After immense deliberations, the Cabinet Committee on Privatisation (CCOP) has finally included the national flag carrier—Pakistan International Airline (PIA)—in an active privatisation programme. The airline has been a permanent sore spot for the country and its fiscal standing on account of accumulating billions of rupees in financial losses, for which the government only has itself to blame. For decades, it has exhibited an inability to part ways with PIA either by retaining majority shares or delaying the privatisation process, each of which has worked to the detriment of the country. So, while this new development comes in rather late, it is still reassuring to see at least some effort being made towards fixing glaring problems in the state-owned enterprise.
Chaired by Finance Minister Ishaq Dar, the CCOP finally approved the proposal of the Privatisation Commission to include the PIA in an active programme. The decision was taken after considering the fact that over the course of decades, the airline has accumulated a total loss of Rs.742 billion. In fact, the airline reported a loss of Rs.80 billion in the last year alone and this figure is expected to rise to Rs.112 billion very soon.
Such concerning numbers are not surprising given the multiple reports of mismanagement and corruption within the organisation. Pilot license scandals, overstaffed workforce, poor quality aircraft, slow restructuring, inability to attract funding, and rising expenses have been adding immense burden onto the national kitty, limiting the government as a result. The best time to revamp the PIA would have been when reports of its inefficiency as an airline surfaced initially, but better late than never.
Unfortunately, this is not our first attempt to privatise the national flag carrier. Earlier, the government had agreed to a programme which enabled it to retain 51 percent of the company’s shares which only disrupted the process and limited the private sector’s participation in its functions and restructuring. With immense pressure from the IMF to undergo policy change that corrects fiscal imbalances, the government has decided to incur some change. All relevant stakeholders have now agreed to amend the PIA conversion law, there are more opportunities for transferring management control to private entities, on top of complete control due to the sale of the remaining shares. There is some hope that PIA’s woes will now be addressed and resolved, should this privatisation programme be the last and conclusive one.