PIA — a hard sell

PIA’s competitors will have a field day as passenger traffic is diverted in the event of flight disruptions

Proclamations of patriotism always appear to jump to the fore whenever there is talk of the government selling stakes in any state-owned entity. Years of corruption and inefficiency are instantly forgotten and reasons for the downfall of the entity ignored. The case of Pakistan International Airlines (PIA) is not too different as can be seen in the three-day strike of the national carrier’s employee unions against the government’s decision to privatise it. One cannot ignore that many of those who are employed in state-owned entities often want to preserve the status quo and the sense of job security they have and there is often little motivation to perform. But when the government finally wakes up and decides to take remedial steps, one is met with the kind of scenes that were witnessed outside PIA offices, with the employee unions forcing the back office to suspend work. They are now targeting the disruption of flight operations from February 2 if their demands are not met.



The government has been looking to sell stakes in PIA for a while now. It will write off liabilities — assume its burden — before selling a chunk of its holding to an investor. PIA has incurred heavy losses in the past few years and consistent bailouts have done little good. A restructuring process began through acquiring several aircraft and the introduction of an aviation policy aimed at creating a more liberal environment for investors. The Joint Action Committee of PIA Employees was irked when that happened too. Unable to turn the fortunes of PIA around on its own, the government is now banking on an external entity to do the same. While one can understand the reasoning behind its decisions, the government did botch up this entire process by failing to create any sort of consensus in parliament over PIA’s privatisation, with there being little transparency in the way legislation related to this important task was passed. The disruption of flight operations is now on the horizon, and negotiations will only take the authorities so far. They will either have to incur a huge expense to ‘satisfy’ employees or retreat from their stance to privatise the entity, which the IMF will not look at too kindly. Meanwhile, PIA’s competitors will have a field day as passenger traffic is diverted, giving them a chance to increase airfares. The interests of the flying public be damned.

Published in The Express Tribune, January 29^th,  2016.

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