The 'Premier Service' of Pakistan International Airlines (PIA) incurred a loss of Rs 2.1 billion, it is learnt. The Premier Service began on August 14, 2016 with the objective of building-up the image of the airline to attract passengers who had stopped traveling on PIA due to poor quality of its service. Documents available with Business Recorder reveal that the then Chairman Pakistan International Airlines Corporation (PIACL) Azam Saigol suggested establishment of a 'Premier Service' as a separate brand but as part of the existing airline during a meeting with the then Prime Minister Nawaz Sharif in May, 2016.
Subsequently, this service was launched on 14th August, 2016. In line with the vision of the government, PIA Board of Directors also endorsed and approved the concept of Premier Service: to rejuvenate PIA's brand image and improve service standards which will not have any immediate positive financial contribution to PIACL.
BoD authorized acting Chief Executive to finalize and sign a wet lease agreement with Sri Lankan Airlines for up to two Airbus A-330 aircraft for a period of three months, extendable for a further period of three months on behalf of PIA. Later, an aircraft (A-330) from Sri Lankan Airlines was acquired on wet lease as per Public Procurement Regulatory Authority (PPRA) rules. It was equipped with value added features like Wi-Fi, flat bed seats (in business class) and an enhanced IFE (In Flight Entertainment System) etc.
Two A-330 aircraft offered by Sri Lankan Airlines and one A340-500 aircraft offered by HiFly were found to be technically suitable. An inquiry by Federal Investigation Agency (FIA) was initiated to investigate this matter along with other inquiries against former acting Chief Executive Officer (CEO) Bernd Hildenbrand, a German national. His name was put on ECL by the Ministry of Interior, to which an exemption was given later and he was allowed to proceed abroad.
It was decided that till the time PIA's own fleet (B-777s) is upgraded with value added services (Wi-Fi and flatbed seats, IFE) the 'Premier Service' be suspended. According to the documents, airlines restructure their network where loss is to be curtailed and consolidation to be made on profit making routes. In line with industry practice PIA also has been rationalizing its route network from time to time, where loss making routes are closed while additional flights are introduced on viable routes. On New York route, PIA has been incurring losses to the tune of Rs 1.2 billion per annum. Therefore it will be very difficult to continue with same further, maintained the documents.
Even after suspension of premier service, the flight operation to London has not been reduced. The Premier Service was on six frequencies out of a total of ten. These were on Islamabad - London and Lahore- London routes whereas Karachi was planned to be added later. Nevertheless, PIA still operates the same number of' flights to London by its own fleet of Boeing 777s.
Comments
Comments are closed.