PIA MD denies running on subsidies

KARACHI: Managing Director of Pakistan International Airlines (PIA), Captain Aijaz Haroon has said that the common perception among people that PIA is running on heavy government subsidies is totally unfounded and offered to resign if anyone proved that the national flag carrier relies on subsidies.

“We don’t get even a single penny in subsidy,” Haroon said in an interview to The Express Tribune.

“Whatever is being quoted in media that PIA gets billions in subsidies is wrong and politically motivated,” he said, adding “we are trying to capture more markets but most of our efforts are thwarted by political jingoists who see corruption in every move.”

Earlier on June 5, Finance Minister Abdul Hafeez Shaikh, in his speech for budget 2011, said three public sector organisations - PIA, Pakistan Steel and Pakistan Electric Power Company (Pepco) - eat up Rs235 billion in subsidies every year.

Discussing the open skies policy, Haroon said: “I am against open skies policy of the government. We cannot open up our market like Dubai, open skies can suit Dubai but not Pakistan as we operate in completely different circumstances,” he said firmly.

Even the stronger European airlines protect their flag carriers through various means. “In aviation industry, your product is your seat which airlines sell in the market. If you allow foreign airlines to operate freely in your country, you will lose a slice from your own market,” he added.

“Look at the Sialkot-Dubai route, we sought permission from the Dubai government but we were not allowed to operate on that route. Why should we allow airlines of those countries who limit us in their skies?” he asked.

Haroon brushed off the talk that Gulf airlines have grabbed 80 per cent of business from Pakistan. “The percentage is actually around 52 per cent, but it is still high because of the reason that these airlines mainly carry those passengers who want to fly beyond Dubai to other continents,” he said.

On the entry of low-cost airlines into Pakistan, Haroon said: “We are not afraid of budget carriers. We know we can compete with them with our quality.”

Haroon was of the view that the idea of low-cost airlines will not succeed in Pakistan. “Since most of the people who visit Dubai go for shopping or are job there, they carry huge luggage and PIA suits most of these passengers as we allow more luggages compared to the other airlines.”

In the case of budget carriers, passengers have to pay for everything extra they carry and they will have to pay additional money for heavy luggage as well, he added.

“Low-cost airlines are more in competition with private airlines compared to PIA,” he pointed out.

When asked about PIA’s restructuring plan, Haroon said the management is taking all possible steps to improve its financial and operational sections.

Replying to another question, he said they have plans to start long-haul flights and cited the example of new flights to the US and Europe. “Many a times we have to restrict us owing to financial problems and logistics,” he added.

Regarding PIA’s fleet, he said “at present we have 40 airplanes, but we intend to increase our fleet, however, financing is a major hurdle.”

Published in The Express Tribune, July 3^rd, 2010.