PIA calls for govt help in Gulf price war

KARACHI: The beleaguered foreign head of Pakistan International Airlines (PIA) is calling for help from the government in fighting a price war with deep-pocketed Gulf airlines, including putting restrictions on the number of flights they can operate in its home market.

German chief executive Bernd Hildenbrand was earlier this month put on an "exit control list" (ECL), effectively barring him from leaving the country, while the government investigates the cost of an aircraft leasing deal.

Hildenbrand, who denies any wrongdoing, said the majority state-owned airline is losing about Rs3.1 billion per month while market share continues to rise for the likes of Emirates Airlines and its Abu-Dhabi-based neighbour Etihad Airlines, attracted by the potential growth in demand in a nation of nearly 200 million people.

"For us it is very difficult to compete with the emirates," Hildenbrand said, conceding that the Middle Eastern-carriers offered better and cheaper services, whereas PIA is struggling to modernise its 35-plane fleet due to a lack of funds.

PIA therefore needs help from the government, including possibly putting "some limitations on the open-sky policy", he said, alluding to Pakistan´s aviation service agreements with other countries.

In comparison, he said, the bilateral trade agreements of some other countries and blocs were more restrictive, citing Canada, which has limited the number of flights for Etihad and Emirates.

"Even European countries don’t open up completely", he added. "I am not against competition, but unlimited competition is also not possible," he added. Hildenbrand said PIA’s total debt stood at $186 billion ($1.8 billion) at the end of 2016 and has appealed to the authorities to help nurse the airline back to profitability.

However, it would take at least three years to return the company to profitability and to truly transform PIA’s fortunes would take even longer. "What went wrong in 25 years you don’t change in half a year. Impossible," he said.