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January 25, 2019

PIA may get control of Islamabad airport

Top Story

January 25, 2019

ISLAMABAD: Pakistan International Airline (PIA) has not only managed to get major financial concessions from the PTI government but the national flag carrier may soon be able to get control of the Islamabad International Airport.

According to sources, major decisions about the future of PIA has been taken at a meeting chaired by Prime Minister Imran Khan on January 1. The meeting was attended by top military leadership and Ministers for Finance, Revenue and Aviation along with several senior officials. However no senior official of Civil Aviation Authority (CAA) attended the meeting.

On Thursday, the Secretary General of Union of Civil Aviation Muhammad Ayaz Butt wrote a letter to Prime Minister to express concern over decisions taken in the meeting that according to him were detrimental for CAA, the rare profit-making organisation of Pakistan.

According to minutes of the 1st January meeting, the Prime Minister approved several decisions for the revival of PIA, which is running into huge financial losses for last 10 years. These decisions included shifting of PIA headquarters to Islamabad from Karachi and possible placement of Islamabad International Airport under PIA. In this regard a study and recommendations would be put up by end of March 2019.

The meeting decided that outstanding dues of PIA payable to CAA alongside the late payment penalty would be frozen while outstanding balance of PIA due for payment to Pakistan State Oil (PSO) alongside mark up as on 31 Dec 2018 be parked for two years. The airline will also get an additional guarantee of Rs15 billion.

It was decided that summary would processed for positioning of 8 additional Armed Forces’ officers (4 from PAF and 4 from Pak Army) at PIA. The meeting decided that deputation of PAF officers to PIA for 3 years be cleared by first week of Jan 2019. These officers will perform duties in uniform during this period, says the document.

The policy of tickets for Parliamentarians would also be reviewed, as per the minutes of the meeting. The meeting decided that CEO of PIA would to be placed on the board of Pakistan CAA.

Civil Aviation has been directed to give priority in slots to PIA against all foreign carriers at International Airport throughout Pakistan. Departures and arrivals of international carriers be adjusted accordingly in consultation with PIA.

It was decided that National Aviation Policy will be reviewed on urgent basis as “open skies clauses and associated Air Service Agreements (ASA) of the National Aviation Policy including routes, slots and capacity accorded to foreign airlines have been discriminatory and disadvantageous to the national flag carrier.”

The tax regime for airline industry and for air travel in Pakistan is considered very high and is therefore to be re-assessed and rationalized with a view to reduce the rate of taxes being the highest in the region.

The meeting was of the view that high rate of charges levied by PCAA on domestic airlines for use of PCAA facilities needs review and rationalization for the comfort of doing business in the Aviation Industry. While contacted by The News on the decisions, the Special Assistant to the Prime Minister on Media Iftikhar Durrani refused to comment on minutes of the meetings.

Durrani who also attended January 1st meeting said: “These are not PM office minutes, therefore I can’t comment.” When his attention was drawn toward the letter of CAA union to PM, he said the letter has not been received by PM office thus he can’t comment on it either.

CAA union in its letter to PM said it strongly resent the decisions made in January 1st meetings especially mentioning those related to CAA. It said the decision to freeze outstanding dues of PIA toward CAA would hamper progress of aviation industry in Pakistan. IT also opposed appointing PIA CEO a member of CAA board calling it against international practice to appoint an operator’s CEO in board of regulatory body. The Union also strongly opposed any action against open sky policy arguing that policy allowed many international airlines and opened new jobs in the country.

The Union also argued that CAA spent over 100 billion rupees on Islamabad international airport and there was no justification of giving the facility to a failing airline. “It said sinking one ship to save a boat was not a wise decision,” says the letter while referring to the decisions to save PIA at the cost of CAA.