PIA’s restructuring signifies unabated privatisation process

Karachi: The state-owned Pakistan International Airlines (PIA) is currently undergoing a considerable restructuring in its organisational setup in an apparent push by the government to go ahead with its planned privatisation of the loss-making carrier, The News learnt on Saturday. 

Recently, a number of orders have been issued to counter the financial mismanagement as well as a possible opposition to the selloff by the employees.

As a first step, the PIA management notified changes in the reporting relationship, and the enterprise resource planning (ERP) department has taken over the financial matters.  

“As a part of an ongoing restructuring process and for smooth functioning, it has been decided that revenue accounting, funds management and budget divisions of the finance department, presently reporting to the Chief Financial Officer will now report to the Chief ERP,” said Ali Akbar, general manager Organizational Development at the flag carrier.

The government intends to sell off 49 percent of its stakes in PIA.

Prime Minister Nawaz Sharif made the airline’s privatisation a top goal when he came to power in 2013. Soon after, PIA initiated a project to implement an ERP solution in order to achieve greater operational efficiencies and facilitate the realisation of growth targets, desperately required to turn the airline attractive for the buyer.

Privatisation Minister Mohammad Zubair, in an interview in May, said the government would start the soft marketing of the airline in June.

“We have to understand the market and what the market is looking for,” Zubair said. “We are looking for another investor; it could be an airline but doesn’t have to be, but we are just looking for one.” 

The fierce resistance shown by the opposition parties and labour unions to the privatisation turned the program politically-sensitive.

The airline extended the imposition of Essential Services Maintenance Act (ESMA), 1952, abolishing various employees’ rights, including strike, to another six months in order to thwart a possible agitation.

PIA has been running into losses for years and the government said it is not possible to turn it around with the existing management.

PIA’s cumulative losses have crossed Rs240 billion and government has to inject Rs10 to Rs12 billion every year to keep the airline operational and settle the payrolls.

In December last, the government converted PIA into a commercial entity through an ordinance, but stopped short of announcing its privatisation plans.