Steering PIA away from turbulence:
Introduction of a New Task Force
Prime Minister Shehbaz Sharif has
established a high-level committee tasked with devising a comprehensive plan to
restructure and revive Pakistan International Airlines (PIA), which has been
struggling for years.
The national flag carrier's reputation has
been marred by continuous losses, amounting to Rs635 billion by the end of
September. In recent weeks, the airline's image has suffered further due to a
series of incidents in different parts of the world.
These setbacks occurred at a time when the
airline was already grappling with criticism regarding the qualifications of
its pilots, raised by a former aviation minister.
Complicating matters, there is discord
among various agencies in the aviation chain, including the Civil Aviation
Authority, PIA, and the Airport Security Force.
The situation has deteriorated to the
extent that the finance and aviation ministers issued a warning to these
agencies, urging them to resolve their issues within a week. If they fail to do
so, the government might be compelled to outsource not only the airports but
also their security operations. Several renowned firms, including the operator
of London Heathrow Airport, have expressed interest in airport service
contracts.
The need for amendments to the aviation law
was emphasized, with a requirement for their passage by mid-July to align with
international standards. This would allow global aviation regulators to conduct
on-ground inspections in August to verify the operational systems and standards
necessary for PIA to resume flights to the United States, United Kingdom, and
Europe. Failure to meet these requirements would result in another year of
waiting for inspections.
These operations were suspended about three
years ago following controversies surrounding pilots' qualifications and
aircraft safety standards.
Considering the accumulation of challenges
and events over time, the Prime Minister has established a high-level
committee, headed by Finance Minister Ishaq Dar, to develop effective solutions
for the restructuring and revival of PIA. The committee is expected to present
its recommendations shortly after Eidul Azha.
In addition to the Finance Minister, the
committee includes Aviation Minister Khawaja Saad Rafiq, Planning Minister
Ahsan Iqbal, Commerce Minister Naveed Qamar, Special Assistant to the Prime
Minister on Government Effectiveness Jahanzeb Khan, and the aviation secretary.
Despite disbursing emergency funding of Rs4
billion to PIA to meet international obligations, the government is still
seeking approximately Rs23 billion for an immediate bailout. The government had
previously increased the guarantee limit to over Rs263 billion to assist the
airline in obtaining commercial funding.
Furthermore, PIA informed the government
that, as per a December 30, 2017 decision by the Prime Minister, the government
was responsible for covering the interest on PIA's debt for five years (from
July 2018 to June 2023) and making direct payments to the lenders.
Consequently, the government made interest payments on PIA's guaranteed loans
from July 2018 to November 2022.
In the previous year's budget, the Ministry
of Finance allocated Rs15 billion for the fiscal year 2022-23, of which Rs14.69
billion was utilized by November 2022, falling short of the requested amount.
Additional funds of Rs22.9 billion were requested for the period from December
to June, but only Rs4 billion was disbursed this week.
Source: Dawn.com