Dr Hafeez Pasha contends that wages as a component of total costs of PIA are much lower than other airlines'. The reason: wages offered by PIA are a lot lower than those offered by other airlines. He compared PIA's losses with those incurred by other airlines including Air India which, he stated, has twice the losses PIA suffered. It was Dr Pasha's informed opinion that PIA must not be sold and be retained as a strategic national asset. The reasons for this are two-fold. First, in the event that it is sold to the private sector the unprofitable routes would be summarily stopped which would isolate several cities, including Chitral, Gilgit and even Quetta with negative implications on our objective to integrate far-flung areas and thereby choke the recruitment drive of fundamentalists and terrorists. And secondly, Dr Pasha noted that the losses suffered in the past could be attributed not so much to flawed decision-making, including overstaffing and political interference, but to a steep rise in international fuel prices. With the international oil prices plummeting, the national airline is showing an operating profit, he correctly stated. The reason for the bulk of the losses, as with other national airlines, was the fuel costs, he implied.
The claim of the Sharif administration against the former PPP-led coalition government is that during its tenure it overstaffed the national airline with party loyalists, as it did in Pakistan Steel Mills, thereby raising the employee per plane ratio. This was confirmed by Chairman Captain Azeem (Retd) who told Business Recorder that when he took over charge of the airline there were only 38 planes and there were 550 employees per plane. He pointed out that he had added 20 planes to the fleet, and anticipates a further addition of two planes by December 2015, which has brought down the employees per plane to 250.
The marked difference in logic employed by Dr Pasha and Captain Azeem shows the difference between an economist, who has undertaken empirical research before expressing his opinion, and a man without the necessary financial background but with a specific term of reference.
To conclude, one would urge the Prime Minister to take cognizance of the views of Dr Pasha. On 4th December 2015, the government issued an ordinance converting PIA from a statutory corporation into a company governed by the Companies Ordinance 1984. This would enable the government to sell shares of the company thereby making the PIA privatisation the most hotly debated subject today with the federal government committed to transferring its management control to the private sector and the Pakistan People's Party vehemently opposing the move in the National Assembly as well as in the Senate. The PPP has also accused the Sharif administration of having identified the strategic investor before the process has even begun. The employees too are resisting the move and so far talks to resolve the issue have not borne any fruit.
Be that as it may, the government envisages the sale of 26 percent shares with the timeline indicated in the eight mandatory International Monetary Fund (IMF) staff review as end June 2016. In its Letter of Intent (LoI) dated 15th September the government notes with respect to capital market transactions 10 companies in the oil, gas, banking and insurance sectors with PIA not included in the list. However, the national airline is included under the head 'strategic private sector participation' where it is argued that this will "act as a catalyst in unlocking their potential through their managerial and investment participation, and can also increase the value of government's residual shareholding. We will make efforts to balance the objectives of sale proceeds while adequately addressing labour market issues and social implications." The Technical Memorandum of Understanding, reflecting an agreement between the Fund and the government, notes under the list of Strategic Private Sector Participation: PIA Investments Ltd - Roosevelt Hotel NY and Scribe Hotel Paris and not the core business of the airline.
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