EDITORIAL: It seems the time has come for the curtain to fall on PIA (Pakistan International Airlines) – the national flag carrier that was once the pride of the country and helped set up Emirates Airlines in the UAE (United Arab Emirates) that grew to become the envy of the aviation industry across the world. Yet PIA’s trainwreck is no surprise.
Decades of stuffing it, and other SOEs (state-owned enterprises), with political appointees even as it endlessly boasted one of the highest and most ridiculous employee-aircraft ratios in the world – the litmus test for operational efficiency – assured the death sentence for the airline that once proudly merited its “great people to fly with” slogan.
Everybody knows that all administrations, civilian and military, that have held power since at least the 1980s are equally responsible for this state of affairs. For, even as all of them floated fancy ideas to deal with PIA’s losses, not one of them initiated even the most basic remedial measures, like cutting excess weight and controlling needless expenditures.
Most parties have rallied for privatisation, even though none moved beyond slogans. And the PTI (Pakistan Tehreek-e-Insaf) government floated a unique idea of creating a holding company to take PIA’s losses off its books in an attempt to rewrite the textbook on corporate finance. As usual, it also fizzled out and the company continued to suffer losses.
Now, with about 80 flights cancelled over the weekend because PIA’s fuel supplier, PSO (Pakistan State Oil), refused to dole out any more free oil till it is paid the Rs26.7 billion owed to it, the end is within sight.
The government cannot bail it out as usual because its hands are tied by the IMF (International Monetary Fund) program and without an immediate financial rescue package, the company is sure to go belly up.
The only real choice before the government at this point is when to pull the plug because the little time PIA has left on life support will continue to compound losses. Strangely, the official line is still about extending “all possible support” until the airline’s privatisation is complete.
This betrays a grave sense of denial that has typified the state’s approach to hemorrhaging SOEs since forever. Caretaker PM Kakar has directed “relevant authorities” to speed up the privatisation, without detailing how that is going to be done, “as soon as possible”, when it has not been possible in ages.
The prudent thing to do is cut any further losses and give the airline the axe that is due for a very long time. This painful decision should, at the very least, prompt some soul-searching in our political elite, which is responsible for this mess.
Let it be very clear, also, that this process will not end with PIA. For, far too many SEOs are in similar terminal decline, for the same reasons, and await the same fate. If anything, the government must urgently set up a working group to deal with the inevitable.
Put simply, the time has come to deal with the outcome of unbridled political incompetence, opportunism, and corruption.
For the longest time all sorts of stakeholders have pushed for reforms, warning of just such an outcome, yet no administration, regardless of the party in power, was ever interested.
Now they must handle the fallout and explain it to the people; including how those really responsible for it will be made to pay.
Copyright Business Recorder, 2023
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