The Pakistan International Airlines (PIA) expects the government to use the upcoming budget to settle its long-term liabilities once and for all in a bid to help revive the ailing carrier, a top official told The Express Tribune.
Islamabad also has the option of taking over the PIA-owned Roosevelt Hotel in New York and Scribe Hotel in Paris against settlement of the airline’s loans, said Junaid Yunus, the managing director.
“I hope, I really hope that the government gives us something,” he said, talking about the prospects of the airline getting a bailout.
“Everyone has observed the keen interest that Prime Minister Nawaz Sharif has been taking in PIA. He has his eyes on everything - from the bigger problems to the interior of aircraft.”
But any bailout appears improbable since the government is working under strict International Monetary Fund’s conditions to cut its expenses, especially expenditure on public sector enterprises.
Nevertheless, Yunus says restructuring the loans, which exceed Rs300 billion, is imperative to pull out the airline from its financial troubles. “All the debt is having a snowball effect. We borrow more to settle past loans every year. It’s a terrible trap.”
He said the suggestion to use the airline’s real-estate property was his own. “I personally think some sort of arrangement can be worked out. Maybe institutions like EOBI (Employees Old Age Benefit Institution) can be used to finance such a deal.”
PIA pays billions of rupees every year in interest payments, shrinking its limited margins. The loans also require seeking government guarantees as banks are reluctant to lend the airline on basis of its balance sheet, which carries a negative asset base.
However, Yunus is hopeful of a turnaround and pointed at the stunning improvement in finances during the first (January-March 2014) quarter, which saw the airline cutting its net losses by 77%.
“We have improved performance, timing, operations, and schedule just by inducting four aircraft on wet lease. You can imagine what we can achieve if we get the 12 dry lease aircraft on time,” he said.
Tenure for the four Airbus 320s and Boeing 737-800 aircraft, which were wet-leased in December 2013, ended this week. The airline is looking forward to include two A-320s on a much longer dry-lease over the next few weeks.
But PIA still requires government support to have the desired number of at least 10 planes, which it sees are needed to claw back the passenger traffic it has lost in the last few years.
“The last few months have been good for us. Our planes have flown jam-packed,” said Yunus, adding that the airline was strictly following the policy of carrying out detailed studies of PIA’s routes.
The airline’s management is considering adding Los Angeles as an international destination on its network, Yunus said.
New look for the 310s
PIA has recently added 12 club seats each of its six A-310 aircraft. “We were seeing a demand for luxury on certain routes. So we have included these leather seats. Carpeting and other things are also being changed.”
The national airline has vowed to improve its product offer by adding facilities like Wifi, and phone service to gain customer satisfaction.
Published in The Express Tribune, May 31st, 2014.
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If you want to change your national airline and other government institutions then leadership should be honest. If you want to change in PIA's service and other thing with same leaders then you are wrong. All government institutions which run under government having lack of service. So think in a broader way not only critisize PIA change your country in good manner. in private sector have also corruption media also foucus on them. Too much debit on your country same on PIA so first change your country then institution automatically change.
Although PIA have their short comings but it is not as bad as what media and the People above have potrayed.We got to keep this in Mind PIA is a national airline of a third world country and comparing it with airlines of other third world countires its A lot better. I m a frequent traveller and have travelled on EK,BA,MH,AF and GF and believe Although PIA lag in onboard luxuries and all but their cabin staff are generally very good and always willing to go out of the way to help people its generally the ground staff and the senior management who needs to pull up their socks.i still remember during the Musharraf Era the airline was progressing and i was really hoping that if things go well PIA will once again be standing on its feet but alas both PIA and Pakistan Have gone into a nose dive in the last 7 8 years
I travelled through Emirates, gulf air lines as well as PIA and found no differences in quality of service. PIA is not as bad as being portrayed in media.
There is high demand that PIA start direct flights from Glasgow and Birmingham UK best route would be Glasgow-Birmingham-Karachi and then ending at Lahore....Pakistan...with return Lahore-karachi-Birmingham and ending in Glasgow.
Thank You PIA.....UK Needs You
PIA should have kept Leeds Bradford demand was there and high...as you know ! ! !
@uzair: Vancouver is not a profitable route. PIA cannot even break-even at profitable routes, such as to Dubai and to New York. So, how can it contemplate flying to Vancouver, an out of the way, isolated destination? Thus even Emirates, which does not care too much about profits and is a profligate airline does not fly to Vancouver. I would fly to Seattle and change the plane to Bellingham, WA, then take a bus home.
From the looks of things most people commenting here are at most occasional travelers. As someone that commutes on three times a week I can say PIA has definitely improved in the recent past. I have seen cleaner aircraft and a more punctual service.
International flights offer the convenience of direct connections and I only wish there were more destinations. My time has value and I am not going to waste 4 hours or more at a ridiculously over priced duty free every time I travel. I have travelled on other airlines and I have had the horrific experience of delays of more than 12 hours with the likes of etihad and emirates. Their crew however is more presentable than that of Pia but after a while I prefer to fly with those I can connect with.
It goes without saying Pia must have its share of political employees and things need to improve however they have done so in the last year or two and I wish this airline the best. After all it's my national carrier.
PLEASE add vancouver canada. We don't have emirates, no eithad, no any middle east airlines. closest is seattle with only emirates, and that too is high price due to good load. Someone tell PIA management please
fire all the employees appointed by political govt.without merit,stop free tickets to parliamentarian, million of money was given as arrears by PPP govt.when reinstated the ex-employees.
@Muhammad Rizwan Ali, "being a Pakistani, we should encourage to travel by National Airline…."
When is the last time you traveled on this dreadful airline?
I travelled to Islamabad from UAE on pia last month after a gap of almost four years. Things have gotten worse. Flight was delayed by six hours. The passengers mainly blue collar labourers got stranded at the airport. No information was provided initially as to what was the cause of the delay. Later on after some screaming from the passengers, the staff told us that due to lack of aircrafts, the flight has been delayed. It was more of a circus. I say this with confidence that a fish market is managed better than a pia counter. Some VIPs were given the same special treatment. Their luggage was carried to the weighing counters by one " courteous" staff. They were given seats on a pia flight leaving from the same airport to Karachi even though they were traveling to Islamabad. There is no improvement infact things getting from bad to worse and these parasites have the nerve to the tax payers to pay their liabilities. Please don't bail them out. This airline deserves no bailout packages. They are working on the same mentality and arrogant attitude that have sunk them and there is no ray of light. They have lived long enough on false pride and making a fool of themselves and us, the tax payers. Please shut it down and by doing so we will save billions that are spent on the luxuries accorded to the " good for nothing" staff members. With the death of this white elephant, one thing is going to die for sure ,at least in this organization, and that is rampant corruption and mismanagement. Na rahe ga bans....na baje gi bansri. So long pia.
I don't hear anything from the managing director that they are cutting this bloated air line. There are thousands of political appointees who are the most incompetent people around and they are dragging the air line into the ground. Make it lean and mean air line and it may just take off and stand up on it's own. It will be stupid to get rid of Roosevelt and Scribe hotels, as a matter of fact it should be leased out or let some profesionals run it. I have seen during PPP regimens when these political lackeys will get together at Roosevelt and mooch off lunches, teas and dinners., IF the government takes over then surely it will be auctioned off for pennys on the dollar because they run every thing else in the ground, beside incompetence, their mega corruption from top to bottom is known worldwide.
The Pakistan International Airlines (PIA) expects the government to use the upcoming budget to settle its long-term liabilities once and for all in a bid to help revive the ailing carrier, a top official told The Express Tribune. This is true, really if PIA settle its liabilities, PIA may again get their popularity and become in the list of good Airline, Very Good Article by Saad Hasan, being a Pakistani, we should encourage to travel by National Airline....
States should never be in the business of running businesses.... it seldom works... look at sri lanka... they sold key stake to Emirates and my Sri Lankan friends love the service on Air Lanka
I used the service from London to Islamabad and return, unfortunately the only thing going for it is the flight time 7 hours and 30 minutes either way apart from that it was pretty bad, so bad that I actually took food on the plane with me on the way back to stop my self starving. I asked the steward for a pillow he replied I'll try to locate one, while I reminded him that this was an international flight, he replied yes but this is PIA! I've no intention of returning too soon to Pakistan, but shoud I need too I'll use one of the Arab carriers, much better service.