KARACHI: Discussion over Voluntary Separation Scheme (VSS) in Pakistan International Airlines (PIA) has been commenced under Reforms and Restructuring Programme (RRP).
The Prime Minister Imran Khan presided the RRP meeting in Islamabad on Monday, which was attended by Minister for Aviation Ghulam Sarwar Khan, Information Minister Shibli Faraz, Advisor to PM Dr Ishrat Hussain, Special Assistant to PM Lieutenant Gen (retd) Asim Saleem Bajwa, Chief Executive PIA Air Marshal Arshad Malik and other senior officers.
This was the second meeting held in a span of a week. In the first meeting held after the air crash early this month, Air Marshal Arshad Malik while briefing about the incident to the PM expressed serious reservations over 'no progress' on RRP presented by PIA in May 2019.
Keeping the financial difficulties of the airline in view, the meeting was convened under the chairmanship of premier here on Monday, sources said.
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.
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 7000 and help PIA to maintain acceptable 'employee to aircraft ratio' (200 employee per aircraft), which otherwise could only be possible if airline expanded its fleet to 70 aircraft or lay-off up to 8000 employees.
They said that the issue regarding PIA balance sheet was also discussed in the meeting but no progress was made as the government was reluctant to clean up the airline's balance sheet through its restructuring for 10 years or through coupon bonds at 0 percent mark-up suggested in RRP by PIA.
Meanwhile, PIA spokesman said that CEO PIA gave briefing to PM on RRP and recent PIA plane crash investigation.
CEO PIA during the meeting informed that the airline currently incurred a monthly loss of about Rs6 billion and spent Rs24 billion per annum on the salaries of 14,000 employees. Moreover, he said that the airline had witnessed 10 heads in the last 12 years.
The PM during the meeting said that the country's economy was in trouble due to Covid-19 and the public had to bear the burden of monthly losses of billions of rupees by government departments. Moreover, he said that the current situation was expected to accelerate the process of RRP in PIA, which was losing billions on a monthly basis.
Moreover, he said that PIA should focus on expenditures reduction besides increasing revenue and generating more financial resources along with fleet up gradation and stressed upon the smart use of airline's foreign and domestic assets in order to avoid making them additional burden on public.