PAKISTAN, facing a financial crunch which threatens national security and sovereignty, no longer has fiscal space to continue status quo vis-a-vis State-Owned Enterprises like PIA. For an airline like PIA, with an assured ethnic traffic, profitable routes, enough to operate with an average passenger seat factor of over 78%, to become insolvent, it points to gross mismanagement, pilferage, corruption, political and bureaucratic cronyism, conflicts of interest of those at helm and incompetence. One thing is certain, given the political situation and enormity of the crisis Pakistan faces, the importance of having a national flag carrier is still the best option. While the National Exchequer cannot afford to dole out funds to keep PIA afloat it must be privatized immediately, so that it survives. There is the Air India or MAS models, where national airlines, owned by countries with FOREX Reserves far exceeding ours, have been successfully outsourced or privatized with completely independent Board of Directors, not nominated by the State. Both MAS and Air India have been rehabilitated and the national flag carrier status retained by them. If PIA were to collapse, foreign airlines will fill the void, and revenue earned from passenger and cargo traffic, estimated to be over US$3Billion annually, will be remitted by them to their foreign bank accounts. Can Pakistan afford to remit this excessive foreign exchange out of Pakistan? If Pakistan fails to allow these foreign airlines to remit this amount, it will stand isolated. It is therefore very essential to rehabilitate PIA, even if it is owned by private entrepreneurs, with majority shares held by local Pakistani investors, even if this involves the State to absorb existing liabilities. This will prevent further bleeding of the economy.
Can PIA management, Aviation Ministry or BOD justify that over two years have elapsed, since flights to the UK have been suspended, yet PIA has posted managers there. These managers may be facilitated in getting immigration benefits etc., but this is criminal. When foreign postings are made on such flimsy grounds, the airline market share was destined to fall and captured by foreign airlines.
Irregularities in procurement of essential spare parts started when (AVM) Niaz was appointed DMD PIA by Musharraf and have continued thereafter. Industry practice in commercial aviation is to appoint Spare Part vendors at all airports where an airline operates to. Instead, the main vendor, with first right of refusal, was fixed at a remote location, which resulted in delays, increase in maintenance cost and safety lapses. Cost of maintenance increases astronomically when an aircraft is declared AOG (Aircraft On Ground). Safety inspections at various airports resulted in partial bans. PIA must be cleansed of political and bureaucratic cronies forthwith. All those having fake degrees, or involved in corrupt practices, must be proceeded against in accordance with PIA Administration Manual which elaborates procedure for their termination.
Irregularities in recruitment at top level management started when Zia junta took over and AM Nur Khan resigned because of political interference both within PIA and PIA Investment Limited. Bulk of fake degree holders were recruited under pressure of ethnic groups based in Karachi, who were patronized by Musharraf and these irregularities again peaked in 2008-2010 etc. The Open Sky Policy needs to be reviewed to protect commercial interests of all Pakistan-based airlines. No country in the world allows foreign airlines to capture their market, as has happened in Pakistan. Even ground handling of foreign airlines is retained by national flag carrier. Every airline which operates into Dubai is handled by D’Nata, a state subsidiary like Emirates.
—The writer is contributing columnist, based in Lahore.
Email: [email protected]
