With the Supreme Court set to hear the case regarding the poor performance of Pakistan International Airlines (PIA) today (Tuesday), the national carrier submitted a report to the court on the reasons of its losses and mismanagement over the past 20 years.
Elaborating on the reasons for the losses and the current management’s efforts to cope with the challenges, PIA presented a comparison between profits and losses from 1991 to 2012 in its reply.
Chief Justice Iftikhar Muhammad Chaudhry, who will head the three-member bench hearing the case, said the apex court will hear complaints on the poor maintenance of the carrier’s aircraft, including petitions filed by PML-N Secretary General Iqbal Zafar Jhagra and Marvi Memon.
Besides technical reasons, it stated that a large number of delays in flights were due to bird hits, which numbered 67 in 2011.
Losses worth Rs119.84b over last 10 years
Over the last ten years, PIA suffered losses worth Rs119.84 billion. Its report said that the internal challenges faced by the airline included an ageing fleet resulting in excessive fuel consumption and high maintenance costs, fragile financial health, especially due to debt servicing and delays in flights due to a prolonged and unscheduled ground time.
PIA stated that the national aviation policy of providing excessive grants of traffic rights to Gulf airlines and low-cost carriers, the geo-political situation of the country, depreciation of the rupee, fluctuating fuel prices and competitive regional markets presented external challenges to the airline.
At present, PIA has 17,227 employees and the total monthly salary of its staff amounts to Rs1.16 billion, which on an annual basis works out to be 12% of revenue earned in 2011. It has a total number of 38 aircraft in its fleet and the ratio of employees with respect to each aircraft is 453.
The reply said that out of a total of 10 grounded aircraft, seven were unscheduled (due to incidents such as bird hits). This includes two aircraft which are permanently grounded as per the decision of the board of directors of PIA.
PIA also complained that while Pakistan was liberal in granting traffic rights to other carriers, advanced nations were being protective about their markets and denying PIA the opportunity to increase its flights to such countries to protect their own airlines.
It added that due to the unilateral freedom granted to foreign airlines, more than 7 million passengers from the years 2009 to 2012 travelled on foreign airlines operating in Pakistan. A majority of these passengers were not flying from Pakistan to the home base of those airlines, but were flying to other destinations such as the United Kingdom and US where PIA operates direct flights from Pakistan, causing losses in revenue.
Published in The Express Tribune, December 4th, 2012.
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