Pakistani government gives green light for radical restructuring of PIA
The Pakistan Cabinet has provisionally approved a restructuring plan for PIA – Pakistan International Airlines (PK, Islamabad Quaid-e-Azam Int’l) drawn up by the Governmental Economic Coordination Committee (ECC) in which the national airline will halve its workforce and reduce its fleet with the aim of becoming profitable by 2023.
The airline’s current inflated workforce of 14,000 gives it an employee-to-aircraft ratio three times that of Air France-KLM or Singapore Airlines, according to a Bloomberg study. But while the fleet will in the future be kept under 30 and will include more fuel-efficient planes, from a current total of 32, the number of workers will be reduced to around 7,000. About 2,000 people have already agreed to the voluntary dismissal. , the airline said.
Ishrat Hussain, adviser to Prime Minister Imran Khan, told Bloomberg News on April 27 that the cabinet approved the restructuring. Once its balance sheet is improved, PIA will be tasked with considering selling a 26% stake in the company, he added, while non-core activities such as catering and engineering will be outsourced. Assets such as the Roosevelt Hotel in New York City, located near Grand Central Station, are subject to sale or redevelopment.
There is “no grandiose plan to become like Emirates or Etihad Airways or Qatar Airways,” Hussain said, but the company will be transformed into “a very lean and efficient organization.” Unlike previous attempts, he promised, this time the plans will not be blocked by protesting employees or the political opposition.
PIA currently operates 32 aircraft, according to the advanced module of ch-aviation fleets, including eleven A320-200, six B777-200 (ER), two B777-200 (LR), four B777-300 (ER), four ATR72-500 and five ATR42-500s. Fourteen of them are held and the others are rented to seven donors. He has five other B777-300 (ER) on order.
The total fleet size will be “kept below 30,” Hussain said, and PIA will permanently remove routes that are no longer profitable, such as those to Tokyo Narita and Manila Ninoy Aquino Int’l. According to the ch-aviation capabilities module, the carrier is not currently operating to any of these destinations. Of its 73 routes, 24 are national.
Pakistan International Airlines recorded a net loss of PKR 34.6 billion ($ 225 million) for 2020, which, despite the Covid-related challenges of the year, was actually an improvement over a loss of 52 , PKR 6 billion ($ 341 million) the previous year. A series of bailouts allowed him at least to pay the interest on his large debts.
Separately, Pakistani Minister of Information and Broadcasting Fawad Chaudhry told the Dawn newspaper that the cabinet approved in principle a restructuring plan to split the national carrier into two companies, a newco and the former PIA. , but had sent the summary of the plan. back to the ECC to make several changes.