Opinion

Goodbye PIA

PIA continues to offer good service despite the trying conditions it operates in

Kamal Siddiqi December 06, 2015

The writer is Editor of The Express Tribune

Finally our national carrier is to be sold off. Earlier this week, the president promulgated the Pakistan International Airlines (PIA) Corporation Conversion Ordinance, paving way for the privatisation of the national flag carrier. While the PIA management refuses to comment on this, the general impression is that this is being under a condition of the International Monetary Fund (IMF) loan programme.

The promulgation of the ordinance marks the second time in less than a week that the government has bypassed parliament in order to save the two-year-old $6.2 billion IMF bailout package. The decree was issued just 48 hours before the new National Assembly session was scheduled to begin.

Through the PIA Corporation Conversion Ordinance, the government has repealed the PIA Act of 1956 – which remained a legal hindrance for the airline’s privatisation – and converted PIA Corporation into PIA Company Limited with immediate effect. The move comes shortly after the federal government refused to service the Rs248 billion debt of the airline from the budget, rejecting a demand that sought Rs3.5 billion per month to avoid default until the airline was privatised.

The government was also reluctant to sell two of PIA’s hotels – the Roosevelt Hotel New York and Scribe Hotel Paris – to pay off the national flag carrier’s ballooning debt.

As things stand, there are about 18,000 employees of airline and many of them are on contract. PIA has one of the highest aircraft-to-staff ratio, hovering over 500 per plane against the industry average of 150. By conservative estimates, it is overstaffed by at least 5,000 employees.

The affairs of the company will now be out of the domain of the federal government, giving greater freedom to the buyer in taking decisions regarding the company including those pertaining to employees, say officials.

Our reporters say that although the government has protected PIA employees’ benefits for the time being, the wording of the ordinance suggests that the terms governing the employees could be changed in future, if needed. This may mean that the employees may not get the benefits that they have been promised earlier. It should come as no surprise.

Under a condition of the IMF loan, Pakistan is bound to invite investors to participate in PIA’s privatisation through media advertisements before the end of this month and to sell off the carrier by June next year. In other words, by next year, our national airline, which we have come to love and hate, will end up finally in private hands.

The government has given a written assurance to the IMF that it will sell at least 26% of shares but an official said some prospective buyers have shown interest in acquiring a majority stake. A consortium belonging to Punjab and a Gulf country is said to be interested in acquiring the airlines.

Despite its debt and its employee ratio, PIA remains an attractive proposition owing to the market it serves and the potential of growth that is promises. As Pakistanis, PIA has remained a source of pride as well as heartburn for us, and to see this entity now going into private hands can only means that things will never be the same again.

To the thousands of employees and ex-employees who have seen the airline touch the height of success and also those who saw it plunge to new depths, it will be an important moment. One also wonders whether PIA will continue to play its strategic role of serving unprofitable routes as well as providing overseas Pakistanis with services like the transport of dead bodies back home, which no other carrier offers.

One cannot forget how PIA’s employees strived hard to make it one of the best airlines of the world. There are hundreds of people who gave their lives to make the airline it is. It is time to acknowledge their contribution. Even today, PIA continues to offer good service despite the trying conditions it operates in. One wonders whether a better option would be to give the airline into private hands but retain majority stake by the government. At least that way it will remain Pakistani.

In the final analysis it was neither the employees nor the travelling public that let down PIA but the country’s rulers who used it as a golden goose for decades. Will they ever be held accountable for their failings?

Published in The Express Tribune, December 7^th, 2015.

Like Opinion & Editorial on Facebook, follow @ETOpEd on Twitter to receive all updates on all our daily pieces.

COMMENTS (13)

curious2 | 8 years ago | Reply @Shahzada Sohail Malik: FYI - while many associated Pan Am with the USA it was never owned by the USA govt.

Shahzada Sohail Malik | 8 years ago | Reply Finally a good long awaited decision which surely will turncaround the carrier. "PRIVATISATION OF NATIONAL AIRLINE" is not a taboo subject as in past many national carriers of different ciuntries were privatised or closed alltogether. The proninent example is of USA National Airline " PANAM" which was formed in 1927 and was closed in 1991. So we should not be sentimental about this decision of PIA privarisation and hope that it will bring in some positive changes in the airline for its better future.

VIEW MORE COMMENTS

cautious | 8 years ago | Reply Ain't going to happen. Nobody is going to want to buy a minority interest in PIA - especially when the majority shareholder (govt) has a history of manipulating management decisions. Even selling 100% of the airline is going to be an enormous challenge. . What assets does PIA have that another airline would value? Certainly not the aircraft which are either antiquated or recently leased at above market rates or the hotels which have nothing to do with the airline. It does have landing rights, terminal assets, etc but it's also overstaffed, stuffed with govt cronies and hampered by union issues. Smart buyer might buy the name, landing rights, terminal assets etc - and leave the planes and employees with the govt. Buyer can interview old PIA employees for positions in the new Company - likely leaving at least 5,000 without a job. . Unfortunately no matter how you structure the sale the govt is going to be left with a major unpaid debt - and that embarrassment maybe the real reason that the PIA sale will continue to be discussion rather than action.

ghayyas | 8 years ago | Reply Just kick out all those employees who were not appointed on merit and PIA can fly again. But, it is easier said than done. Those blue eyed employees are sons, daughters, son-in-law, daughter-in-law etc. of politicians, civil and military bureaucrats and other influential people. Secondly, PIA awards too many free or subsidized tickets and other benefits to its employees, politicians, military men and others. Stop this unfair practice if PIA wants to fly again.

Bewildered | 8 years ago | Reply Well, I am not against the privatization of PIA, as this is probably the only way left to save the national exchequer tens of billions of Rupees paid every year to make up for the loot and plunder of the corrupt PIA employees and management. However, the two hotels, Roosevelt Hotel New York and Scribe Hotel Paris, should not be privatized along with PIA as both are the prime properties which have grown 20 times in value in short time and are not losing money either like PIA. These two properties alone are worth billions of dollars, and many businessmen in collusion with corrupt politicians have been trying since decades to get their hands on these highly profitable and prestigious properties. Though these two properties are technically owned by PIA through its subsidiary 'PIA investment holdings', but the funds for their purchase were provided by the Government of Pakistan, and hence these two hotels can be withheld from privatization without any obligation or legal hitch. GoP must learn from the experience of PTCL privatization and make this clear from the very beginning.

IA | 8 years ago | Reply "Even today, PIA continues to offer good service despite the trying conditions it operates in". Anyone travelling on PIA regularly will know this to be total fallacy. When stood at the airport being tapped up for illicit payment by check-in staff there is no way you can claim PIA service is anywhere near good.

Saleem | 8 years ago | Reply bulls eye, the last para absolutely nailed it.

Mesmerized | 8 years ago | Reply Privatization will only shrink PIA operation, no private airline has achieved anything significant in Pakistan

OSD | 8 years ago | Reply PIA was a great company and still has great potential. It has very strong systems and some employees who were hired in the 80s, still retain a level of professionalism. But the best that we can do now is allow this great company to be privatized without drama and finally let it take its next step towards regaining its health.

sabi | 8 years ago | Reply Goodbye to corrupt employees and their employer aka ppp.welcome to PIA which has bright prospects of retaining its lost glory.

Parvez | 8 years ago | Reply PIA is a victim of the loot and plunder of our rulers......its privatization was inevitable many had become filthy rich and may will become filthy rich in this process but once its over the country will benefit in the long run. To even dream of accountability would be a waste of time.

Woz Ahmed | 8 years ago | Reply I for one stopped travelling with them 20 years ago, the experience was traumatic. Please note, your article suggests PIA has 36 planes , it actually has 45. Also to be noted is that 11 are ATR 42//72 so their seating is 42-72 per aircraft, suggesting employees per plane is not a good measure .

Malik Tariq | 8 years ago | Reply PIA has been reduced to an airline in shambles by its continued abuse by successive governments starting from Zia onwards. The final nail in the coffin of PIA was driven during incompetent managements of Musharraf, followed by massive abuse by cronies of AZ such as Aijaz Haroon, Nadeem Yusafzai and last straw that broke camels back was Shujaat Azeem. This is an airline which has been pilfered endlessly and has collapsed because of massive corruption by incompetent corrupt managements. It can rebound back, because there exists sufficient Pakistani clientele and potential of growth.

Replying to X