Privatising PIA, what was the hurry in promulgating the presidential ordinance when the NA session was two days away
KARACHI: This refers to the article, “Goodbye PIA” (December 7) by Kamal Siddiqi in this newspaper. The government has been claiming that no dictation is being taken from the IMF in economic matters although the sale of PIA will be part of a dictation. What was the hurry in promulgating the presidential ordinance when the National Assembly session was taking place after two days, as rightly pointed out by the writer? This makes the whole issue fishy. There is no harm in privatisation but there has to be logic as to why defence-oriented state enterprises are being sold on a priority basis to foreigners when these units have the potential to generate revenue in billions of dollars.
The Privatisation Commission owes an explanation as to the justification for inducting favourites on hefty salaries running into millions, when PIA was already overstaffed. As a principle, whenever any unit is privatised, no fresh buying is undertaken. What was the justification in adding 18 to 40 planes when major revenue-earning routes were closed? This benefited foreign carriers, in general, and Middle Eastern carriers, in particular. Foreign carriers are siphoning off our foreign exchange, which runs into billions of dollars annually, due to the recently introduced aviation policy. The capacity mounted by foreign carriers for Karachi to UAE flights is approximately 5,000 seats daily. The yearly capacity floated by foreign carriers out of Karachi to the UAE is approximately 1,825,000 seats. Assuming 75 per cent seat utilisation by these carriers throughout the years, the number comes to 1,368,750 seats. Out of this, 60 per cent is utilised for the UAE. The remaining 40 per cent is for destinations beyond the UAE. On average, if tickets are sold at Rs25,000 for a round trip from Karachi and converted to dollars, the amount sums up to $200 million. If tickets for other destinations are sold for Rs100,000 each, the dollar value comes to $525 million for a total of $725 million.
The average yearly depletion of foreign exchange from Pakistan is in the bracket of around $6-8 billion, and if other northern stations are considered, such as Lahore, Islamabad, Peshawar, Faisalabad and Multan, the figure goes a little higher. Unfortunately, it is all Pakistani traffic that travels on these foreign carriers, so it’s our passengers who are compelled to use foreign carriers since there is no adequate capacity mounted by local players. Imagine if these carriers were restricted to operate with 50 per cent traffic rights controlled. This would reap positive results for our local industry, with PIA’s profit running into billions of rupees. The government should immediately reduce traffic rights for foreign carriers. The people of Pakistan should be compensated with cheap fares, which would give them value for money, convenience for direct travel from point A to B, comfort, reliable service and a sense of pride — travelling by local carriers. This would further expand the travel market base in Pakistan, locally and internationally.
Mukhtar Ahmed
Published in The Express Tribune, December 9th, 2015.
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