Tribune Take: Privatise the PIA, save billions
Farooq Tirimizi, the head of Business reporting at The Express Tribune, explains that the $600,000 PIA failed to pay Iran is symptomatic of larger problems faced by the national carrier.
He emphasises the need for privatisation of PIA because yearly bailouts of such state-run institutions cost the country billions.
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COMMENTS (14)
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My father was an employee of this airline and I have been following its decline for the past 40 years. I disagree that it is the airline of choice for overseas Pakistanis either in Australia, UK or America. The aircraft are poorly maintained and the crew lack the basic manners. Reality dictates that the airline be handed over to some other entity like Emirates which manages Sri Lankan airways as well. But I think that would be too much to swallow for the patriots who think that the airline is the national flag carrier when it in fact it is now only a debt carrier. It is only a matter of time before the whole fleet is grounded and the 20000 employees start looking towards the corrupt rulers to feed them. The motto used to be "Great people to fly with" which is what the airline now has, great people.
what a waste of money... the country canot afford these money sucking corporations!
PIA remains the first choice of overseas Pakistanis who prefer it over even cheaper fares from UAE based carriers such as Emirates or Etehad. I know my family would prefer to pay extra for a PIA ticket even when the ticket agents and travel agents here in North America trick passengers by telling them that PIA is full. They do this to obtain the commissions and kick backs given by other airlines. When an airline such as PIA is always travelling to more than half capacity- in many cases full, how could it possibly be losing money. The answer is not to privatise such an asset but to shake things up and get some foreign management to teach our people to set things right.
I think the only way to revitalize the PIA would be to rebuilt from its ashes. Make PIA implode and then have the private company take over its asset (not its employee) and rebuilt the airline from ground up with no government interference.
PIA is a true representation of Pakistan. The incompetence and corruption of the employs from top to bottom is eating it away. The sooner we stop keep putting money in a bottomless bucket the better it is. No one person from the top can change the whole attitude of all the employs. On the International route whenever I tried to buy a PIA ticket, there were no seats. However, through an agent there were plenty of seats available. During the flight there were many seats empty and it happened three times in the last several years. The cabin crew was very professional and helpful compared to the ground staff. I hate to say it but there is no option but to stop wasting money. In fact PIA, Railway, defense and likes are only a burden on the treasury and the money should be spent on public services.
The history is repeating itself. Once AirBlue was launched with the backing of the then PM of the country and PIA had to suffer, now Air Indus is on way and PIA is again in troubles. We need to understand the dynamics of Aviation today that even smaller airlines with much lesser payloads are flourishing, what has happened to PIA. Just two reasons, we lack the commitment as a nation and we criticise much easier than actually trying to develop the things. If we redo the man-on-craft ratio and bring them at par with international standards then certainly things will develop. The corruption is nothing but the reality, so we need to fight it. Aircraft is not a problem, because companies like Boeing and Airbus and even ATR, are very concerned with their international image and they cannot afford to get a bad name despite the fact that it is caused to them for someone else's deeds. PIA is our pride and privatization is not a solution. Government and governance does not exist in any sphere, so if the public advocacy can restore independent judiciary, then I am sure PIA can be restored too.
PIA's equity is negative by about 82 billion Rupees. This means PIA is not only bankrupt but its liabilities exceed its assets by 82 billion Rupees. So PIA can not be privatized unless Government of Pakistan is ready to pay 82 billion Rupees to the prospective buyers along with all PIA assets on its balance sheet. So who will buy PIA and why should he do that. Its not KESC which being a monopoly can recover its costs despite all its inefficiencies. PIA has to compete other very efficient airlines at national level and international level. Gone are the days when it was a monoply and therefore was in a position to raise the prices to remain a profitable company. It has no more captive clintale.
The fact of the matter is that no Government owned company can compete privately owned companies in managerial efficiencies. This holds good all over the world including Air India, Saudi Arabian Airlines, and Kuwait Airlines etc. Airlines in Europe, North America and Far East are operating in private sector. So why dont we adopt that model.
No matter what we do we just can not turn this airline into a profitable one, while it remains a Government entity. PIA lost over 9 billion Rupees in three months (July-Sept 11). It had lost 10,7 billion Rupees in first six months of the current year. Its total losses for the current year alone are expected to be close to 30 billion Rupees. This is many times our national budget for education and health put together.
Yes there are about 20,000 people whose jobs are at stake, but can this poor nation of 180 million hapless people afford to pay 30 billion per month to support 20,000 high profile jobs, while its majority lives in absolute poverty. Why dont we transfer all the shares of PIA to its employees and leave it to them to make it or break it, This will save the nation 30 billion per annum which may spend on health and education of the nation.
i'm certainly in favour of privatisation, pia have far too many overheads too much staff not saying they should employ staff its a good thing but they have to keep a balance, airblue has done very well they should maybe get some advice from airblue.
@Meekal Ahmed: If you dont mind your last sentence needs to be emphasised:
"That lack of political courage extends to all walks of economic life in Pakistan."
If they will privatize Steel Mill, PIA or Railways, where will they put there vote bank?? Ghulam Ahmed Biloor hired his voters in PR. The most amusing thing about this induction is that there are no rail tracks in the area from which these guys were hired and he confessed it openly on some talk show that he has to do it for his voters. A few months ago I was traveling from Karachi, at the boarding pass issue booth, there was a person, he was working with the speed of turtle on computer and took about twenty minutes to give me my boarding pass. His name was xyz Bhutto ( All i remember was his surname) so it was quite evident how he was inducted in arilines.
If any government will think about privatizing these companies, the employees, the ones inducted on political affiliation, will come on roads!
Privatise PIA,Privatise Qadar Pur gas fields etc. etc.We keep hearing such voices after short breaks.Tomorrow someone will say privatise Pakistan,it is running on loans from IMF & the World Bank.......nonsense.No one has raised a strong voice "change the incompetent
management, bring professional & honest people to run this beautiful organization".This airline can be turned around within six months,but vested interests do not want it.Somebody wants to buy this airline, gas fields & much more?Who is that somebody....find out? It is all politics.
And, pigs can fly. No pun intended!
There are a few -- but not many -- who have called for privatization for a long time. The first issue is whether we do so "as is" and lay oursleves open to the charge that we have sold the entity at "throw-away" prices, or whether, throwing good money after bad we restructure and bring them back to profitability and then privatize.
The latter will not happen. So that leaves us with the former option.
Let them go but then do NOT interfere with the new management (like we did with KESC). If 40% of the labor force has to be let go, they should be let go with a fair compensation/severance package. No one should be put out on the street, peniless.
Having said all that, this government will never do it and be labelled as "anti-labor". Nor will any other government have the courage to take such a drastic measure.
That lack of political courage extends to all walks of economic life in Pakistan.