Talking to The Express Tribune regarding the proposed agreement between PIA and the Turkish Airlines, he said that the airline’s 22,000 employees have been carrying out protests over the proposed agreement, adding: “We want to protest before the pact is signed. If we delay it, they will turn around and tell us that the pact has already been signed.” He was asked why there was such a fuss when no agreement has yet been signed.
PIA signed a memorandum of understanding (MoU) with the Turkish Airlines on December 29 last year to share their passengers for Europe and Asia flights.
Baluch said that by entering into this agreement, PIA was giving up all its profitable routes to Turkish Airlines. “Our New York and Chicago routes, the only two flights to the US, are very profitable,” he said.
He said it would be hypothetical to say that this pact would increase PIA’s profits by over 50 per cent. Experts believe the move may only increase profits by a mere five to six per cent. “We want to expand this airline, but this pact will only shrink its operations.”
“If this agreement was in the interest of the airline, I would be the first to endorse the proposed pact,” he said, adding: “I don’t think the PIA management wants to listen to us, even though we are ready to discuss the issue with them.”
PIA recently sent show-cause notices to the president and general secretary of Palpa and sacked six pilots.
“Palpa is a professional body and it is not involved in dirty politics against anyone. We are not going to play into anyone’s hands. We are just doing what we think is in the (best) interest of the national carrier,” Baluch said.
The managing director of PIA recently said that gulf airlines take PIA’s annual traffic from Pakistan up to Rs35 billion. If both airlines enter into this agreement, and if PIA reclaims only 10 per cent of the Rs35 billion market, it will make Rs3.5 billion by increasing its flights to the US and Europe.
“If this is acceptable, then why not allow the Turkish Airlines to fly directly from Pakistan rather than taking our passengers from Istanbul,” he added.
Agreeing with the PIA managing director, Baluch said: “Yes, the Gulf-based airlines are one of the many reasons behind PIA’s woeful financial performance over the past two decades.”
He, however, disagreed with the managing director, saying that the pact would take back PIA’s business from the Gulf-based airlines. “I think more people will travel via the Gulf-based airlines because PIA flights will go through Istanbul with an additional stop there.”
He also disagreed with the proposal by the PIA management to buy new aircraft and inject new equity into the airline. “What we need is to gradually cut the losses of this airline. If we inject equity in PIA, then any Tom, Dick and Harry could run this carrier.”
Talking about how PIA’s losses could be reduced, Baluch said the airline’s management could restructure the loans that it took out for the 777 aircraft, however, he added, no one seemed to be taking up the matter.
Baluch said that the large number of employees in PIA was not the reason behind the airline’s woes. He said the share of employees’ salaries in other international airlines’ budget is 30 to 35 per cent, but it is just 15 to 20 per cent in PIA’s case. “Incompetence is the main reason behind PIA losses, not the number of employees,” he said.
Published in The Express Tribune, February 11th, 2011.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ