Goodbye PIA
PIA continues to offer good service despite the trying conditions it operates in
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Through the PIA Corporation Conversion Ordinance, the government has repealed the PIA Act of 1956 – which remained a legal hindrance for the airline’s privatisation – and converted PIA Corporation into PIA Company Limited with immediate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 7th, 2015.
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 7th, 2015.