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Making PIA a profitable entity again

Published on 9th June, Edition 23, 2014


In order to make Pakistan International Airlines (PIA) a profitable entity and to bring back the lost glory of our national-flag carrier, the incumbent Prime Minister Nawaz Sharif just last month has decided to add new Boeing 777 carriers to the PIA fleet. With work being done to restore the country’s airline carrier, it is constantly being stressed that PIA needs to be made into a profitable unit and that efforts ought to be made in this direction with flights departing and arriving on time; safety standards being met and the staff and employees treated fairly and given their due rights, the Prime Minister also directed the board members of PIA to hire professionals to take charge of and run the national carrier to ensure that it begins to leave behind its volatile past and to move towards more a profitable road.

With Nawaz Sharif having showed great interest in ensuring the carrier’s revival, steps have been taken to ensure that the respected parties discuss the restructuring of the airline with him on a regular basis and to provide him with whatever updates take place. So with work being done to revitalize the national carrier of Pakistan, it is good to know that plans are being made to acquire 11 A320 aircrafts on lease which will likely to be delivered from June of this year along with the five Boeing 777 airplanes, which are to be added in the fleet of PIA’s airlines. Following this development, the carrier would gain a better standing and would be able to provide better service to its passengers. Likewise revenue would increase for the company along with flights being punctual and maintenance costs being reduced which would greatly influence the image of PIA positively.

Furthermore, Nawaz Sharif has also suggested that the government should work towards encouraging the privatization of PIA, which would be done via a transparent and competitive process without any kind of downsizing.

While PIA in the past was an example for many other airlines and was known for the high quality service it provided and the efficiency with which it was recognized, PIA no longer remains the national pride of the country it was once known to be. It’s performance having deteriorated over the years and caused it to become a source of embarrassment for the nation. Its fast downfall has caused it to become inefficient and to constantly having to deal with losses. The national carrier has incurred a loss of approximately Rs183 billion in the previous year with the service being offered by the carrier being equally woeful.
With the Prime Minister having been brought into the picture, the operations, sales, marketing, fleet planning and other details were brought to his attention along with the steps, which would be taken to bring PIA back in line with the counterparts, profitable airliners operating throughout the world. Among these was the closure of loss making routes, which were presently taken by the carrier but having closing them had saved the company Rs902 million per year. Furthermore, personnel holding fake degrees numbering to 330 employees had also been dismissed along with a task force set up to identify further fake degree holders. Steps had also been taken to bring into effect an SMS service, which would inform passengers of flight timings. All such promotions were to undergo mandatory processes set up by the National Testing Service to ensure that policies were followed accurately. While loss making routes were off, new routes have been introduced to ease out passengers traveling requirements. Routes which are to be added to those run by PIA now include Lahore-Quetta-Mashhad, Quetta-Lahore-Multan, Jeddah-Multan and Multan-Medina.


Apart from such efforts, 6 previously grounded aircrafts have also been brought back into operation. Having been refurbished, these airlines are now in good shape and with systems such as the Airlines Integrated Management System having been introduced; flight operation can now run efficiently and in optimum manner.

It is only with such efforts can results be seen as well as the PIA is able to attain an operating profit worth Rs1.67 billion in the first quarter of 2014 in comparison to the loss of Rs5.65 billion which it had incurred in the previous year. Such a profit was achieved by the airline carrier after a whopping 4 years which certainly shows progress and hope that the carrier is heading towards the right track. Revenue achieved by the airline valued at Rs28 billion in comparison to Rs25 billion, which was achieved in 2013.
While the amount after paying taxation and other financial costs was still a net loss of Rs1.98 billion, it was a 77 percent decline in comparison to Rs8.62 billion net loss, which had been recorded in the previous year. This suggested that the loss per share had dropped to Rs0.56 from Rs2.86.

Recently, the National Assembly was informed that a number of steps have been taken by the government to bring PIA’s performance back up. Apart from the efforts already mentioned, others steps taken up by the government include an injection of Rs16 billion for the purpose of debt servicing; financing for the acquisition of 11 narrow body aircrafts on dry lease; acquiring 4 narrow body aircrafts on wet lease from Czech Republic and Turkey; the overhauling of 777 engines along with cost cutting practices and route rationalization. Furthermore, it was mentioned that the government also has plans to divest 26 percent of its share to a strategic partner with total management for a period of 1 year through the Privatization Commission.

With such efforts being undertaken by the government, results of the improvement of the airline carrier are already beginning to come into the limelight. With the continuance of such dedicated efforts and with zero tolerance for ineffectiveness, the likelihood of Pakistan International Airlines once again becoming the nation’s prestige will rise significantly. Concerted efforts by both the government and the management of PIA can ensure its profitability once again thus, allowing the carrier to be at par with some of the world’s best airline carriers operating in the world today.


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