Daily Times

Pakistan International Airlines (PIA) might be about to make a “full-fledged return to the skies” in the second half of 2021, but any claims that the boost in flight operations would “help turn around its financial performance” should be taken with more than a pinch of salt. There is nothing so far to show any structural overhaul of the national flag carrier, and while it is still reeling from a succession of humiliating setbacks it would be too much to expect simply a return to previous fleet employment to do wonders for its finances. Its aircraft were, after all, banned from entering European airspace failing a complete safety audit of the Civil Aviation Authority (CAA), one of its planes was seized at Kuala Lumpur airport in Malaysia its lease wasn’t paid for some reason, and nobody can forget how the aviation minister created so much controversy about its pilots’ flying licenses.

And these were just some of the recent problems. The airline, just like most other State Owned Enterprises (SOEs), has been hemorrhaging billions upon billions for years now. The pandemic made things much worse, of course, as the last year was the worst encountered by the global aviation industry since the Second World War. Now that the vaccination drive is gaining momentum across the world and airplanes are flying again, PIA’s return to previous flight operations is also very welcome. But how does that imply that the company’s financial problems would somehow be solved in this way? It has a negative equity of Rs460 billion, after all, which comprises loans worth Rs326 billion and other payables of Rs118 billion. This is a lot of money that cannot simply be wished away. And there’s very little in the way Aviation Minister Ghulam Sarwar Khan and PIA CEO Arshad Malik have done things that inspires much confidence.

Authorities are apparently in talks with financial institutions for rescheduling PIA’s loans and just for good measure they have returned a few leased aircraft and slashed the airline’s workforce by 14 percent (or about 1,900-2,000 employees). But the last part might not be an easy sell during those talks. The Voluntary Separation Scheme (VSS) was very badly mishandled and till late last month those that availed it were still waiting for their promised payments, which were due on 31 January 2021. This delay has put the laid off workers in severe financial stress, including the inability to pay medical bills, which has also caused at least two deaths so far.

The CEO’s turnaround plan so far has centred on big meetings and fancy presentations, yet nothing has improved on ground especially in terms of service delivery, safety, and flight operations. And until what is promised is delivered, PIA’s health, especially its finances, will not improve. In short, the CEO needs to show results, which seems less likely as time passes. *