PIA Under Fire — A Jawbreaker for the nation

As we take the journey through time and space, we celebrate the great people that fly our national carrier while missing out on the greatest hits and misses that shape one of the biggest epic tales that remain untold. PIA s devastating loss making journey has intrigue, action & shocks. Some take it up as inspiration while others biting their tongues within their teeth but most have simply used this organization to their personal advantage and motive. But like any other Like epic , PIA s story has its share of adventures and horrors with one of the greatest stories and a historical decade of Pakistan s dynamic aviation industry , its rise and its fall.
In the midst of multimillion-dollar losses and accusations of large-scale corruption at Pakistan International Airlines (PIA), Pakistan’s recently elected prime minister Nawaz Sharif has appointed a committee to restructure the country’s once proud national carrier. Will this be the game changer or is this not enough to save this airline, one of the biggest loss making corporations in the history of the country. While some claim that PALPA board members have now minting money with fat bonuses and pay rises , others claim that there has been significant transparency within the past 5 years. Impossible to believe ? Well, take a pick.
According to one of the board of directors, PIA is just like any other airline with problems that can be rectified and that it has been hurt by the global economic recession and high jet fuel prices. In addition, the company has to make do with a limited number of airworthy planes – of its fleet of 42 planes, only 24 are operational, and the rest are grounded because of technical problems. PIA s stands at 1.1 billion dollars in revenue today, being the highest in the past five years , taking up 340 million in losses this year, as overall trading profits falls by a massive 4%.The mounting deficit has also wiped out the shareholder capital and the airline currently has a negative equity of $1.6bn. The airline, has been buckling under losses for years, caused by mismanagement that included overstaffing, fewer flights, a decrease in revenue and market share, and it is plagued by allegations of corruption and nepotism, despite an 87% government stake in the entity and this does not speak well for this government or the last few, to say the least. Well informed sources from within the airline tell a different story. An ex- managing director claims that a massive due diligence exercise has taken place.
As quoted “ Had we been able to continue and our business plan implemented then PIA would not have been where it is today. The other day I was watching a program food street on 14 July in which President PALPA was complaining that nobody has given PIA a business plan or a fleet plan. It’s an irony that We had submitted a Business Plan and a Fleet Plan 2010-2014 to the Government and all Unions/Associations were fully aware of this but yet after my resignation they scrapped that plan because it did not serve their interests”.
Sensationalism has always been the forefront of PIA s managers over the years. The theory holds correct, though we also cannot ignore the fact that the government recently this year gave a package of PKR 100 billion, something that was not there in the past when the airline managed everything from PIA’s own resources in terms of loans. It is pertinent to note in 2010, the long term liabilities of the airline reduced from PKR 105.4 B in 2009 to PKR 98.5 B in 2010 which was achieved through stringent financial discipline and effective cash flow management. Yet still, not good enough.
The past management has also made significant claims including making some drastic strategic decision for the benefit of the airline, like increasing pensions for retired staff and their widows, establishing employee children, quota for jobs, reducing the lifetime travel facility of the BOD s , not bowing down to unfair demands of the union staff, and further reducing the number of directors from 13 to 9 , while cutting down GM s slots from 58 to 51. They also claim that the record breaking revenues of Rs 107 billion was achieved through the record breaking hajj operations in 3 years from 2007 to 2010, raising revenue from 70 billion rupees onwards to profitable avenues whereby PIA also crossed 100 million Sterling revenue mark in UK.
PIA claimed revolutionary success in streamlining their flight operations as well, by bringing flight service and cockpit operations under one director as a cost save, eliminating manual flight detailing reducing union involvement and wastage, setting up state of the art central control operations which reduced cost of foreign stations by ending all foreign postings of operating staff, replacing dispatch riders by mobile phon units to all cockpit crew for better communications and highly improved T&D through 777 simulators , thus reducing overseas staff travel and training costs leading to a major foreign exchange savings and better crew utilization. Their claim to fame remains to be the highly successful ISO ( INTERNATIONAL ORGANIZATION FOR STANDARDIZATION) 9001 certification in Marketing & Sales, Flight services, Flight kitchen, Training centers and for all CSR building stations.
There is a certain market reputation that every company enjoys. Unfortunately, PIA today is under fire for all the right reasons. Jobs are there but not available on merit but on internal influence, perks are there but are not allocated efficiently as people steal inside of the organization , whether it is the managing director of the flight kitchen crew. A major restructuring drive is the need of the hour. Unless political pressure is overcome by conventional wisdom and management discipline, we might end of washing our hands off PIA in the long run, with colossal losses and incompetence .
Truth or dare is debatable. The political clout that surrounds PIA needs to clear their side of the story. Losses have not been recovered and the new board has yet to make an impression on a macro level. While there are hopes to change the dynamics , how long will the powerful continue to steal off the airline, through hidden means and pressure tactics. This government needs to have an open mind and decipher the truth behind the big claims or should I say : little big lies. PIA is call for action – a successful recovery or a colossal loss to be borne by this poor nation. The findings will be a jaw breaker. Will it be fair this time to the country or will PIA eat up all the revenue through corruption of the elite , yet again . Time is bound to tell the ultimate story and its next chapter.

Zeeshan Shah – writes on IR & Public Policy – is a banker and media broadcaster