Imran govt likely to rid PIA of Rs500 billion debt

The federal cabinet is likely to take a decision regarding the hefty Rs500 billion debt burden on the Pakistan International Airlines (PIA).

According to reports, PIA Chief Executive Officer (CEO) Air Marshal (r) Arshad Mahmood Malik will brief the federal cabinet, scheduled to meet today (Tuesday), about restructuring reforms introduced in the national carrier to make it self-sustainable “without seeking financial help from the government”.

“Even with operational profits, the airline will not not be able to come out of the financial quagmire,” reports quoted sources as saying. “The burden of debt servicing is unsustainable.”

They said the cabinet would also be briefed on the airline’s foodservice division (FSD), technical ground service (TGS), base management of the engineering department, revenue enhancement strategies, human resource restructuring, financial restructuring, and measures pertaining to Precision Engineering Complex (PEC).

The PIA management has been evaluating the possibility of giving a management contract of food services at Karachi and Islamabad. While this will not generate much in terms of cost-saving, it will definitely improve product quality and customer satisfaction.

Similarly, the PIA management has been evaluating the possibility of giving an operation and management contract for technical ground service.

Reports said the airline is also evaluating different options to get out of the courier business which was launched by PIA in 2003. It has been considering outsourcing or partnering options for Speedex.

Moreover, they added, the airline is tackling revenue enhancement strategies, route rationalisation, product improvement, yield enhancement, enhanced focus on corporate business, network optimisation, ancillary revenue, codeshare of the alliance to expand the network, revamping of web business portal and offering special packages for online users and reduction in distribution cost by implementing HITIT portal plus.