Another year, another PIA bailout


The PIA management hasn’t yet presented any sort of plan to turn its fortunes around, despite promising to do just that for years, but it has forced the government to keep up the tradition of bailing it out every year. The blame rests squarely with the management, that made a number of very tall claims when it took over with the change in government, but nothing at all has yet been done on the ground. So in this way even the PTI government, which made a big issue of SOEs being such a burden on the budget since forever, has also been forced to throw good money after bad money to keep outfits like PIA functioning.
It’s also not that PTI didn’t offer any ideas at all; it’s just that when it came to power it also realised that its first finance minister’s suggestion of creating a holding company which would isolate bad debts of SOEs (State Owned Enterprises), etc, was not a very smart one. And then the management decided to privatise it about half a dozen times, only to shelve such plans every time. Since then, it’s just back to the old way of papering over the cracks with more billions of taxpayer money every year, just like every other administration did when it was their time.
The latest Rs44 billion bailout package approved by the government is the fourth since PTI came to power; and there’s still no plan for the future of the national flag carrier. PIA even mulled floating a bond to raise fresh debt, but not much has been heard of this particular plan in a while either. PIA suffered great harm because of the aviation minister’s dressing down of the airline, and the storm it created about alleged fake licenses of many pilots, led to cancellation of PIA operations in much of the European Union (EU). Yet even when it was faced with such dire circumstances, the management did not do much at all to fix the travel ban imposed by the EU and a few other countries. Now PIA’s losses have ballooned to Rs542 billion in the Jan-Jun period, the first half of its working year. And daily revenue has dropped to Rs50-70m from Rs400m before the pandemic; and even then it was hemorrhaging hundreds of billions of rupees every year.
The unfortunate fact of the matter is that PIA’s management does not even have the faintest clue about how to save this airline. Much was expected of it when it was put in place but it has been one big letdown. Even other than things like the ban, it has not even been able to improve service delivery or trim the workforce as it was tasked to do. It also made a mockery of the voluntary retirement scheme that the airline launched to encourage some of the excess staff to step down on its own. Perhaps a better team is needed to fly PIA out of its troubles.