New owners want to turn PIA into an efficient and modern organization
The privatization of Pakistan International Airlines (PIA),
completed in January 2026, marks a pivotal moment in the airline’s turbulent
history. After decades of financial crises, political interference, and
mismanagement, the national carrier’s survival was in question. However, the
successful acquisition of 75% of PIA’s shares by the Arif Habib Consortium for PKR 139 billion
(approximately USD 480 million) has sparked a renewed sense of hope. The deal,
executed under IMF supervision, is seen as a major step toward transparency and
recovery.
PIA, originally a private enterprise after
Pakistan's independence, now returns to private ownership after years under
government control. This privatization signals the end of political
interference, which has long hampered the airline’s efficiency.
Historically, Pakistan’s government has argued
that state-run businesses should not be the government's responsibility, but
political motives and a lack of commitment have often stymied reform. The new
owners have pledged an additional PKR 125 billion in investment, but this alone
won’t solve the deep-rooted issues plaguing the airline.
Read More PIA
seeking technical partnerships to modernize operations and enhance
competitiveness
If PIA is merely treated as a financial entity
and revived using outdated aviation methods, a real recovery remains unlikely.
The Arif Habib Consortium now faces the challenge of addressing not only the
airline's physical assets but also its outdated technology, fragmented
engineering systems, and weak commercial network disconnected from the global
aviation scene.
Revitalizing PIA will require more than just
financial investment—it requires a commitment to modern technology. In the
competitive aviation industry, even small airlines remain relevant through
superior technology. Failing to embrace these changes would be akin to
repeating past mistakes.
The Technological Failure
PIA’s infrastructure has long been in
disrepair, reflecting a history of technical missteps. The airline’s failure
wasn’t due to a lack of passengers—it failed because it could not meet modern
expectations for service, safety, and operational efficiency. Outdated systems
and poor IT infrastructure led to poor customer experiences. For example, the
airline struggled with basic flight schedule communication, leading to customer
frustration.
One of the most devastating mistakes was PIA’s
decision to switch from the globally recognized Sabre Passenger Service System
(PSS) to the Hitit system in 2016, which failed to maintain crucial interline
connectivity. This led to PIA operating as a point-to-point carrier, damaging
its reputation and undermining its competitiveness. Passengers were often given
handwritten boarding passes, reminiscent of practices from the 1970s, which
introduced serious security risks.
The airline’s technical blunders also included
a failure to implement a modern safety management system, leading to the European Union Aviation Safety Agency
(EASA) banning PIA from its airspace in 2020. While this ban was largely
associated with the fake pilot license scandal, the root cause was PIA’s lack
of a digital safety management system to analyze aircraft sensor data and
predict risks. This technological gap left PIA "blind" to potential
safety issues, while global carriers used systems like AMOS or TRAX to prevent
such failures.
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Habib says job security of PIA employees will depend on their performance
Moreover, PIA’s inventory and maintenance
planning system was dysfunctional, resulting in parts shortages and grounded
planes, which caused massive financial losses. Abandoning the ERP project in
2016 further weakened internal controls, allowing for fraud and inefficiency.
The Path Forward: A Technological Overhaul
Now that PIA is privatized, the next challenge
is to find a way to make the airline competitive again. One promising model to
follow is that of Riyadh Airlines,
launched in 2025, which operates entirely on AI-driven systems. Unlike
traditional airlines, Riyadh Airlines replaced the conventional Passenger Name
Record (PNR) system with an AI-based Offer and Order Management System (OOMS),
integrating tools like Flyr and Sabre Mosaic to create personalized, real-time
passenger experiences.
By leveraging artificial intelligence, Riyadh
Airlines can predict weather conditions, anticipate crew shortages, and
proactively maintain its fleet before failures occur. The airline’s AI-powered
systems also manage delays automatically and keep staff alert to potential
disruptions. PIA, in contrast, operates with outdated systems that fail to keep
pace with modern aviation standards.
A Bold Move Towards AI and Digital
Transformation
For PIA to recover, it must embrace a similar
AI-driven approach. First and foremost, the EU’s ban on PIA must be lifted,
which can only happen through significant technological upgrades. AI-based
safety systems, cloud-based safety management software like IQSMS, and robust
cybersecurity measures (such as zero-trust architecture and biometric systems)
are essential.
Rebuilding passenger trust is equally crucial.
PIA’s history of poor service must be replaced with a modern, efficient system
where practices like cannibalization (using parts from one plane to repair
another) are eliminated. Automated supply chain software should ensure timely
availability of parts, preventing unnecessary downtime.
To leap commercially, PIA must choose between
reviving its outdated systems or adopting modern methods. Following the Riyadh
Airlines model, PIA could implement OOMS to not only sell seats but also offer
bundled services such as hotel stays, transport, and extra baggage—creating new
revenue streams.
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Furthermore, a generative AI chatbot,
available on WhatsApp in both Urdu and English, could handle automated refunds
for canceled flights, significantly improving customer experience and
operational efficiency.
Conclusion
PIA’s privatization presents the final
opportunity to restore its global competitiveness. However, the success of this
transformation hinges on embracing modern technology, rebuilding passenger
trust, and adopting data-driven decision-making. If PIA’s new leadership makes
bold, innovative choices and learns from both past mistakes and the success of
others like Riyadh Airlines, the national carrier can rise from its troubled
past and thrive in the competitive global aviation market.
Source:
Bloom Pakistan