The Supreme Court on Thursday directed the federal government not to privatize Pakistan International Airlines (PIA) without its prior permission. The court also ordered the former managing directors (MDs) of national flag carrier not to leave the country without informing the apex court.
A three-judge bench headed by Chief Justice Mian Saqib Nisar heard suo motu cases pertaining to irregularities and illegalities in the Pakistan International Airlines and its proposed privatization. The Chief Justice on April 6 had directed the incumbent managing director PIA to submit audit reports/statements of PIA accounts for the last ten years, while all the PIA MDs, who held charge from 2008 to 2018, were asked to appear before the court.
The Chief Justice said the AGP has informed the court that there is no plan to privatize PIA. He, however, said in future if the government decides for its privatization then it will be required to get court's permission.
Attorney General of Pakistan Ashtar Ausaf informed the court that no privatization of PIA is taking place and even if that happens then 51 percent share of national flag carrier will still be with the government. He said that there is a decision of Council of Common Interests (CCI) for privatization of PIA. He said unless the finances of the airline are streamlined and losses end, the privatization could not be done.
Justice Ijaz-ul-Ahsan said they heard that the government was advised that even if with the PIA they have to give something to the buyer then they should go for it.The Chief Justice told the MDs: "We are not placing your names on the Exit Control List (ECL) but you must give undertaking that you will not leave the country without court's permission." The CJP directed the ex-MDs to file reports what had happened in their respective tenures.
The Chief Justice appointed Dr Farrukh Saleem, an economic and financial analyst, amicus curiae (friend of court) to prepare terms of reference (ToRs) for probing the matter related to colossal financial losses of PIA. Dr Saleem apprised the court that the airline earned profit of Rs1.8 billion only in 2002; however, the situation went down afterwards. "For how long taxpayers will continue to bail out the airline," the Chief Justice remarked, adding a permanent solution of the issue needs to be found.
At the outset, PIA Legal Advisor Ahmed Rauf presented a 10-year audit report of the national carrier. He said that the airline suffered Rs360.39 billion losses during the last 17 years, adding presently PIA's share is being sold at Rs5 in the stock market.
According to the breakup of losses of last 10 years, the airline suffered a loss of Rs6.1 billion in 2008, Rs4.3 billion in 2009, Rs20.79 billion in 2010, Rs26.77 billion in 2011, Rs30.9 billion in 2012, Rs44 billion in 2013, Rs31.74 billion in 2014, Rs32.52 billion in 2015, Rs45.38 billion in 2016 and Rs44.11 billion in 2017.
The Chief Justice inquired who was responsible for Rs360 billion losses to the national carrier. He said those who have destroyed the national asset were "oppressors and traitors". He also asked why the profitable routes were sold out and said in view of that the airline had suffered huge losses.
The legal advisor explained that there is no concept of selling the routes. He said under Air Services Agreement the foreign countries allow the landing right to airlines of other countries and the domestic planes. Justice Ijaz inquired why the flights to New York were cancelled as it was the most profitable route.
The counsel said that as the PIA suffered losses on many routes therefore the flights on those routes were suspended, adding it does not mean that these can't be started in future. Rauf told the court that the PIA added seat facilities and it has reduced its losses, adding in the last six months they had saved Rs1 billion by discontinuing various routes. The Chief Justice said they have heard the incumbent advisors of PIA had no experience in the relevant field, adding they don't want to say anything in this regard but it is favoritism in appointments.
The CJP asked Dr Farrukh to prepare the terms of reference regarding the financial and technical loopholes in two weeks time. The MD PIA was ordered to hand over all the documents related to PIA finances to Dr Farrukh. A counsel representing PIA employees told the court that there was no transparency regarding appointments in the PIA. He said the appointment of Ahmed Rauf as legal advisor was not made in a transparent manner. The Chief Justice directed Rauf to file his reply regarding the allegations on the next date of hearing and adjourned the case for two weeks.
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