On Tuesday the federal cabinet has decided to split Pakistan International Airlines (PIA) into two separate companies for its revival.
During a meeting on Tuesday chaired by Prime Minister Imran Khan, the federal cabinet has decided to pull out PIA from financial crises by dividing the organization into two companies a new and the old PIAs.
Back in 2015, when the former premier Nawaz Sharif had originally approved the plan in his last tenure. The plan could not be executed because of PIA employee’s protest and resistance of opposition parties against the prioritization of PIA.
While speaking to the media, Information Minister Fawad Chaudhry said, the cabinet had in principle approved the plan to divide the national carrier PIA into two companies but sent the summary into ECC again for new changes.
In the media briefing later he said, the cabinet was apprised that the operational losses of PIA had come down from Rs57bn to Rs1bn, which was a great success of the present management.
He said, “The real problem of the PIA, however, is its loan which caused an overall loss of Rs460bn,”
He said, “The PIA’s aircraft-to-employee ratio was 450, which was highest in the world”. Furthermore, he added, “The previous governments of the PML-N and PPP had ruined the national institution by making political and unnecessary appointments”
previously, splitting PIA into two different entities and cutting down 25 percent of employees was the ECC approved planned for restructuring of PIA.
In the ECC meeting, Dr. Ishrat Hussain had presented a plan for the amortization of Rs457 billion worth of liabilities by the fiscal year 2023. The ECC had approved absorbing about Rs202bn of liabilities as federal government equity in PIA during the current fiscal year.
Dr. Hussain made a detailed presentation on human resource and operational restructuring of PIA and suggested various options for restructuring, including measures to minimize losses and transform PIA into a financially viable entity.
These included human resource restructuring through Voluntary Separation Scheme (VSS), hiring aviation experts, fleet modernization, routes rationalization, product development, and revenue enhancement measures. The ECC recommended the restructuring plan of PIACL for onward submission to the cabinet.