By Kamal Siddiqi
Published: March 4, 2013
The writer is Editor of The Express Tribune
On 31 Dec
2012, the Financial Times newspaper posted a list of 2012 by numbers,
both positive and negative. Pakistan finds one mention in this list. Our
national airline – PIA has the highest employee to aircraft ratio in
the world: 485 employees per aircraft.
This figure is based upon
the existing total strength of 42 aircraft. The serviceable aircraft on
an average for the past three years is only 32. The figure of 485 does
not include contract pilots, flight engineers and aircraft engineers who
have been rehired after retirement and other contractual staff,
although PIA fleet and pilot utilization is almost half of other
regional carriers like Emirates, Etihad and Turkish Airlines.
Now
some more facts. Almost every pilot and flight engineer who retired
after 2009 has been rehired on contract. In addition, PIA has recruited
over the past five years another 3,500 employees in violation of merit,
which includes 250 pilots who are on payroll, but waiting for over three
years to be operational.
In 2008, thousands of PIA employees who
were sacked earlier by the Nawaz Sharif government were reinstated and
given back their old jobs with back pay and promotions. This cost the
airlines hundreds of millions. The airline has also not been purged of
those employees who submitted fake degrees. They are not sacked
allegedly because of pressure from unions, political parties and
important members of the ruling elite.
During a presentation in
2009, then prime minister Gilani had observed that the problems faced by
PIA “could not be resolved through periodic injections of financial
dole outs.” At the time, PIA was already in technical insolvency, with
debts, liabilities and losses exceeding its assets, and accumulated
losses exceeding Rs146 billion. But since then, the government has been
doing nothing else.
PIA has been reduced to an organization
which, in spite of massive revenue pilferage, losses, reduction in
frequency of flights and grounding of its fleet, has become hostage to
its employees, who demand higher salaries.
This election year, as
if one cue, the government rewarded PIA employees by announcing a Rs5
billion salary package at a time when the airline was making an annual
Rs30 billion loss. As reported in the national press, a senior director
of the airline expressed his reservations at this decision but was
overruled. The government accepted the PIA CBA’s charter of demands and
increased the salaries of Group 1 to 4 employees by 45 per cent.
Following
this, the PM has also approved a fresh Rs100 billion special bailout
for the national flag carrier and instructed the release of $4.5 million
on priority for leasing of aircraft on dry lease. Reviewing the four
year long spiral of the airline, the government decided to increase the
number of aircraft not reduce the number of employees. The PM also said
that a Rs8 billion loan by the federal government would be converted
into equity and a plan put into place for rescheduling loans of Rs147
billion owed to different banks.
Today a PIA senior pilot flying a
B777 earns in excess of Rs1 million per month in salaries and
allowances, which is five times more than what a PhD gets in Pakistan.
How long will we continue to bailout this green elephant? It is no
coincidence that whenever PIA wants new aircraft, services suddenly
deteriorate. Flights are delayed or cancelled and a huge hue and cry is
made over old aircraft and outdated technology. The media plays its part
in this as well.
PIA can be a case study for management students
on how an airline should not be run. The national carrier has given
away its natural advantage on ethnic traffic to regional carriers like
Emirates, Etihad and Qatar Airways who now operate a maximum number of
flights to Pakistan.
The unions seem to run the show. Every
flight that is operated is understaffed because most of the cabin crew
are not on board, citing one reason or another. No action is taken
against them. The quality of food is poor and facilities are
deteriorating. People remember the golden days of the airline when it
was pleasurable experience to fly. Now most of the travelers fly with
PIA out of compulsion. One wonders how long we will bail out this
operation.
Published in The Express Tribune, March 4th, 2013.
Source: http://tribune.com.pk