Can Pakistan International Airlines Be Saved?

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Can Pakistan International Airlines Be Saved?

A flawed safety record, troubled finances, and lack of transparency: for many, the PIA is a microcosm of all that ails Pakistan.

Can Pakistan International Airlines Be Saved?

Volunteers look for survivors of a plane that crashed in a residential area of Karachi, Pakistan, May 22, 2020.

Credit: AP Photo/Fareed Khan

On Monday, the report on the May 22 crash of a Pakistan International Airlines (PIA) plane in Karachi was submitted to the Aviation Division and Prime Minister Imran Khan. The report established that the cause of the crash, in which 97 lost their lives, was “human error” – an almost predetermined finding reflexively attributed to aircraft disasters in Pakistan.

The PIA has now witnessed 10 major crashes, in addition to multiple other incidents of passengers’ lives being endangered. Last year alone saw a PIA ATR-42 skid off the runway during a landing attempt in Gilgit, and a Jeddah-bound flight made an emergency landing in Lahore. Cases of drug trafficking and smuggling involving PIA staff have regularly surfaced as well.

In addition to all of the PIA’s frequent follies being attributed to individuals, what unites these incidents is the lack of transparency surrounding them. This is further reflected in the wretched picture painted by the fiscal numbers.

The PIA’s total debt was reported to be 400 billion Pakistani rupees as of June 30, 2019. That number is approaching the 500 billion mark, with the airline currently reporting losses of 6.3 billion rupees per month. Despite managing to reduce operational losses in recent months, the PIA’s longstanding flaws have resurfaced amid the COVID-19 pandemic, which has hit the global airline industry.

Aviation experts underline that the PIA’s entire functioning has been held hostage to vested groups, more interested in using the airline to serve personal, or institutional, ambitions. For many, the PIA is a microcosm of all that ails Pakistan.

The army’s hegemonic control over the country is reflected in the PIA and the Pakistan Civil Aviation Authority (PCAA) being dominated by former Pakistan Air Force (PAF) officials, with the aviation sector treated as a retirement home for military men. The shady appointments aren’t limited to the military, with the political parties “rewarding” their workers with positions in the PIA.

As a result, just as Pakistan’s national airline was accumulating billions in losses, its staff count was swelling, making PIA the world’s second worst in terms of employee-to-aircraft ratio behind Syrian Air in 2016. Today, there are over 14,000 PIA employees for a fleet of 30 aircraft.

In contrast, Emirates had around 60,000 employees for 300 aircraft before the COVID-19 pandemic hit. Air India had to slash down its employee-to-aircraft ratio from 300 to 108 in 2015, while the ratio for Turkish Airlines has been well under 100.

“The PIA’s main issue is that you have less planes and more crew. There are almost 500 staff members for one plane; you need 50 people to run one plane. So you definitely need downsizing,” conceded Salman Shah, a financial adviser for the ruling Pakistan Tehreek-e-Insaf (PTI) government, while talking to The Diplomat.

“The solutions aren’t rocket science. The employees need to be given a golden handshake. It needs to be ensured that the employees-per-plane ratio is exactly the same as the top airlines in the world. Whether there is public-private partnership [in the future], or privatization, it is the politics within PIA that needs to be eliminated first. The moment the government looks to do something protests erupt,” Shah added.

This reality is best exhibited by the violent protests in February 2016, following the introduction of the PIA Corporation (Conversion) Bill 2015 in the National Assembly. The bill had to be redrafted following the opposition’s call to ensure job security for the PIA staff before it was eventually passed.

Ironically, the then-ruling Pakistan Muslim League-Nawaz (PML-N), which claimed to undertake downsizing in the PIA, had hired an additional 1,000 employees in the national carrier in the lead up to tabling the first draft of its bill.

Political interference is further epitomized by the case of family members of senior PML-N leader Mushahidullah Khan dominating lucrative PIA employments, without any accountability over their performances, while Khan himself chairs the Senate committee on Aviation.

Observers maintain that the patronage of the power brokers in the PIA is further delineated by the airlines deploying staff without merit and credentials. In the last five years alone, 466 PIA employees were found guilty of faking their degrees.

“The inductions in 1992 saw gross irregularities, with many pilots and engineers holding fake degrees inducted. The Ministry of Defense at the time appointed an investigation committee headed by Air Vice Marshal Mushaf Ali Mir. The report specified the individual responsible for gross financial and administrative irregularities,” former PIA flight engineer Tariq Ali told The Diplomat.

“The person who was named also had his bank accounts given [in the investigation report]. Mushaf Ali Mir recommended that this person should be sacked and criminal proceedings should be initiated [against him]. The culprit went on to become the managing director of PIA, over the years complaining about the training issues of the PIA. Oh, for heaven’s sake, you were there, you are party to whatever has gone bad!” Ali exclaimed.

Critics lambast the manner in which decisions, such as the purchase of Boeing 747s and authorization of the revenue management and central reservation systems, have been taken in the PIA. Former Chief Finance Officer Nayyar Hayat, former managing director Ijaz Haroon, and aviation adviser Sardar Mehtab Ahmed Khan Abbasi are among prominent individuals accused of large-scale misappropriation in recent years (editor’s note: After this article was published, Mr. Hayat contacted The Diplomat to categorically deny any corruption accusations).

The current PIA head, Air Marshal Arshad Mehmood Malik, was initially told by the Supreme Court to choose between the national carrier and the PAF, where he still is a serving officer, before being reinstated without having to make that choice. Confusion has reigned over Malik’s appointment at the helm of the PIA over the past 18 months.

Following his first brief stint as the CEO from October 2018 to January 2019, the PIA ran an advertisement looking for Malik’s replacement, wherein “warfare experts” were sought for the national carrier.

“If Air Force guys were relevant for commercial airlines, then Shaheen Air would never have failed. If all that is required to run an airline is the ability to fly, then Virgin Atlantic founder [Alan Hellary] who himself was an air force pilot, would never have recruited a management,” said Ali, the former PIA flight engineer.

In addition to the overreach of the armed forces, and the misappropriation of the political parties, the judiciary has also been castigated for its role in the PIA crisis. This is highlighted by the fact that hundreds of PIA employees who have been found guilty of serious crimes have actually found a way back into the airline.

“Employees sacked and removed for corruption are working on stay orders. The former PIA chairman, the late Azam Sehgal, told me, ‘we sack people and they come back.’ Criminals involved in drug peddling, corruption, pilots who have dubious certificates, are hiding behind stay holders,” aviation journalist and analyst Tahir Imran Mian told The Diplomat, dubbing the judiciary’s involvement in PIA destructive for the airline.

“Look at the way [former PIA CEO] Musharraf Rasool Cyan was sent home. Would the Supreme Court, or any court, have done that to Air Blue or Shaheen Air? The way the lawyer refused to follow the case, there was clear indication that the [court’s] motives were not honorable,” added Mian.

Experts underline that given the collective role of national institutions in ruining the PIA, it would take a similarly united undertaking to salvage Pakistan’s national carrier. As debate simmers over the reforms needed for the PIA, or if the airline should be completely privatized, there still remain question marks over the will of the stakeholders to take the needed decisions.

“We could go into a public-private partnership. Just like the Turkish Airlines, which is half-owned by Turkey, and half by the private sector. And it is growing into a really good airline,” suggested Salman Shah, further urging downsizing within the PIA, along the lines of the Pakistan Steel Mills. With a deficit of 550 billion PKR, the 9,350 employees of the steel mills were sacked earlier this month – five years after operations were closed.

“We have to do it. There is no other option. We no longer have the money to support the PIA. The Pakistan Steel Mills should’ve been privatized 10 years ago. [Had we done so] it wouldn’t have cost us 500-600 billion rupees,” said Shah.

Tahir Imran Mian, however, says that there are clear stumbling blocks en route to the privatization of the PIA.

“PIA was turned into a private limited company through an act of parliament. In that act, all political parties agreed that for any changes the parliament has to be consulted. [Given] the state of affairs in PIA, the kind of mess it is in, do you believe the financial reports of PIA? I don’t,” he said.

“How much liabilities are there [for the PIA]? How much in Pakistan, how much outside? If anyone is interested in buying PIA – who is going to buy it? Some might be interested in buying parts of PIA,” Mian added.

Tariq Ali believes that the COVID-19 pandemic, despite wreaking havoc with the aviation industry, might actually push the state to finally sort out the PIA. He maintains that if the revamp isn’t undertaken, the enhanced scrutiny the world over could actually blacklist the Pakistani aviation industry, and not just the PIA.

“Sanctions could be imposed, after which no airlines would function [in Pakistan]. Globally every accident is followed by a transparent report, which has never happened with the PIA. [Additionally] while aviation and technology has progressed [around the world], we’re still stuck in the past. We have flaws at our basic induction level. There is a fundamental flaw in the talent that is recruited,” Ali said.

“It will take two to three years for passenger traffic to pick up. If the PIA wants to revive, it should be sold. If privatization does take place, or if PIA’s properties, like its hotels are sold, it should be done transparently.

“In the meantime, cargo traffic will be in demand – the PIA should get cargo and crew on lease. [Owing to downsizing around the world] there is now no shortage of aircraft, and trained pilots and engineers,” he added.

However, Ali, like many other critics of the PIA management, maintains that any reform would be impossible without significant downsizing with the national airline.

“Just to save jobs of a few hundred people, you cannot sacrifice the lives of people who pay to travel. I think the time has come for a drastic change. I’m [a former] employee; even if I lose my pension [as a result of the reforms] then so be it.”