From glory to insolvency

The precarious financial sit­uation of Pakistan Interna­tional Airlines (PIA) is a pressing concern that cannot be ignored any longer. PIA’s debts and liabil­ities continue to mount, creating a burden that seems insurmount­able. The only viable solution, in my opinion, is the swift and com­plete privatisation of both the air­line and its subsidiary, PIA Invest­ments, without any government or state institution interference.

There are precedents to follow in this regard, such as Air India and Malaysia Airlines (MAS), where the state decided to absorb existing li­abilities and subsequently priva­tise these entities while retaining their status as national flag carri­ers. In the case of PIA, history has shown us that competent lead­ership can turn the tide. In 1971, when PIA was on the brink of col­lapse, the federal government ap­pointed AM Zafar Chaudhry as the managing director. Under his lead­ership, PIA made the critical deci­sion to reduce its fleet, routes, and flight frequency by half. This al­lowed the airline to recover and thrive. The turning point, howev­er, came when Rafique Saigol was appointed with full powers and no political interference from 1972 to 1974. He then handed over PIA to AM Nur Khan in 1974, who contin­ued the upward trajectory by ex­panding the fleet, routes, and fre­quency. Revenues soared, and in 1978, PIA Investments was estab­lished, marking the airline’s for­ay into the hospitality business with the acquisition of Hotel Roos­evelt in Manhattan, NYC, and Hotel Scribe in Paris. Nur Khan’s vision was to utilise these hotels as assets for PIA, and he became the chair­man of this subsidiary. This period marked the golden years of PIA.

However, this golden era came to an end when political interfer­ence crept in. The interference be­gan under General Zia’s regime, leading to the appointment of in­dividuals with affiliations rather than merit. Corruption and incom­petence then took root in the man­agement of PIA, causing its liabili­ties to soar to over Rs. 750 billion, exceeding its assets significantly. This dismal state of affairs is fur­ther exemplified by a shocking in­cident in February 2020 when an airworthy B777 aircraft was irrep­arably damaged during an anti-hi­jacking drill conducted by the ASF, contrary to industry practice.

It is evident that successive cor­rupt and inept managements, lack­ing experience in commercial avia­tion, have driven PIA to insolvency. To rectify this, privatisation is not just an option; it is a necessity. The government must relinquish con­trol and allow the private sector to breathe new life into PIA. This de­cision should be made based on merit and the efficient utilisation of public funds, not political interests.



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