Govt uncertain on fate of newly-formed Pakistan Airways

ISLAMABAD: A high-level meeting chaired by Prime Minister Nawaz Sharif remained inconclusive on the fate of newly established Pakistan Airways as the ministries were uncertain on whether or not the company would be a new entity or subsidiary.  

“We need one to two weeks more to finalise spadework as without charging any penny the Finance Ministry has established a company ‘Pakistan Airways’ with an authorised capital of Rs100 billion,” Minister for Finance Ishaq Dar told reporters on Monday.

However, the sources said Pak Airways is altogether a new entity and it requires at least one year to kick-start its operation. But, earlier the PM was told that the operation would be possible in three months. “There are PPRA (Public Procurement Regulatory Authority) rules which need to be followed,” a source said.

On other hand, if the airline becomes a subsidiary of the Pakistan International Airlines (PIAC) it can be made operational. Therefore, sources said various models are under consideration to make Pak Airways operational as early as possible.

Earlier, Chairman Privatization Commission Mohammad Zubair said the government is close to the PIA’s privatization, which has been pending since 1991.

“Please grant us powers like private sector if you want to achieve turnaround in PIA,” Zubair said, addressing a seminar organised by the Policy Research Institute of Market Economy.

The seminar was titled, “PIA – Restructure, Reform or Privatise: The Way Ahead.” 

The speakers called for PIA privatisation to cut losses, increase jobs and improve the service quality while ensuring effective regulation, more transparency and minimum political intervention.   Zubair, who is also the Minister of State for Privatization, said PIA never reported a profit since the last 30 years, barring a few years, and the performance evaluation system in the airline is absolutely absent.

The minister, recalling the golden age of PIA as a leading airline of the world, said in the past the management enjoyed complete autonomy, which led to its superior performance. 

He said reform and restructure will not work unless political interference is not removed. Privatisation will bring difficulties in the short-run but this step will be beneficial in the long-run, he added. 

He said employees should be looking for growth, not just retention of the same job, which is why job growth is more important than job retention. “If the organization is not growing, the employees will naturally not grow,” Zubair said. 

He said there is not a single penny in PIA’s employees’ gratuity fund, forcing the corporation to borrow funds from banks for severance pays.

Idrees Khawaja, Associate Professor at Pakistan Institute of Development Economics, said though privatisation is necessary it should be understood that it should be done for the right reasons.