Pakistan International Airlines (PIA), the country’s national carrier, has been in hot water for a few years now. Its balance sheet shows a debt of 300 billion rupees (almost $3 billion). It has been described as the world’s most overstaffed airline, and despite the fact that oil prices are the lowest they’ve been in recent years, the losses continue to accumulate.
Notwithstanding the perennial flight delays and the occasional workers’ strike, however, for a while the airline seemed to be getting by.
Then on Jan. 21, the National Assembly passed a bill that proposed to convert the national carrier into a public limited company. The manner in which the bill was passed was sketchy, as were its contents. All that was revealed was that a strategic investor would take a minority stake in as well as management control of the company. The opposition’s demands for transparency were ignored, and the ruling Pakistan Muslim League-Nawaz (PMLN) party’s reluctance to prolong the debate was evident.
The day the bill was passed, every member of the PMLN was present in the Assembly — an extremely rare feat. It is also worth mentioning that that when the previous government moved to privatize the airline, PMLN leader Nawaz Sharif, who is now prime minister, opposed the move. Instead, he proposed that the airline should sell some assets, pay off its loans, increase its fleet size and add routes.
While it is undoubtedly exasperating for the government to continue investing money in an unprofitable enterprise, that the bill was passed without an attempt to build consensus in the Assembly may be one reason for the nationwide protests that emerged in the weeks after the privatization announcement.
Once it became evident that PIA’s employees would not be taking the announcement lying down and that they had the capacity to bring the airline’s services to a screeching halt, the government found itself having to backtrack. Islamabad announced that the privatization plans would be postponed by six months and that all employees should immediately return to work. For good measure, the government invoked a law that essentially restricts union activity in state-administered sectors, including railways, postal services, telephone and affiliated services, airports and seaports.
In a moment of heightened tension, the information minister announced that those continuing the strike would be “treated as enemies of PIA and Pakistan and they will end up losing their jobs.” No one ended up losing their jobs, but two employees lost their lives when the protests got violent. Security personnel fired rubber bullets, water cannons and tear gas shells at the protesters. Although the police and rangers both deny firing, several other PIA employees and media personnel were injured by regular bullets, and bullet casings were found at the site of the clash.
And then, just as suddenly as it began, the head of the striking workers called off the action. At a press briefing, he announced that “a kind friend” had advised him to end the strike and to come to the table for discussions. The offer was available before the employees lost their lives and the airline suffered losses of more than 1.8 billion rupees, so whatever prompted his change of heart is not fully clear.
As of now, the airline is running again and has slashed its prices to attract the customers it inconvenienced over the last month. But much remains undecided, including, first and foremost, the fate of its workers. One of the most quoted — or perhaps misquoted — figures throughout the debate has been that while PIA has 600 pilots, it has a functional fleet of only 25 airplanes. This figure is constantly cited to prove that the airline is grossly overstaffed and that the crux of the problem lies in how corrupt the employees are.
The airline does appear to be overstaffed. This is because successive managements kept selling assets to keep the airline afloat, even as revenues plunged. This, coupled with the fact that the government could not mobilize investment in the airline, resulted in a gradual but significant shrinking of PIA’s fleet. If the ratio of PIA’s fleet to its employees is to be rectified, the government should look into rebuilding its fleet rather than firing employees.
Aviation experts have suggested that to minimize losses, what is needed is a new generation of fuel-efficient modern aircraft. Along with this new fleet, however,PIA also needs a new system of management. The top-heavy organization needs to be restructured. Most important, it needs a new chief. A former managing director and a career pilot puts it succinctly, saying, “PIA can be saved from within the system. All it needs is sincere leadership and authority to execute decisions.”
Finally, the airline needs a restructuring of its loans. In a recent interview, the PIA’s former chairman said the airline urgently needed “financial wizards” who could help fix the balance sheets so that it can stop borrowing money to pay off its loans.
Payrolls are not what has dragged down PIA. Pakistan’s government has played this game before: During the power crisis of 2008 and 2009, when the country suffered severe electricity shortages, a narrative was created to vilify the poor, who were blamed for nationwide electricity thefts. It turned out such thefts accounted for less than 2 percent of missing power. Investigations uncovered that huge sums were owed to the power-generating companies by federal and provincial agencies, which had not paid electricity bills in years. Pakistan’s power crisis is ongoing, and its causes, much the same as PIA’s, were financial mismanagement and weak leadership. The sooner people realize this, the harder it will become for the government to lay all the blame on PIA’s workers.