Massive financial mismanagement and fraud revealed in PIA audit
Once a training hub for top airlines
like Emirates and Saudi Airlines, Pakistan International Airlines (PIA) is now
gripped by a severe financial crisis.
Following a Supreme Court directive,
the Auditor General of Pakistan (AGP) audited PIA from 2007 to 2017, revealing
widespread financial mismanagement and fraud. The report highlights Rs44.5
billion in losses from ticketing fraud alone, along with massive overcharges on
equipment purchases—one item listed at $24,000 was billed at $240,000. No
disciplinary action followed these findings, and the AGP criticized past audit
firms for allegedly colluding with PIA officials to overlook these
discrepancies.
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management issues disrupt air travel in Pakistan
The audit also uncovered costly
software mismanagement; PIA switched to a new ticketing system that charged
$1.50 per ticket compared to the previous rate of 46 cents. This unchecked
spending worsened PIA's financial strain.
Leadership failures further
contributed to PIA’s decline, as numerous unqualified officials were appointed
to critical roles without basic aviation expertise. Presently, only 14 of PIA’s
35 aircraft are operational, exacerbating financial losses by leaving assets
underused.
PIA's financial distress dates back
to 2011, when it requested a bailout of Rs50-55 billion. Its deficit has since
doubled to Rs800 billion. The AGP report criticizes PIA's engineering
department, which failed to repair grounded aircraft despite agreements with
major manufacturers like Airbus and Boeing. Additionally, a partnership with
French firm World Aviation reportedly deepened the airline’s losses.
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declines to fifth position in domestic airline rankings
Despite these issues, PIA's London
and Frankfurt routes alone generate $350-400 million, and it operates 350 other
profitable routes. Industry insiders believe that strategic restructuring and
skilled leadership could restore PIA's stability within a few years. Interest
in privatization has come mainly from real estate developers, not aviation
companies, fueling concerns among PIA employees, the public, and overseas
Pakistanis.
Source:
Express Tribune