PIA gets new CEO as it braces for privatisation

Pakistan’s flag carrier, Pakistan International Airlines, has appointed former Air Vice Marshal Muhammad Amir Hayat as Chief Executive Officer (CEO) for one year, a PIA spokesperson said on Thursday. This week, the outgoing government said it planned to privatise loss-making PIA, which has accumulated hundreds of billions of rupees in losses and arrears. The move would be in line with an International Monetary Fund (IMF) deal. Hayat had been the acting CEO since April 2022, after the former CEO’s retirement. The government could have appointed Hayat as CEO for three years, but the prime minister decided to appoint him for one, said PIA spokesperson Abdullah Khan. PIA hopes to resume flights to the United Kingdom in the next three months.

Services have been suspended since 2020 amid a pilot licensing scandal. Pakistan agreed to fiscal discipline plans as part of a $3 billion arrangement with the IMF, including the privatisation of loss-making assets. PIA is Pakistan’s top loss-making entity whose total cumulative losses have increased to Rs742 billion. According to a story published in The Express Tribune, PIA suffered a loss of Rs110 billion in the one and a half years of the current government’s tenure. The total loss for PIA last year was Rs80 billion, and this figure is expected to rise to Rs112 billion. This week, the Cabinet Committee of Privatisation (CCoP) also backed the hiring of a financial adviser to process transactions involving the Roosevelt Hotel in New York, an asset of PIA Investment Limited.

The CCOP took this decision after turning down a move by the Aviation Ministry to bring the Roosevelt Hotel in its fold by initiating its restructuring proposal through the Public Private Partnership Act. Finance Minister Ishaq Dar chaired the CCOP meeting. Pakistan has already leased the Roosevelt Hotel to the New York City government for three years at a nominal rent. Roosevelt Hotel Corporation (RHC), New York, is owned by PIA-IL, a subsidiary of PIA.

The CCOP was informed that Pakistan can regain possession of the hotel from the New York City administration after one and a half years, and by that time, its privatisation process can be completed.

WITH ADDITIONAL INPUT FROM REUTERS