Sad demise mourned well!?

Pakistan International Airline continues to disappoint its stakeholders be they passengers, shareholders or the government. The glory that the national carrier brought during Air Marshal Nur Khan and Asghar Khans era remains a yearning of decades. For years, the country did not see any respite as every passing day sheds light on the poor performance, bad governance, mismanagement, rampant corruption, overstaffing, delays and technical faults prevalent in the national air carrier. Corruption has been the hub of state-owned organisations recent examples being Pakistan Steel Mills and Pakistan Railways. The story of PIA is not different. It is no more a commercial airline but a political pursuit where the performance has been worsening due to political appointments at key positions. Political influence of those in power has plunged the airline into a deadly tail spin. What now remains is the airline characterised by nepotism, poor governance and mediocrity. The recent pre- and post-Hajj operations by PIA have become an annual two-month activity of lack of professionalism and substandard performance. This time too, the programme is afflicted with delays in all flights bringing pilgrims from Saudi Arabia. Flight cancellation and delays are not restricted to the Hajj season but have become frequent with the regular domestic and international flight schedules as well. The first half of the year ending December 2011 was marked by great volatility in fuel prices, political turmoil in the gulf region and the ongoing global recession. According to the unconsolidated accounts, the performance of PIA has deteriorated further as losses increased by 65 percent to Rs.10.74 billion for the six months ending June 2011 compared with the same period of last year. The fuel costs for January to June 2011 increased by approximately 52 percent. PIAs total liabilities exceeded total assets as of December 31, 2010. Mismanagement and poor governance is weakening operational performance where factors like fleet repair and maintenance, punctuality, flight schedules and optimum staffing play a crucial role in saving this sinking ship. Its financial viability is further threatened by fuel price volatility, rupee depreciation versus dollar and interest rate risk as financial arrangements linked to LIBOR might come under pressure when the eurozone adopts a tight monetary policy. The bailout plan of Rs.20 billion requested by the management to help the crippled airline has been rejected by the government as it demands a clear roadmap for restructuring of PIA. But the question remains: Is the bailout by GoP the only way forward or would this just be squandering money for nothing? The sad demise of PIA has truthfully been mourned well all across the media. But, who knows the truth? Rumours have it; another politically-backed airline could be on the horizon. But for now, PIA is asking for a bailout as it might see itself heading for bankruptcy.