Under the government's new strategy, Sarmaya-e-Pakistan will gradually take over management control of loss-making entities with improved oversight of all public sector companies, including PIA. The government's intent is to place state owned entities under the control of successful business executives from the private sector. PIA official further stated that the business plan, currently being developed, consists of cost-cutting and revenue generation measures through a detailed analysis of the market, rightsizing operations and work centres, flights and routes for the revival of the national flag-carrier.
PIA's financial restructuring will be carried out through government support and the current fleet will be reviewed and purchase of new aircraft decided, the official added. Explaining PIA's financial health, the official said the current operational losses are at Rs 3 billion per month but this bleeding would be successfully plugged once the new business plan is implemented.
"The proposed business plan includes measures to improve the airline's performance with several profitable routes like Sialkot-Sharjah, Lahore-Muscat, Islamabad-Doha and Lahore-Bangkok-Kuala Lumpur, as these routes are profitable," he stated.
PIA official said more routes have been planned by the airline, which would commence by mid 2019. These new routes include Sialkot-Paris-Barcelona, Peshawar-Sharjah, Peshawar-Al- Ain and Multan-Sharjah. He further added that there is a plan to increase frequency and capacity of profitable routes like Jeddah and Madinah, besides planning for closure of loss-making routes like New York, Salalah (Oman), Kuwait, Mumbai and Tokyo. The airline is also replacing the 20-year-old highly expensive software system with a new one (HITIT), which is cost effective and efficient. He said the airline also plans to terminate around 200 ghost employees.
An effective austerity and cost saving drive has been initiated which includes curtailment of unnecessary visits by officials at subsidized rates. The open skies policy of previous governments led to losses to the national carrier, said the official, adding that the government has decided in principle to end the open skies policy, which would help in generating revenue.
The Economic Coordination Committee (ECC) of the cabinet approved additional guarantees to the tune of Rs 5.6 billion for Pakistan International Airlines Company Limited (PIACL) for repair and maintenance of engines and acquisition of related spare parts for operationalizing grounded planes last week. Sources said that the Cabinet Committee on Privatisation (CCoP) has sought formal proposals with regard to future prospects of Roosevelt Hotel, New York, to be finalized by June 2019.
A meeting of the CCoP presided over by Finance Minister Asad Umar was recently informed that PIA intended to convert Roosevelt Hotel into a high-rise building for the purpose of giving it on rent. The meeting was further told the proposal is aimed at mobilizing resources.