookies and see if they are taking bets on this? :p
The nation gave this guy all the financial resources as an air chief but he failed to invest and failed to plan air defence. American air raid in Abottabad is proof.
With that in mind, how the heck he is going to save PIA which is failing organization?
I think we must stop this habbit of giving cusy jobs to failed generals. Also keep in mind it is these kinds of generals who do not speak against or stop military rule and hence ruin the country.
Changing faces does not solve the problems until & unless you reduce the no. of employee in the national carrier which is the only solution for the PIA.
@Naeem khan: It is not a hidden agenda of our wise Prez. Its a known fact that he wants to setup his own airline, run their own trains, manufacture their own electricity and own the steel mill etc.. We will have airline called ZardariAir for a country known as Zardariland. Sounds like New Zealand....
But this is a hopeless appointment.
Ex Air Chief must have started to realize now that he has put his prestige at stake by accepting the appointment as a PIA Chief. If that be the case he must join the golf club at Islamabad like his predecessors to save his prestige. Its not too late yet. At this stage PIA cannot be turned around by anyone even by People like Tim Clark (Emirates), James Hogen (Etihad Airways) or for that matter even by Tony Farnandos (Air Asia). These people are known to be the icons of airline industry in the region. PIA needs to be privatised first before anyone thinks of turning it around. This again is a dauting task because its liabilities are far more that its assets. Will the Government of Pakistan pay the difference of about Rs 90 billion to its potential private owners so that they are able to take over PIA? This gap between assets and liabilities is widening by Rs 1.5 million per hour. Does anyone care?
He is not here for turn over but to enjoy the rule of Mr Zardari please don't raise people's expectation and instead tell them that he is being rewarded for his passivity during Obama operation.When will be our media so powerful that we could here the right reasons instead of these diversion news.
1) The first thing that actually needs to be done is to stop political hiring (read PPP hiring).
2) The hygiene conditions of the planes need to improve. Strangly enough, I found cigarette ash in the seat pockets last time I travelled,
3) look at a fuel hedging policy.
4) don't ever play Bollywood music if the plane is delayed or is idling around. Last time we were stuck because of "operational delays" , the crew had the audacity to play cheap Bollywood songs out loud. There needs to be standards applied.
5) food needs to improve to the old standards PIA was known for.
6) be PUNCTUAL ( actually this should have been the first point)
I recall when BB took over as PM and some of the party members were inducted in PIA all over the wold.I know one instance in New York City where this party hack who was a cab driver was appointed on public relations job, he was the most unfit and incompetent person for that job.Beside these political appointment of incompetent people, the politician, military and their families fly with out paying the right amounts and they think that it belongs to them.PIA is bloated with unnecessary and incompetent people and the unions should understand that a time will come when this air line will go under and all of them will lose their jobs.This government has deliberately let the air line, railways and steel mill go down the tubes, Zardari and company has some hidden agenda for PIA.General Suleman, cut the fat and make this air line leaner and meaner, there is no other way to survive.
I just travelled on an international PIA flight to North America which was virtually fully booked - the simple truth is that most expatriate Pakistanis prefer to travel on PIA over any other airline. I know I prefer PIA over any of the Gulf airlines including Emirates or Qatar Air. It makes no sense for PIA to be losing money when so many Pakistanis prefer to patronize PIA- the food is good, the staff are pleasant and the flight is good. The obvious truth is that there are too many employees who are in PIA - until PIA trims and says good bye to excess staff, it will continue to lose money because I am sure no airline in the world enjoys the loyal clientele that PIA has.
Very well decision. If he is allowed to do work he may turn the table