Political interference and overstaffing has rendered Pakistan International Airlines (PIA) inefficient with massive losses with the national flag carrier employing 4.4 times more staff for operational purposes compared to the industry's average. Sources said that SWOP, strength, opportunities, weakness and threats, analysis of PIA was carried out to discover its plus and minus points by taking all aspects into account to determine future of the organisation.
The strength of national flag carrier was large domestic market as well as large Pakistani diaspora and high-volume pilgrimage apart from government financial support and skilled staff at comparably low rates. Analysis has identified geographical location and transaction process as well as large number of improvement potential and diverse revenue sources as opportunities. The opportunities of national flag carrier include large domestic airport network and extended airlines cooperation agreements.
The weaknesses of PIA were unclear strategy, inefficient organisational structure and low yield traffic as well as lack of cash. The analysis also exposed staff volumes and qualifications and culture and limited capacity to face domestic and international competition as well as aircraft fleet and maintenance organisation, which was not approved by European Aviation Safety agency (EASA) as weaknesses of national flag carrier.
The PIAC was facing threats of political interference, domestic and international competition, brain drain and safety bans as threats. The organisation was also facing threat of union power, failed transaction process and domestic and regional instability as well as low tourism volumes, oil prices and weak currency and exchange rate fluctuations as well as higher interest rates. Based on these finding, sources further stated that the government decided that a strategic partnership was the way forward as far as PIA was concerned.
The PIAC incorporated in 1955, operates under the Pakistan International Airlines Corporation Act, 1956 and is listed on all the three domestic stock exchanges. The government of Pakistan is the principal shareholder, holding 85 per cent of the share capital, while 8 per cent is held by PIA Employees Empowerment Trust under Benazir Employees Stocks Exchange Options (BESOS)
The Cabinet Committee on Privatisation (CCOP) meeting held on October 3 approved a list of entities to be privatised, which includes PIAC. Subsequently, Finance Ministry has committed to the International Monetary Fund (IMF) that it would sell 26 per cent shares of PIAC to a strategic partner by end-June 2016. The diligence process for PIA was completed in August 2015 and plans for private participation will be developed thereafter and expressions of interest for strategic investors will be solicited before end-December 2015.
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