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Pakistan International Airlines Fiasco

Official: Pakistan International Airlines cannot be run efficiently

Feb 13, 2011

KARACHI - The success of Pakistan International Airlines’ (PIA) workers in forcing Managing Director Aijaz Haroon out will encourage labour unions in other public sector organisations to challenge management decisions, top executives said on Saturday.

The four days of relentless protests by PIA employees that grounded hundreds of flights and marooned thousands of passengers were reminiscent of the pressure built on Karachi Electric Supply Company (KESC) to reinstate workers recently.

“What happened with PIA does not bode well for the country’s image,” said Zafar A Khan, a leading private sector figure. “We cannot proceed with our privatisation plan with such things.”

The protest at PIA was intended against a scheme to share routes with Turkish Airlines, but it gained momentum after the management sacked eight pilots on charges of misconduct.

Khan, who once headed the airline, said that all the labour unions in the national flag carrier thrive on political backing. “This makes it increasingly difficult for the management to take independent decisions, especially when it comes to cutting the size of the organisation.”

Haroon took charge at PIA in May 2008. He was believed to be a close friend of President Asif Ali Zardari, something that guaranteed a strong management hand. Yet the government had to succumb to the protests.

With more than 18,000 employees on its payroll, PIA is one of the most overstaffed airlines in the world. “Successive governments have installed their people to win votes at the cost of national interest,” said Khan.

PIA suffers from accumulated losses of Rs88 billion. It incurred a loss of Rs11.693 billion in nine months to September 2010, higher than Rs10.771 billion loss reported in the same period of the previous year.

Other public sector organisations such as Pakistan Railways, Pakistan Steel Mills and Hyderabad Electric Supply Company face similar problems being heavily staffed.

“Keeping such a large workforce in PSEs won’t solve the problem of unemployment,” Khan said. “The government should give direct subsidy to pay salaries of the excess workforce in these organisations. The organisations will be better off without them.”

Officials also say that Haroon paid the price of being too close to the government. Even in his tenure, more than 6,000 workers were regularised.

Tariq Kirmani, another former MD of PIA, says that the protests were unprecedented. “Even I saw a lot of disruptions and go-slow campaigns. But flights were never grounded.”

He said that the proposed code-share agreement was bound to create such a problem. “PIA was willing to surrender routes and slots. That is not favourable at all.”

But he also said that PIA cannot be run efficiently with so many workers.

More than 500 domestic and international flights were cancelled during the four days of protest. It is estimated that the airline lost Rs2 billion because of the disruptions, a PIA spokesman said.

Haroon said that his resignation will not change the dilapidated situation of the airline. “Time will tell who was wrong.”

The code-sharing that would have let Turkish Airlines use PIA’s European and American flying rights was seen by the management as a way to earn extra revenue for the loss-ridden carrier. The management says that most of these routes such as the flight to Barcelona were in losses.

PIA officials say that pilots led the campaign against the management just to ensure their jobs continue.

The airline has around 500 pilots and 40 aircraft. The code-sharing agreement would have allowed the two airlines to use each others’ aircraft, facilities and gain access to cities that were not on their network.

Official: Pakistan International Airlines cannot be run efficiently
Employees of Pakistan International Airlines chant slogans at Karachi airport / AP Photo/Fareed Khan


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