Pakistan International Airlines (PIA) losses have risen by Rs 103 billion during the tenure of the current Pakistan Muslim League-N government. PIA accumulated losses and liabilities include over Rs 186 billion bank loans, Rs 40 billion dues of Civil Aviation Authority, over Rs 13.5 billion dues of Pakistan State Oil and over Rs 4.5 billion dues to the national exchequer. PIA pays around Rs 3.3 billion on account of loans and mark-up every month, which is a major monthly expense. Sources said that borrowing from banks has crossed Rs 186 billion-which was Rs 162 billion in 2012.
Economic Co-ordination Committee (ECC) of the Cabinet on January 19, 2017 approved additional guarantees of Rs 10.5 billion to meet the financial needs of PIA, bringing the total volume of government guarantees to PIA to Rs 161.5 billion from Rs 151 billion in 2012.
Seven months since its launch, the Premier Service of PIA has also proved to be a white elephant for the federal government, incurring a loss of at least Rs 900 million. Prime Minister Nawaz Sharif inaugurated PIA's Premier Service at the Benazir Bhutto International Airport here on August 14, 2016. An official of PIA on the condition of anonymity said that losses increased in previous governments and it was incorrect to blame only the present government for losses. Chaudhry Nisar Ali Khan recently revealed in a press conference that PIA's German Managing Director Bernd Hildenbrand has been put on the "exit control list" due to an ongoing probe into the lease of planes from a Sri Lankan carrier.
The performance of the PIA bosses can be gauged from the findings of a recent report compiled by Senate's Special Committee formed to evaluate the performance of the PIA which has no permanent chief executive officer while the acting CEO has complained of undue interference by the government and the PIA's Board of Directors (BoD) in administrative matters.
The report claims that unsuitable selection of top officials has given birth to the formation of unbalanced and non-professional BoD members, some of who are totally unaware of the concept of aviation and finance. The report further states that the PIA has been politicised by successive governments and thousands of unqualified and unsuitable employees have been inducted into the national carrier.
"Behind every union, there is some political party, and most of these unions are resorting to blackmail. They pressurise senior management and want to have their say in every posting and promotion," the report reads. The report notes that three of the directors have been drawing more than Rs 300,000 as salary per month and have not been assigned any work for months.
The report also notes that corruption is rampant in the purchase of spare parts, allocation of space for freight, and purchase of tickets. The report further finds that bribes are used for enrolment and postings in catering and engineering departments. Another glaring anomaly is in the salary structure, as wages are on the higher side in some senior management positions compared to their input.
The report also accused successive governments of not exercising the political will needed to pull the airline out of its troubles. It also cited frequent changes in top leadership and induction of cronies lacking strategic vision and ability to make a credible business plan as reasons for the current state of affairs at PIA.
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