PIA- Handle with care

It seems that whenever Pakistan International Airline (PIA) moves to make a new business deal it generates controversy more than business. Last time when PIA made a code sharing agreement with Turkish Airlines the controversy didn end until the sacking of its then-managing director, Ejaz Haroon. The Turkish Airlines code-sharing agreement was a mutually-beneficial deal and such agreements are common among airlines. At that time, many experts asserted that the agreement would be lucrative for PIA. The decision to refrain from such an agreement was not based on a cost-benefit analysis rather it was due to the pressure exerted by PIAs affiliated unions which paralysed the airline completely for 4 days, demanding reinstatement of the employees who had lost their jobs. This time around, the ruckus revolved around a recent contract between the national air carrier and Transworld Aviation for the supply of aviation spare parts. Media reports stated that a senior office-bearer of the Pakistan Airlines Pilots Association (PALPA) questioned the transparency and legality of the agreement. However, General Manager, Public Affairs PIA, Sultan Hasan, told BR Research that these allegations are baseless contending that the agreement is not in contradiction to PPRA rules. He also revealed that the disgruntled PALPA official has already submitted a written clarification, distancing himself from the medias assertions. Hasan revealed that Transworld Aviation has agreed to offer a 90-day credit facility to PIA for up to $700 million. He pointed out that the credit facility could ease cash flow concerns faced by PIA. He explained that, earlier PIA had to make advanced payments to buy spare parts, which created liquidity constraints for the already financially weak airline. In response to these questions regarding the quality of the parts being supplied, he summarily assured that the terms and conditions of the contract are in the best interests of PIA; as the national air carrier would have the liberty of conducting its own market research and will also be allowed to inspect the spare parts prior to receiving their shipments. One hopes that this issue does not flare up further since more than 109,000 Hajj pilgrims are expected to travel with PIA over the next month or so. The management, government and all other stakeholders should at present be completely committed to ensuring that these pilgrims are not subjected to the same nightmarish travel experiences as were last years pilgrims. The situation is fragile; let us hope it will be handled with care.