KARACHI: Pakistan International Airlines (PIA) has demanded of the government to implement Reforms and Restructuring Program (RRP) in the national flag carrier under governmental regulatory framework instead of airline's regulations.
For this purpose, PIA CEO Air Marshal Arshad Malik met Prime Minister Imran Khan at his office and informed him that suspected pilots' licenses case had been mishandled and PIA, which had no role in it, were being blamed for all, sources said.
CEO PIA also informed the Premier that after the suspected pilots' licenses case all international regulatory authorities were now demanding implementation of RRP under governmental regulatory framework instead of PIA regulations, sources said.
Moreover, they said that CEO PIA also discussed the issue related to PIA balance-sheet restructuring and added that under RRP, the airline proposed to settle its balance-sheet through its restructuring for 10 years or through coupon bonds at 0 percent markup.
Commenting on RRP, sources said that the loss earning national flag carrier, which has the highest employee to aircraft ratio (around 500 employees per aircraft) in the world, has two survival options either to go for massive lay-off or separate non-core services from the airline.
Sources said that the RRP presented by PIA in May 2019 proposed the concerned authorities to secede all non-core services from the airline and establish at least five separate business units for engineering, catering, airport service, etc along with the VSS to nearly 3000 employees, which the sources believe would reduce airline workforce by 7,000 and help PIA to maintain acceptable 'employee to aircraft ratio' (200 employees per aircraft), which otherwise could only be possible if airline expanded its fleet to 70 aircraft or lay-off up to 8000 employees. The airline currently incurred a monthly loss of about Rs 6 billion and spent Rs. 24 billion per annum on the salaries of 14,000 employees, sources said and added that the current economic situation had accelerated the process of RRP in PIA, which was losing billions on a monthly basis.
When contacted, PIA spokesman Abdullah Khan said that PIA was going to announce a Voluntary Separation Scheme (VSS) in the next couple of weeks to retire nearly 3,000 employees and added that all paperwork on VSS had been finalized and forwarded to the finance ministry for funds allocation. He said that after getting funds from the ministry and approval from the ECC, the airline would announce VSS.
Copyright Business Recorder, 2020
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