Reasons of PIA’s decline into near bankruptcy

[Naveed Yaseen]

Dawn Editorial
High fuel prices cannot explain away PIA’s disastrous decline into near bankruptcy. If anything, international fuel prices fell sharply in the last few months of 2008 but Pakistan International still managed to post an annual loss of Rs39.88bn by December, a staggering increase of more than 200 per cent over the previous year. Net revenues increased by nearly 27 per cent but these gains were more than offset by a 58 per cent spike in operating expenses.

In a report presented to the National Assembly’s Public Accounts Committee, the auditor general’s office echoed the widespread view that PIA’s problems run deeper than fuel costs alone. As many as 29 audit objections were raised in the AG’s report. Loose internal controls are the root cause of the malaise afflicting the national carrier according to the report, which also recommends a thorough review of the way in which PIA is run. Indeed, it is high time such an exercise was carried out by a professional task force with no vested interest in the airline or personal links with its top management.

PIA is overstaffed and saddled with political appointees and an ageing fleet. Many potential customers are kept away by tales of delays and cancellations as well as concerns, real or otherwise, about aircraft maintenance and overall quality of service. Then there is the calibre of the people at the very top of the organisation. A skilled and experienced pilot is no doubt an asset in the cockpit but his utility in the boardroom is questionable to say the least. Compared to its competitors, PIA has fared poorly in marketing its product. An airline spokesperson claims that a new marketing strategy has been initiated but its workings, clearly, are not evident as yet to the paying public. Fuel prices will remain unpredictable and cannot be used endlessly as an excuse for continued failure.

PIA needs to trim the fat and streamline operations but this may not be possible without outside help. If need be, professional troubleshooters specialising in aviation ought to be called in to put PIA on the runway to recovery.


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