Tuesday October 19, 2021

Govt orders second business plan for PIA in two years

March 06, 2021

PHOENIX: The PTI government has awarded a $1.2 million contract to the International Air Transport Association (IATA) to carry out a business plan for Pakistan International Airlines (PIA) to take the national flag carrier out of financial crisis.

According to well-placed sources, the national airline had already submitted a business plan in 2018 but the government while rejecting it, ordered for hiring international consultants to conduct the study. Two international companies i.e. McKinsey and IATA applied for the project.

IATA, according to sources, quoted $1.2 million in its bid whereas McKinsey quoted $2.4 million for the project to carry out a business plan for the national flag carrier. The IATA, being the lowest bidder, was awarded the contract in March or April 2020. However, due to Covid-19, which affected the airlines industry badly, the Government of Pakistan decided not to conduct the study the previous year.

Adviser to Prime Minister on Institutional Reforms and Austerity Dr. Ishrat Hussain was looking after the whole process. He advised that the 2020 as a ‘base-year’ was not ideal for the business plan. Therefore, the sources informed, the PIA management put it on hold. The adviser to the PM in the first quarter of 2021 submitted his report on proposed reforms before the federal cabinet and gave approval to carrying out the study by IATA.

After getting a go ahead from the federal government, a team of consultants from IATA reached Pakistan last month to conduct the study. The foreign consultants will submit their report in 20 weeks. This would be a completely new business plan involving business strategy for the next five years for PIA, informed the sources.

This scribe sent a detailed questionnaire to IATA’s Assistant Director Corporate Communications, Asia Pacific, Albert Tjoeng, who said "we do not discuss publicly the projects that we have done due to client confidentiality.”

Earlier in January this year, PIA Spokesperson Abdullah Hafeez told this scribe that due to the rising debts and liabilities of the national flag carrier, the PIA board had chalked out a comprehensive business plan to take the airlines out of this quagmire.