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April 11, 2018

Getting rid of flawed policies must for PIA revival


April 11, 2018

Pakistan International Airlines (PIA) has been the subject of intense public scrutiny for the last four years due to the impending government decision to privatise the airline.

For the last fourteen years, the government in office, civil servants, Civil Aviation Authority (CAA), PIA management, foreign and local consultants (costing about $8 million), airline professionals, trade unions and associations and business tycoons from the private sector have failed to draw a road-map for the revival of PIA; and since this has remained an elusive task it has only exacerbated the problem, leading to accumulated losses of Rs450 billion.

The latest controversial decision to bifurcate PIA in two is most disparaging and has compounded the confusion.

The root cause of the debacle is the granting of unlimited number of flights as well as access to all international airports in Pakistan to Gulf and Turkish carriers in utter disregard to the principal of reciprocity which is the Sine Qua Non for all commercial agreements. Inevitably, the generous decisions have been used by the foreign airlines to plunder the country’s air-traffic market by picking up Pakistan origin passengers for all destinations in the world via their hubs. In aviation parlance this is called “freedom traffic” but it has no legal justification. It is to be understood that our own mistakes, which are still being continued on the quiet, will not revive PIA. Only innovative strategies will turnaround the airline. There is one specific area for resolution, the implementation of which will put PIA back on track within this year and generate positive results in profitability, market share, revenue enhancement and reinstatement of closed routes, consequently restoring the airlines brand image. The huge concessions, that were the outcome of our flawed policies, cannot now possibly be withdrawn or even curtailed for fear of political and economic backlash. Thus, the strategy for resolving the intractable problem must ensure that the plan of action does not provide any grounds for evoking adverse action of concerned airlines. In my professional opinion and expertise this vital issue is not fait accompli.

In 2001, when PIA started accumulating losses, I was recalled from retirement and based on my experience in turning around PIA in 1981 and 1991 was appointed chief operating officer to recover losses and generate profit.

The airline was able to recover losses and generate profit within one year, for which the board of directors gave me a complimentary citation and the management recommended a national award.

Unfortunately, since then PIA has persistently incurred losses without respite. While all concerned have talked about PIA’s accumulated losses, mismanagement, over-employment, continuous deterioration in product, unreliable flight operation and corruption, the real cause, which are actually flawed policies, has not been accepted. The need is for an innovative strategy which will stem PIA’s rapid downward spiral, increase its market share, enhance revenues, reinstate closed routes and revive the brand image in a short span of time. This innovative formula, if adopted in totality and without delay, could trigger action on various facets of the core problems and provide specific guidelines to achieve targeted objectives while ensuring that no ground is provided to the concerned airlines in a confrontational stance but in a conciliatory spirit and without discriminatory tactics. If the government decides to review bilateral agreements with these countries, it will be a retrogressive step and an exercise in futility thereby creating ill-will with these friendly countries.

The writer is former chief operating officer of PIA

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