From Perfect in the Air (PIA) to Perhaps I Arrive (PIA). The story of the national carrier is way more than a self-inflicted catastrophe and beyond expression. Many now want it to be renamed to PIS (Perhaps it will sell). Privatization of the airline has been an old agenda that has always stunk of political motives. The government always wants to sell it; the opposition always wants to oppose it.
The airline meantime keeps on becoming unviable. It is a classic case study of “how to ruin an airline”. It has shrunken its revenues. It has cut down its routes. It has shut down its planes. It has closed stations. It has been banned on many routes. This and many more are the stories of the crash of an airline that was once a soaring eagle in the open skies of the global industry.
Has the airline become defunct? Has the airline become junk? It is on sale but there are no buyers. It is in the market but there are no customers. Its financial conditions are unbuyable.
Total shareholder equity is PKR502.2bn while its total debt is PKR428. 2bn, which brings its debt-to-equity ratio to -85.3%. Its total assets and total liabilities are worth PKR389. 8bn and PKR891 billion, respectively. With accumulated losses of over Rs 500 billion, what does PIA have to offer for the buyers?
The local routes that were once a PIA monopoly have also been dominated by newcomers. 14 planes out of its already depleted fleet of 31 aircraft have recently been grounded. The cash-strapped airline faces a severe financial crunch as it accumulates losses in the billions and faces mounting debt. Is it a lost cause? Is it going to end up like the Pakistan Steel Mills, no work, no money, lost and never found? It seems that the foreign buyers are unwilling to take on its terrible financials. Six local companies/consortia have pre-qualified in the process of Pakistan International Airlines (PIA) privatization.
Air Blue, Arif Habib Corporation, Blue World City, Fly Jinnah, Pak Ethanol Consortium, and YB Holdings Consortium are on the list. It may look a last ditch effort but it may be a blessing in disguise. Some of these companies are already in the airline business and doing better than PIA. Some steps they can do to bring back PIA to a semblance of its earlier glory are:
1- The packaging change signal— Whenever people talk about the glorious days of PIA they talk about the service style and quality. The air hostesses were smart and elegant dressed in designer uniforms. In 1975, PIA selected its new uniforms through an open competition. The winning entry was designed by Sir Hardy Amies, the designer of Her Majesty, Queen Elizabeth II. Pierre Cardin was also an entry into this competition. This sent a signal to the world that this was a top class airline. They looked good, they smelled good. Recently, an airhostess revealed that they were given only one uniform which they had to wash and wear.
How many days they wear it before it is washed, is anybody’s guess. The other great thing was the attitude. Just compare how you are greeted in Fly Jinnah Vs PIA and the feeling of comfort Vs discomfort stands out. Basics like eye contacts, smile, helping with luggage, or children were the hallmark of the PIA of earlier days. Such niceties do not take money, it just takes training and accountability.
With massive political hiring the motivation of PIA staff has suffered to the level of becoming rudely indifferent. When the airline is given in private hands, these small, less costly smart ‘must dos’ will signal a big change.
2- The technical upgradation— Yes there may be only a dozen planes in working condition, but it is essential that their technical requirements are kept in mind. PIA being banned by the EU has been a big blow.
The international requirements and safety standards should be the first focus of the consortium of private firms that are likely to buy the airline. The Nur Khan glorious era was highlighted by the personal interest of the leader. He would make surprise checks in the odd hours of night or early morning. He would personally check not just the aircraft but also cleanliness of the staff’s uniforms and the condition of the check-in counters.
Such attention to detail must be a standard operating procedure. The absence of inflight entertainment for decades in PIA is a mystery nobody has been able to resolve. With a private airline giving wifi access to its entertainment on local routes, PIA needs to have similar facilities that are now considered standard.
3- Choose niche routes— PIA traditionally had the Hajj and Umra routes where it made money. However, these routes are also now no longer profitable. The most frequented routes remain Umra and Hajj but they need something really extraordinary to make people come back to PIA. The local airlines that are part of this bid process would be in a good position to find a plan that picks up routes that will in due course of time become profitable.
4- Develop digital marketing plan— The airline would need a major perceptual repositioning. The image of an unreliable and unhospitable airline needs to change to one that is safe, friendly and timely.
The good thing is that costly advertising that was irrelevant but lined up some pockets will not happen. With private sector ownership the marketing has to be through the digital platforms. The social media unfolding of the repackaged brand will be needed to stir the disinterest of the customers.
The way the new airlines have made inroads in the local market by some on time arrivals and departures is a case in point. Such information smartly spread through influencer marketing goes a longer way than the rusty slogans of “great people to fly with”.
Change it must. Change it will be if it gets out of the clutches of the public sector swindlers. PIA has seen the worst. Drugs coming out of the plane ceiling; the German CEO restricted on ECL, disappearing along with a plane; the pilots with fake degrees; and then the tragic crash.
The rot that has seeped deep in the roots of the institution seems almost too far gone for a change. A perception that has made the foreign buyers stay away from the bidding process.
The root cause of the airline’s financial decay is the political and moral decay. If the buying consortium can negotiate a decay less deal, the airline can taxi back on the runway and takeoff.
Copyright Business Recorder, 2024
The writer is a columnist, consultant, coach, and an analyst and can be reached at [email protected]
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