Pakistan International Airlines has become a loss-making machine over the past few years and has gone under an exorbitant debt of Rs. 406 billion.
The CEO of PIA has devised a business plan and forwarded it to the federal government for review with a view to improving the current situation of the national carrier. Part of the proposed plan is to sell out PIA’s assets like Scribe Hotel in Paris and the Roosevelt Hotel in New York to the government to generate revenue. It is expected that the sale of these two hotels can reduce the debt burden of PIA by Rs. 352 billion.
The national airline is all set to expand in the next four years by increasing its current fleet of 36 aircraft to 44 aircrafts by 2022. During this time, 5 ATR 72 aircrafts will also be phased out from operations by next year.
The second proposition is to bear the debt servicing cost for the year 2018 and 2019 that stand at Rs. 59.334 billion and Rs. 49.98 billion, respectively. After two years, PIA will be able to bear the debt servicing cost itself. Now it is up to the government to decide which option will they opt for, as in one case, they will have to bear the debt servicing cost while on the other hand, they can reduce the debt by selling their prestigious assets in Paris and New York.
It has been said that the number of employees working in PIA has been a major problem in the profitability of the company as it currently provides 18,000 direct employment and 50,000 indirect employment. However, the cabinet members believe that the number of employees is not the main problem. It’s the poor performance of the company that has led to this situation.
Cabinet members also said that the national airline could not achieve the desired results despite getting full autonomy from the government over the last four years. PIA needs to streamline its operation processes and cut down its costs in order to increase profitability. Closing down the national airline is not a viable option as it will increase unemployment in the country and will also make it difficult for local passengers for direct connectivity with the rest of the world.