PIA debt hits Rs406b, running only on govt support: report

Poor HR practices, unions, inept leadership main factors behind losses

ISLAMABAD: The total liabilities of Pakistan International Airlines (PIA) has reached Rs406 billion against its assets only Rs111 billion.

The national carrier submitted a comprehensive report in a suo motu case regarding irregularities in the department, wherein it is stated that PIA has accumulated losses of Rs356 billion including the loss incurred in 2017.

“The balance sheet is now very weak with total liabilities amounting to Rs406 billion against assets of only Rs111 billion. Today, PIA is only able to continue operating due to the government’s financial support,” says the report.



It is also informed that the company has been operating most of its routes on losses, has far too many employees for the size of operations and has lagged in the current business environment while its business model and operations are not capable of making profits.

Last year PIA was incurring losses, a number of aircraft grounded, suffered from demotivated staff, political interference, revenue leakages, and little if any interdepartmental coordination, the report highlights.

The report submitted to the SC also read that the national airline lacks the capability to improve its performance given core competency gaps in the whole organisation including the senior executive leadership. Reasons identified include political appointments and extremely poor HR practices while PIA as an organisation operates like an outdated government department rather than a modern business.

“Unions and associations have perfected tools to obstruct management drives at revival with malice”, adds the report, stating that PIA is heavily burdened with unions and they should not be allowed to interfere in the management process.

The report further identifies that unions are also negatively impacting in daily operations by influencing employees to ‘go slow’ when they wish to apply pressure to the management. Recently, they have been carrying out a maligning campaign to thwart efforts to clean up HR practices.



The court was requested in the comprehensive report to allow the incumbent management to undertake and commence recruitment of relevant and appropriate officers and employees to ensure efficient working of the airline’s affairs. PIA also pleaded for staff unions to be restrained from acting against the interests of the company.  Likewise, it was also requested to remove the name of the company’s CEO from the ECL.

The airline also requested the top court to permit it to adopt the markhor as a symbol of the airline's revival.