PHOTO: FILE
A special audit has been ordered to ascertain the reasons for the national airline’s revenue plummeting over the past few years despite increasing its fleet.
Public Accounts Committee (PAC) Chairman Khursheed Shah directed the auditor general of Pakistan on Thursday to submit an audit report on the ailing Pakistan International Airlines (PIA) within a month.
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In another directive, the committee asked the PIA to provide them with portfolios of the airline’s board of directors.
The officials told the PAC that the revenue of the national flag carrier was Rs94.5 billion in 2009, Rs107.5 billion in 2010, Rs116.6 billion in 2011 and Rs112.13 billion in 2012.
“Fuel cost was higher and fleet was smaller, but the revenue was on the rise; but what happened in 2013 that the revenue took a nosedive to Rs18-20 billion, when the PIA had more planes?” said Shah.
PIA Corporate Planning Director Amir Ali said the PIA at that time had fuel-guzzler, wide-bodied planes, adding that “our load factor has increased, though yield has decreased”.
The justification could not satisfy the PAC and the chairman challenged the officials saying the current fares were higher than 2010. “Why would people travel by PIA when airlines like Emirates are offering cheaper tickets?”
Shah also drew an interesting comparison of food and cabin-crew behaviour between the national flag carrier and leading international airlines. “The PIA, like other airlines, might be spending 2% on food, but what do you give us: some rice? But others serve whisky, champagne, gin, Irish coffee, etc.”
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The ruling PML-N’s Sheikh Rohail Asghar asked whether good behaviour of the cabin crew also “cost you money”, as he pointed out “you cannot get a second glass of water in PIA, and there are no blankets”.
The PAC chairman and members of the committee also raised questions about the PIA’s business plan.
Though others were sceptical about a turnaround, Shah had high hopes: “I guarantee that the PIA would once again become profitable — if its debts are cleared.”
The committee was told that the PIA had liabilities of Rs320 billion, and equity had turned negative by Rs179 billion.
The PAC was in a state of disbelief when the PIA officials informed them that the total worth of the airline’s assets in the country, including land and buildings, was a mere Rs8.72 billion.
The estimate is based on an evaluation carried out in December 2004, and does not include the infamous Roosevelt Hotel in New York and the one in France. The value of the PIA’s fleet was Rs64 billion in 2014.
The PIA chief financial officer’s revelations immediately prompted the lawmakers to challenge the figures.
“This is wrong, and not a realistic value,” said PPP’s Dr Azra Pechuho, whereas PTI’s Shafqat Mehmood referred to a PIA property in Lahore and said it was worth Rs6-7 billion.
The PAC was also informed that PIA had 14,704 permanent and 3,500 contractual employees, as well as 57 general managers and 19 directors.
Though pilots are given handsome packages, over a dozen pilots are earning more than Rs1 million a month. Chief Legal Officer Waseem Bari Saleemi receives Rs2 million in benefits on top of his salary.
Published in The Express Tribune, March 11th, 2016.
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