Life support for PIA

It makes no sense to keep pumping in money without first ensuring PIA goes through a process of economic cleansing.

The Economic Coordination Committee has just approved Rs100.5 billion as a bailout package for the Pakistan International Airline (PIA), to allow it to buy more aircraft and also have some fiscal breathing room. Apparently, the bailout was approved along with a provisional business plan. There is a sense of pride in having a national airline along with a sense of reliability that a government-backed service brings, which cannot be expected from private enterprises, which are bound to keep financial interests foremost.

But while it makes sense — and is in the public interest — to keep the airline up and flying, it makes absolutely no sense to keep pumping in money without first ensuring that PIA goes through a process of economic cleansing. In a recent edition of the Financial Times’ global financial indicators, Pakistan managed to make the list because PIA has the highest employee-to-aircraft ratio in the world, at 485. And this figure is not even the full picture of the rot at this institution, which has been on life support for many years now. This does not include contract pilots, flight engineers, aircraft engineers who have been rehired after retirement and other contractual staff; otherwise, the ratio jumps to almost 600 per aircraft. Moreover, this number is based on the total fleet strength of PIA, which is 42, although only 25 planes are serviceable.

PIA also pays a guaranteed tax-free flying allowance of 70 hours to its pilots although their average utilisation is about 40 hours per month. It is surprising that a 45 per cent pay increase has been proposed for PIA staff, across the board. Apparently, the pay increase has not been approved yet, but the very fact that it has been proposed or even considered is a brazen act, considering the fact that the corporation is literally begging for handouts. If this is what the provisional business plan, designed to make PIA financially viable, entails then, why does PIA deserve Rs100 billion of the taxpayers’ money?

Published in The Express Tribune, March 1^st, 2013.