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July 9, 2020

Deadly crash and fake pilots expose Pakistan’s broken airline

Business

July 9, 2020

KARACHI: For decades Pakistan International Airlines Corp. stood for a resurgent post-colonial nation, flying the flag from New York to Tokyo. Now the airline is struggling to recover from a fatal crash, years of losses, a collapse in global air travel and the stunning revelation that almost a third of the nation’s pilots obtained fake licenses, Bloomberg reported.

That latest admission, from Aviation Minister Ghulam Sarwar Khan, tipped the airline from crisis to full-blown catastrophe. Khan didn’t say whether the pilots of the crashed Airbus SE jet, who were discussing the coronavirus when they retracted the landing gear just before touching down in Karachi, were among those who held dubious licenses. But his announcement came on the same evening that investigators held the cockpit crew responsible for the accident.

Investigations into at least three major crashes in Pakistan in the past decade found the pilots were either at fault or didn’t follow guidelines. Khan said that 262 of over 850 pilots in Pakistan had fake qualifications and many didn’t even sit the exams themselves.

“I’m not shocked by this,” said Nasrullah Khan Afridi, President of Pakistan Airlines Cabin Crew Association. “In our culture, unfortunately, there is so much wrongdoing among politicians and others that everyone is looking for a short cut. Everyone with dubious records, including the regulator which issues pilot licenses, should be punished.”

The shock is reverberating beyond Pakistan, which is not the only country in Asia to have reported problems in the past over the certification of pilots as a slew of new budget carriers competed to sign up cockpit crews. In the past few years, India and some nations in Southeast Asia have also come under scrutiny for cases of exaggerated flight hours or simulator time.

“This is not just a PIA or Pakistan only issue, it is widespread in India, Indonesia and also the Philippines,” said Mohan Ranganathan, an aviation safety consultant and former pilot based in the southern Indian city of Chennai. In 2011-12, several hundred pilots working for airlines in India were found to have fake certificates, he said.

“A similar charade takes place from flying schools in Indonesia, Philippines etc. They collect the full fees from trainees but actual flying is done only on paper.”

The deluge of disasters at PIA has galvanized the government to speed up reform of the industry in Pakistan. Prime Minister Imran Khan has ordered the nation’s Civil Aviation Authority to fast track further actions for the nation’s airlines, and the authority itself, including cutting jobs.

Pakistan dismissed 28 pilots with suspicious licenses, information minister Shibli Faraz said Tuesday. The probe is ongoing.

“It takes a lot of courage to come out and say our industry is broken,” said Faaiz Amir, a former Air Vice Marshal who investigated a 2012 crash of a Bhoja Air flight near Islamabad. “The system needs to be revamped. Civil aviation needs to be restructured and reorganized.”

They have their work cut out. PIA is the most likely airline in the world to fail in the absence of a bailout as Covid-19 cuts demand for air travel, according to a Bloomberg News analysis. The carrier has one of the highest staff-to-planes ratios, after successive governments shied away from major payroll cuts on concern they would spark labor unrest. The fake pilots disclosure prompted the European Union Aviation Safety Agency to ban airlines from Pakistan flying to its member states, and recommend other carriers not use pilots with Pakistani credentials for flights to the EU.

The U.S. Federal Aviation Administration said it was “assessing the situation.”

Even without the latest round of catastrophes, the airline was struggling from high costs and increased competition from rivals such as Emirates, a carrier it ironically helped establish in 1985. PIA hasn’t made a profit in 15 years and liabilities amounted to $3.8 billion at the end of last year. It has some 14,000 employees for a fleet of only about 30 planes.

After years of propping up the carrier with cash bailouts -- the latest was 3.2 billion rupees ($19 million) last month for PIA to pay interest payments -- the government has promised to carry out measures including job cuts and the sale of non-core assets.

“It’s a belated, welcome and decisive realization,” said A.A.H. Soomro, managing director at Khadim Ali Shah Bukhari Securities. “The conoravirus-induced travel decline coupled with plunging tax revenues have motivated the government to fix bleeding public sector entities.”

PIA traces its roots to 1946 when Orient Airways flew in the then-undivided India. After partition it was one of the first in Asia to begin a regular service to London and in the heady days of expansion in the 1960’s and 70’s was considered a model for new national airlines in other parts of the region.

With prestige and growth came mismanagement and losses as the airline became a source of foreign revenue and a conduit for jobs and contracts at home. PIA is managed by either generalist bureaucrats, or military officers, or both, fostering a bureaucratic and unaccountable system, according to Mosharraf Zaidi, a senior fellow at Islamabad-based think tank, Tabadlab.

The state of the nation’s aviation industry began to be reflected in its accident record. In 2010, an Airblue flight slammed into a rain-soaked hillside near Islamabad, killing 152, an incident also blamed on pilot error. Two years later, the nation suffered another major disaster when a Bhoja Air Boeing 737-200 carrying 118 passengers and 9 crew members crashed on approach at the capital. In both cases, the official reports identified pilot errors.

The recent PIA disaster was the first fatal plane crash for the airline since 47 people were killed in an ATR-42 in 2016.

Amid calls for reform and a change of government, the airline has had six chief executive officers in five years. The current administration says current CEO Arshad Mahmood Malik, a Vice Chief of Air Staff in the nation’s air force who was appointed in October 2018, is trying to restore the airline.

“The tragic recent crashes are a lingering legacy of past mismanagement and corruption that is in the process of being cleared up,”said Shireen Mazari, the minister for human rights in Khan’s cabinet and a close aide to the Prime Minister.

Malik is taking steps such as “ferreting out pilots, engineers and others with fake licenses and qualifications, implementing a modern cost-efficient reservation system, and returning to service costly planes that had been cannibalized for parts,” she said.

Other actions include selling or monetizing non-core assets, built up over the years when the company was a conduit for national prestige. Its prime asset, the Roosevelt Hotel in New York, which was previously valued at $1 billion, may be turned primarily into an office tower with retail space on the ground floor.

But with no flights to Europe and possibly to other countries as aviation authorities weigh the concern about the training of its staff, the core airline itself may need substantial government support to survive.

Ali Wahab, Head of Debt Capital Markets at Sharjah Islamic Bank, said the minister’s revelation has put its future in jeopardy. “When an airline will not fly and has no revenue, how will it repay its debts?”