Flying under debt
Let’s get down to the point. The Pakistan International Airline (PIA) is broke, bankrupt and practically extinct. This latest episode of the PIA crisis sequence has taken an ugly turn: the week long protests have brought down the entire fleet which has incurred extra millions in losses.
The standoff between the government and PIA staff seem irresolvable: government’s heavy handed approach has apparently backfired with situation engendering much more attention than anyone may have anticipated. A few days ago the government imposed the Essential Services Maintenance Act 1952 to pre-empt the protesting employees from any dissent against the privatisation decision with serious warnings ranging from prison to loss of job.
Seemingly, the plan has not worked: with three people dead and scores injured, situation has become highly emotionally charged. Opposition parties are sniffing around the crisis in order to find new sources of agitation: many political parties have joined the race of urging the government against the privatisation move despite the fact that the National Assembly, a week ago, passed a bill to convert the national flag carrier into a public limited company.
No one is sure whether the IMF has pushed the privatisation plan down government’s throat or the latter’s own inability and incompetence to run it successfully has induced this situation. Regardless, one can question the government’s motivation behind the privatisation move but arguably it’s the only realistic solution at hand to salvage the national carrier from bankruptcy.
Privatisation should go ahead but not like this. The current government is quite famous for lacking necessary skills to handle a crisis situation. The problems started with a small situation; in fact, it was more a problem than a crisis. With privatisation, the PIA staff fear losing their jobs, which they fear mean losing their livelihood; and rightly so. It would have been more prudent if the government had taken the protesting staff into confidence about their possible role in the PIA’s evolution. Levelling threats blatantly without offering appropriate alternatives to the concerned people also reflect government’s inaptness.
It’s tragic to see PIA – an airline with a legacy and an era of its own – go through this implosion and decay. Dr Pippa Vidree, professor of modern South Asian history at the De Montfort University, recently authored a research paper on the role of women in PIA, titled, “Great people to fly with: PIA and emergence of modern women”. I had an opportunity to talk to Dr Pippa about what led to the downfall of PIA and whether the privatisation can save it.
Dr Pippa maintains that “from being one of the most successful companies in Pakistan, PIA over the years has become one of the worst performing state-owned enterprises. It is unproductive compared to other airlines in the Gulf or even Turkish airlines.”
According to her, PIA – during its glory days – served as a role model, an innovator in the aviation industry but by the late 1970s, it had gradually become burdensome on the state resources.
She argues that two things impacted the airline profits: “firstly the break-up of Pakistan in 1971 led to loss in traffic with East Pakistan. Secondly, PIA became more concerned with the diaspora market (flying to the Middle East and Europe) and adopted a more “Islamic” marketing approach; previously it was catering to the international market.”
She further noted that “the increasing costs of maintaining the national carrier in an era when other airlines are being privatised and streamlined, PIA could not compete.”
She reinforced the need for privatisation by saying that “the aviation industry is highly competitive and PIA will need to change radically if it is to stand a chance of surviving in the overly crowded market place.”
Moreover, political appointments from top to bottom and professional inefficiency – which reflects in all spheres – have also resulted in its operational degradation. Reportedly, number of people employed with the airline is far more than necessary to run it properly.
Apparently, after it fell into misfortune, no government has ever earnestly attempted to restore its previous status of being a successful enterprise; rather the focus has remained on keeping it operational as long as it does not rise to the level of absolute bankruptcy.
Many fear the government’s privatisation move is just another knee jerk reaction to the situation (the IMF has been pushing vehemently for the privatisation of PIA, among other national enterprises which have been generating losses from years).
Privatisation should take place but in a fair manner and after having done comprehensive evaluation of the entire situation; and it needs to address concerns of the current employees – not through violence and coercion but by adopting more practical and civilised means.
PIA has been flying under debt for many years and unless it is privatised, modernised and maintained professionally, it stands on chance of surviving as a national carrier. Let’s honour it by restoring its lost status of “great people to fly with” again.