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EDITORIAL: The Economic Coordination Committee of the Cabinet (ECC) approved, in principle, the Voluntary Separation Scheme (VSS), envisaging 3,500 Pakistan International Airlines (PIA) employees at an estimated cost of 12 billion rupees. It was, however, pointed out that it is unclear how many would be willing to avail the VSS and suggested offering it to determine the cost based on the number of employees who wanted to accept it.

There is little or no doubt that several administrations, civilian and military alike, used PIA as a recruitment centre for their loyalists which accounts for massive losses today that are attributable to not only appointing decision makers in PIA on the basis of nepotism rather than relevant education and experience but also parking the highest number of lower level employees on the basis of their political loyalties leading to the highest airplane to employee ratio in the world. The outcome is record PIA losses and even more disturbingly the acknowledgement in the budget for 2020-21 that 11 percent of the 1890 billion rupees stock of guarantees and 115 billion rupees fresh/rollover guarantees are accounted for by the aviation sector alone.

There is therefore an urgent need for the government to undertake appropriate measures to reduce the losses suffered by PIA. The question is whether the government’s VSS scheme will achieve the desired results. Past experience with VSS reveals that only those with relevant experience are tempted to opt for the scheme as they are likely to get other perhaps more lucrative jobs in the same industry while those who have neither the relevant education nor the experience to be able to get another job in the same industry are reluctant to accept the VSS. This would defeat the very objective of the VSS and perhaps the government would have to select who to offer the VSS to.

But given that PIA, like some other white elephants operating in the public sector, including Pakistan Steel Mills and Pakistan Railways, has an extremely well organized labour union, a targeted VSS may well lead to a strike action, as in the past, which may be used as a spring board by the Opposition to launch a nation-wide protest movement – an opposition that has already succeeded in bringing eleven parties onto one platform – the Pakistan Democratic Movement (PDM).

PIA has also suffered considerably not only due to recent court decisions but also through the ill-advised admission of more than hundred fake pilot licenses by the relevant Minister on the floor of the House that led to PIA flight suspensions in many countries. A more appropriate line of action would have been to first launch an investigation that would have led to the identification of the pilots with fake licenses and their subsequent suspension.

In this particularly mismanaged milieu for the ECC decision to first see the response to VSS may not be appropriate as this may be tantamount to deferring corrective action on the part of the government. To conclude, there needs to be a comprehensive package for restructuring for immediate implementation as keeping PIA afloat is continuing to bleed the treasury. Frankly speaking, PIA and some other State-Owned Enterprises (SOEs), including Pakistan Steel Mills, have no solution.

Copyright Business Recorder, 2020