PIA losses: Management didn’t reveal complete facts in Supreme Court

LAHORE – The reasons behind losses of PIA during past 20 years are more than its management stated in a report submitted to the Supreme Court, sources in national flag carrier said on Thursday.

Pilferage of millions of rupees in procurement of components of aircraft, Maintenance Repair and Overhaul (MRO), Foreign postings, heavy salaries of top management, political interference in administrative issues and out of merit appointments are pushing national carrier at the brink of disaster day by day.

Sources claimed that PIA management has termed the national aviation policy of providing excessive grants of traffic rights to Gulf airlines and low-cost carriers, the geo-political situation of the country, depreciation of rupee, fluctuating fuel prices and competitive regional markets as external challenges to the airline. One can imagine procurement blunders of PIA management from a recent deal wherein National Carrier is going to acquire five A320 V2500 engine aircraft instead of B-737/800 although the latter is not only clearly suitable for its operations but also has in-house repair and overhaul facility with PIA. PIA is about to finalize its choice for the dry lease of five narrow body and two wide body aircraft for which it opened bids on 31st October 2012. Sources claimed that PIA Maintenance, Repair and Overhaul (MRO) department has no technological capacity to overhaul A320 Rolls Royce V2500, but management was standing firm to purchase the same due to unknown reasons. PIA management would have to send the engine of aircraft to either Germany or New Zealand for MRO which would cost almost $100,000 in engine transportation only, apart from other cost of MRO. A PIA senior officer seeking anonymity said that other than engines overhaul there was mega pilferage in procurement of other components of aircraft and purchase of aircraft. Kickbacks and commissions are received at high level.

As per The Nation research, out of total 17,000 officials, PIA’s human resource department has started re-verification of educational degrees of 2000 officials about whom former MD Rao Qamar was doubtful that their degrees were fake. These fake degree holders were so influential that they were getting promotions more speedily than that of original degree holders. This discrimination has not only stopped the promotions of bonafide officials but also has demoralized them to play their role for the development of airline. In the current year four such officers were promoted third time to next grades from Lahore station whose degrees were challenged in Lahore High Court by their colleagues having original degrees and more service than them. LHC had issued notice to MD PIA in this regard but management paid no heed towards court notice and promoted said four officers.

At present, PIA has 17,227 employees and the total monthly salary of its staff amounts to Rs1.16 billion, which on an annual basis works out to be 12pc of revenue earned in 2011. PIA has a total number of 38 aircraft in its fleet and the ratio of employees with respect to each aircraft is 453 which was far more than that of international ratio of about 150 employees per aircraft.

Foreign posting was another source of corruption in PIA wherein PIA employees commit irregularities during their postings aboard. A senior officer of PIA on the condition of not to be named said that they have asked Chairman PIA to investigate the assets of those PIA employees who were posted at foreign stations.

Top heavy management was another crucial factor in PIA losses which could be reflected from the bold decisions of outgoing MD PIA, Rao Qamar Suleman who terminated the services of a former Deputy Managing Director (DMD) Saleem Syani who was drawing about $40,000 as monthly salary apart from other perks and privileges. It is worth mentioning here that some other consultants were also on the pay role of PIA also drawing heavy salaries. Well placed sources in PIA were of the view that main reason behind leaving Rao Qamar was his bold decisions like kicking out of DMD Salim Syani, verification of fake degrees of influential employees of PIA and others. Though current MD was making tall claims of bold decisions but no such decision was witnessed by him so far.

The PIA management informed the National Assembly Standing Committee on Finance that reasons behind the losses to the national carrier were aging fleet, volatile oil prices, exchange rate losses, interest on non-fleet loans, geo-political situation, delay in aviation policy, inconsistent policies and services on commercially unviable routes.

Source:  http://www.nation.com.pk