The pros and cons of privatization as well as the privatization itself of Pakistan International Airlines (PIA) have been debated to death, but the respected airline of yesteryears is still in public hands and haemorrhaging cash at breakneck speed. Earlier this month, it sought a bailout package well in excess of Rs25 billion to stay on track with a restructuring plan it was pursuing to smarten up ahead of privatization. This request was turned down by the authorities pending the preparation of a clear-cut roadmap to privatization. The state-owned carrier has lived on a steady drip feed of bailouts for years now, the latest of which came only this April and involved injecting a precious Rs15.6 billion from the national kitty into the ailing juggernaut. Small wonder then that the caretaker government is intent on expediting its privatization. To those wanting to argue that this is not the best time to privatize PIA: that’s true – the best time to do that was decades ago while the celebrated brand PIA still boasted some equity and the company’s balance sheets had some magnetism. As for those who would like PIA to remain in public hands, they are far outnumbered by the contrary point of view. What’s more, PIA is Exhibit A for why the government has no business to be in business.
In the hard-nosed world of business, the fear of failure helps companies keep their costs in check, their revenues flowing, and their balance sheets healthy. Being in public hands, PIA was immune from that fear. Being in public hands, PIA became the turf of some of the country’s strongest vested interests, with top jobs carrying mammoth salaries and perks being given away as booty without regard to the company’s financial health or the qualification or performance of the people being hired. Being in public hands, PIA was open to political influences of all kinds. Together, all these ills brought the national airline to a sorry state. Then came the ugliest debacle of all when former prime minister Imran Khan’s aviation minister Ghulam Sarwar Khan announced on the floor of the National Assembly in June 2020, incorrectly, that almost 40 per cent of our pilots had fake licences. Almost overnight, PIA was banned from North American and European skies. With the flag carrier virtually locked out of international business, the government hastened to award the prize routes left unserviced to foreign fliers. PIA and the Pakistani aviation sector are still struggling to climb out of that hole.
The caretaker government has now set a clear timeline for the privatization of PIA. Although the exact contours of that timeline are still under wraps, it is safe to say we are still months from putting PIA in private hands. The move itself is encouraging as it shows that the caretaker government is hewing close to the privatization plan put in place by the PDM government: at 76, Pakistan as a country is mature enough to keep strategic policies on track through political transitions. The need of the hour is to make the process transparent to help ensure that the company or any of its assets are not handed out in shady deals designed to benefit private parties at the expense of the state. The public should be able to see the book value of the company and its breakdown into its various assets. The enterprise that is being offloaded basically because it has become a huge drain on the public exchequer must not haemorrhage further cash during its selloff.