Survival of the fittest: Is it the end of the road for PIA?

Privatisation or handing-over to employees; both paths are fraught with obstacles and risks.

KARACHI:

There is no denying that PIA is a mess  riddled with issues like surplus employees, extremely high employee-to-aircraft ratio, higher than average fuel cost, an ageing fleet, flight delays, flight cancellations and pilferage. But is privatisation the correct answer or should it be offered to the employees through a buyout? Or should there even be any attempt to revive the airline and instead it just be allowed to die out and eventually shut down if it cannot compete with smaller local, and bigger global players?

That PIA has failed to compete is true. It has been losing passengers on both local and foreign routes, to both local and foreign players for a while now. The Open-sky policy was a death knell for the airline and it has never managed to cope with the onslaught of competition. But there is no going back now. The day of the monopoly is past and protectionism can only lead to more loss for the national exchequer.

The ‘survival of the fittest’ approach can be considered a bit callous in the case of PIA even though it has been bleeding badly for years. PIA is still the only airline in Pakistan which will carry the body of a Pakistani who passed away abroad, back to his homeland free of cost. PIA is the only airline which has continued to run loss-making routes to smaller cities like Turbat, Panjgur, Dalbadandin, Gilgit, Chitral, Skardu, etc, because it is also a need of the people of those areas.



It is also a matter of pride for a country to have a ‘National Carrier’ and you can bet that many will be sad to see the name missing from our own airports, in case it does come to that.

But reasons like these cannot be used as a justification for carrying the load of almost 20,000 employees. The total number of pilots, engineers and cabin crew is less than 4,000, so why does the company need to have such a large work-force?

“The employees’ unions say that they should be given the responsibility and the opportunity to turn the bleeding enterprise around. They claim that they have the ability to achieve this with the basic idea being that they will bring fuel costs down but will not lay off any employees. The same employees who have been leeching PIA carrier for years, some for decades, now want to be given the chance to revive the airline. These same employees have used the backing of the powerful unions to cement their jobs and get lucrative perks and privileges. They might have the ability and the right plan to save the airline but do they have the sincerity? How can we trust them when they have at best, been silent spectators in the slow death of the airline and at worst, have been willing to gain every possible benefit.

The question becomes even more relevant when we take a look at the proposals being put forward by the employees and the management as part of their plan to revive the airline which suggest that jobs should be protected, at any cost.

Numbers would suggest otherwise. It is true that the if PIA goes through a huge lay-off, surge in unemployment numbers will be noticeable, but would it be helping the economy if the government keeps pumping in billions of rupees just to save a few thousand jobs?

Published in The Express Tribune, September 30^th, 2013.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.