PIA: government's left with only one option

ARTICLE: The Federal Minister of Aviation, while making a statement on the floor of the National Assembly that a significant number of pilots on active duty in PIA carry fake licences, perhaps did not fathom the extent of its adverse consequences.

This admission, straight after the Karachi PIA aircraft crash and its inquiry into the incident highlighting 'pilot and control tower error', raised alarm in the global aviation industry that bracketed the issue of fake licence with the plane crash. The credentials of PIA pilots and those of the aviation regulator of the country became questionable.

The reaction was swift and severe. The European aviation regulator banned PIA for travel into Europe airspace for six months and instructed its members to ground all pilots with flying licence of Pakistan origin.

The recent events may have triggered, but are not the only cause of PIA's looming demise. It is the constant decline of PIA, year after year and government after government, since decades.

To be fair, one however needs to recognize some worthy heads of PIA who established and later attempted to turn PIA around. Apart from stalwarts like Air Marshal Nur Khan and Air Marshal Asghar Khan there were few others. The last in line in that category was former PIA Chairman and CEO Tariq Kirmani, in mid-2000, who ably transformed PIA's lost image and credentials and positioned it as a worthy airline. All good so achieved was reversed by the next government - a practice in vogue since then.

For decades, PIA has well served government functionaries, legislators, political leaderships and vested interests; it has catered for their petty needs like complimentary class upgrades, free extra luggage and also accommodated their influence in procurements of goods and services and placement of favourites at all cadres of management and staff - all based on party loyalty, nepotism and cronyism. Today's PIA is an accumulated sum of all these misdeeds.

All attempts to privatise PIA or meaningful reforms rolled out to bring around discipline and accountability into the organisation were checkmated time and again by these interests. Status quo suited all these interests alike.

Under focus of the global aviation regulators is now the competence and conduct of our aviation regulator, namely, Civil Aviation Authority (CAA). The government has decided to bifurcate it into two different entities - a regulator for aviation activities and an administrator for airports. Until CAA is reorganised as regulator and is able to prove its credentials to European regulators, the ban on PIA is not likely to be lifted. This may take months if not years.

PIA's accumulated losses stand at over Rs 400 billion with total liabilities amounting over Rs406 billion against assets of Rs111 billion. PIA's equity has since long been wiped out. For years now, PIA has only been able to continue operations due to financial support by the government which is now left with three options:

1) Continue its attempt to turn around PIA by pumping into it public money;

2) Privatise PIA;

3) Liquidate PIA.

Option # 1) in the present scenario when the global aviation industry is in crisis due to the raging pandemic PIA is unlikely to generate any interest from a reputable buyer as it may not be considered as a viable airline. Option 2) Its messed up human resource structure, declining global acceptance and weak financials based on bailouts from the government do not denote and inspire any confidence as regards its viability. Therefore this is not the time to privatise PIA.

The only viable option appears to be option # 3) - liquidate PIA and walk out with something tangible in hand after retiring the liabilities. The good money being aimlessly doled out to support a lost cause, year after year, can be gainfully employed for social development that has been denied to the public for far too long.

(The writer is former President of Overseas Investors Chambers of Commerce and Industry)

Copyright Business Recorder, 2020