Imraiz Khan
From an airline on the verge of financial collapse, PIA soon developed into an airline of repute, with employees recruited on merit and men like Enver Jamal, a pioneer of commercial aviation, starting from its genesis as Orient Airways.
Nur Khan invested in the hospitality business to boost Pakistan International Airline revenues. In his opinion commercial aviation and hotel business complement each other offering quality service to revenue clients whether they travel for tourism or trade etc.
It is an irony that today the fate of PIA and its subsidiary owned Hotel Roosevelt is in doldrums because of mismanagement, conflicts of interest and either mediocrity of the political appointees or their vested financial interests.
This government, like its predecessors Shaukat Aziz, Muhammad Nawaz Sharif and Asif Zardari have contributed to its share of damaging the commercial interests of all Pakistan based airlines by offering direct flight traffic rights from UK
to Lahore and Islamabad at a time when the local industry faces sanctions from operation by EASA. In the days of COVID-19, when the demand for travel is at bare minimum, and airlines like Qatar, Emirates, and Turkish Air are catering for the needs of depleted passenger traffic and even Europe, Canada etc have stopped air travel to UK, there was absolutely no rationale than to facilitate powerful individuals appointed as GSA by Virgin Air.
As it is the EASA 6 months ban has been extended for another 3 months giving CAA Pakistan an ultimatum of sorts which Executive Director EASA had specified in Suspension of Third Party Operator Authorization dated 30 June 2020 in which they refer to TCO Authorization dated 17 May 2016 where it was specified “part of Continuous Monitoring” required for assessment of PIAL. EASA had already given PIA an extension from 24 May 2020 to 17 June after they failed to comply with the requirement of Safety Management System. This warning was not taken seriously by both PIA and CAA Pakistan, or the Aviation Ministry, perhaps because of their lack of familiarity with consequences if international regulators recommendations are not implemented.
It also refers to an irresponsible statement by the Aviation Minister informing parliament that ‘260 out of 860 pilot licenses issued by Pakistani authorities and used by pilots operating air operators, is currently not capable to certify and oversee its operators and aircraft in accordance with applicable international standards”. The Aviation Minister, nor his office could have been familiar with names, details and license types issued to over 800 pilots certified by CAA Pakistan, which alone can have this information. What were the motives of those who supplied this list to Minister Sarwar Khan? Was it to create vacancies for some specified individuals, or even worse, to destroy Pakistani aviation industry and facilitate foreign airlines?
The headquarters of PIA and its subsidiaries like PIA Shavers, Hotel Midway etc were based in Pakistan. PIA subsidiaries were administered by a PIA General Manager with offices in Karachi Head Office. It goes to the credit and vision of Nur Khan who took the initiative to launch direct flights to the UK and other European destinations, including the first Across Atlantic flight to New-York. He exploited the opportunity offered by Oil Boom with flights to Gulf, Mid East and beyond. PIA operation stretched to the Far East and it was the first airline that operated to China. PIA’s Gulf and Mid East operations were high yield routes which operated with a Seat Factor of almost 90%.
The national airline had a lion’s share offering direct flights with exclusive traffic rights, which every national airline enjoyed. Unfortunately, Nur Khan resigned, when the autonomy he enjoyed was diluted by direct political interference in affairs of both PIA and its subsidiaries by Zia Junta. The political governments that took over from Zia, fell to temptations of greed and traffic rights which were granted on reciprocal basis were granted on direct instructions of political executives, to the sole disadvantage of Pakistani airlines. CAA Pakistan was party to this and so was the political appointees placed at helm in PIA. The grant of traffic rights and permission to Virgin Air for operating direct flights to Islamabad and Lahore where 80% of traffic originates will serve as the last straw that broke the camel’s back of Pakistani aviation industry.
Thereafter it has been a downhill slide and controversial deals like DC-10 swap with aged B747 from Canadian Pacific became order of the day. Instances like posting his cronies to USA to head both PIA and its subsidiary Hotel Roosevelt. Resulting in PIA’s profitability and its network spread all over the world required the services of best qualified and experienced executives to maintain and build upon, especially in a competitive environment with airlines emerging in the region. Unfortunately, PIA’s profitability and lure of international travel and postings became a liability which many vultures, having powerful connections, wanted to have a share of.
Nur Khan wanted to boost PIA revenues with investment and joint ventures in the hotel industry. In 1978 PIA acquired on lease with 50% partnership Hotel Roosevelt located in Manhattan NYC. In 1980, Haseeb Hassan posted as GM Saudia brought a Saudi prince as 50% partner in Roosevelt Lease and PIAIL became a holding company Roosevelt Hotel NV registered in British Virgin Island as an offshore company. A deal was signed with Millstein Brothers, owners of Hotel Roosevelt, for a 20-year long term lease with an option to purchase at a fixed price of $36.5 Million. It was for the convenience of Saudi partner that PIA Investment Board meetings were held abroad. In 1999 PIA exercised an option to purchase Roosevelt but instead of $36.5 Million, former MD PIA Investment signed a deal for $39 Million. This was contested by PIA MD Arif Abbasi who went to court and won the case in 2000.
PIA holds shares in Hotel Scribe located in Paris with a French company. The Government of Pakistan as majority share-holder of PIA exclusively owns Hotel Roosevelt from 2000 onwards. There was no longer any requirement for PIA to maintain off-shore holding company Roosevelt Hotel NV. The hotel in NYC is being managed by Hotel Operators who specialize in operating them. Unfortunately, vested interests that stood to benefit from what was an interim arrangement in 1978, in collaboration with paid bureaucracy, were against it. The PIAIL executives were able to evade audit scrutiny from the Auditor General of Pakistan. Board Meetings at Paris and New York offered an all-paid holiday to members of BOD and also an immunity from scrutiny to the PIAIL executives who were paid salary, bonuses etc in US dollars.
Today both PIA and its subsidiary PIAIL created by Nur Khan are in doldrums. If the Pakistan Government and BOD of PIA had taken an initiative to sever links with off-shore holding company after 2000, this takeover bid by those involved in Reko Diq could have been avoided.
