Adviser to Prime Minister on Institutional Reforms and Austerity, Ishrat Husain, has suggested splitting the Pakistan International Airlines (PIA) into two companies for its revival.
He made these remarks during a Federal cabinet meeting on Wednesday, also attended by the PIA Chief Executive Officer, Arshad Malik.
Ishrat Hussain emphasized that it is the only viable option for the national airline’s revival, which will create a new core business operating company without any debt. He also suggested establishing a non-core company to park all liabilities and debt.
PIA has its strengths as well, such as rights over lucrative routes, secured during its golden years, and splitting the airline into two will provide it a fair chance of revival.
He suggested PIA to target nine million Pakistani expatriates and encourage them to travel through the national airline.
During the meeting, PIA CEO revealed that the total debt of the airline stood at Rs. 400 billion with annual interest payments of Rs. 24 billion.
He highlighted several factors behind PIA’s losses over the years, including old aircraft usage with poor seating arrangement, no entertainment system, unprofitable destinations, overstaffing, union activities, and corruption.
Airline management has introduced a segregation scheme for 4,000 non-core employees and a voluntary separation scheme (VSS) for 3,000 employees to overcome overstaffing. The scheme will cost Rs. 12.87 billion with payback in two and a half to three years.