Adil Najam
As we continue with our series on devising a new growth strategy for Pakistan, one cannot but think of the PIA fiasco being played out at airports all across Pakistan. Part of any growth strategy would be dealing with institutions like PIA, deciding what to do with and to them, and taking and implementing some tough decisions. Take a look at Pakistani airports today and you will realize that tough decisions are tough everywhere, but much tougher in Pakistan today. And, frankly, there are many good reasons why.
As everyone remains consumed in the politics of the moment around the PIA stoppage and strikes story, we wanted to invite you to look beyond the moment. What would YOU do if you had to manage PIA, reform PIA, and how would (and should) this figure into Pakistan’s new growth strategy?
In some ways PIA is a really good example because it effects so many of us in very real and immediate ways. Certainly, it does for me – I am supposed to fly PIA from New York to Lahore early next week and at this time wondering what is in store for me. But the problems are bigger than our immediate discomforts. Indeed, the deal with the Turkish airline and the reasons for the current management woes and strikes are all indicators of rather than the real cause of the malaise.
PIA is a storm that has been brewing up for a long time – chronically bad management, over-staffing, politicization, inefficiency, a culture of entitlement, creeping technical incompetence, infrastructure falling apart. None of this is new and none of this will go away even if the current strikes are “resolved.”As far back as November 2006, we at ATP were asking: ‘Can PIA Survive?’
So, what will it take to really and truly “resolve” the PIA crisis within the context of a national growth strategy?
Any ideas?
(Editor’s Note: This is the third in a series on Pakistan’s New Growth Strategy – see first two, here and here. The Planning Commission of Pakistan has invited ideas and suggestions on this and we invite and encourage our readers to please help in highlighting the best and most innovative ideas they can think of. Have your say.)
Four years ago, one of my close friends managed to get a middle level manager post in the HR wing of PIA. The way he was “welcomed” by his seniors and colleagues was very disappointing for him as they could not believe a person being inducted in PIA purely on merit.For them, he had “captured” a seat which only a relative or other endorsee of any big gun deserved.
Suggestions of privatization are appropriate but lack financial depth. As the MD of PIA himself stated in mid 2010, that, technically, PIA has defaulted. Selling the airline in its present undervalued state would bring in nothing. Former finance minister Shaukat Tareen was appointed the president of Habib Bank who brought drastic reforms and then made the bank a marketable property. The same must be followed here.
Emploee to Aircraft ratio of PIA is among the highest in the world, making it one of the most inefficient airlines. So over staffing needs to be addressed seriously and urgently. I have seen over age parkinson ridden male stewards on local flights many a time. Obviously, they were hired for the job thats why they were aboard such flights. Are they actually meant to be there?
A new wholly owned subsidiary should be formed to operate less profitable and less travelled routes. In this way, we can easily identify the true worth of good and bad assets. The new subsidiary can later be considered for possible subsidies or competitive privatization.
As the formal and informal trade with china is increasing rapidly, I know many traders who frequently travel to cities other than Beijing and Shanghai. Business community can asked for suggestions in this regard and appropriate route may be formed which may or may not include multi-stop flights.
Budget airlines are on the rise around the world. Realistically speaking less profitable routes would have to be run on the same pattern, i.e. extra charges for meals, baggage and seat preference. Diverse ticketing plan can be offered on prime routes as well.
Previously, it was key to success; in present times, Marketing is the key to survival. Opening up sales offices in foreign cities and publishing occasional print ads is not enough. Thanks to internet and social networking sites, relatively cheap marketing options are available with greater impact ratio.
Lastly, Pakistan will have to disassociate itself from War OF Terror to make its name acceptable to passengers and potential buyer of PIA.
Absolutely agree with Mr. Nadeem Ahsan!
It should be privatized so that civil servants and politicians stop considering it as their private property/bank account.
I think PIA should be sold ASAP even at RS 1.00(token money). Talk of PIA getting back to good old days of glory ?? I think i will bet Military Generals giving back looted billions to Pakistan more chance. Pakistan Zindabad
Since you link this to the growth strategy, there are two aspects here. The first is to plug the losses and ineffeceincy at PIA. The solution there is privatization and breakup and better management. The other issue is thinking about transportation needs. And the strategy question there is connectivity to world. That will not happen with PIA alone. That needs larger air transport capacity adn strategy.