Necessary Downsizing

Pakistan International Airlines (PIA) is riddled with problems, but arguably the most exigent among them is overstaffing, which has increased costs exponentially for the national carrier. After dragging its feet over this issue for over five years, the management has finally taken the sensible route and laid off 1000 redundant employees. On the surface, this sounds like terrible news for those that were sacked; 1000 employees losing their jobs in one stroke is not something to celebrate. However, given the state of the airlines and how it has been run into the ground over the past two decades, this was a necessary first step taken to reduce the operational costs of the airline.

Compared to other airlines internationally, PIA’s staff-to-plane ratio stood at 500 to 1 in 2018, which tells us for each airplane PIA operates, it has 500 staff members. Other airlines normally ensure that no more than 20-30 staff members are hired per plane. There is an argument to made regarding automation and higher salaries in other airlines leading to a lower staff-to-plane ratio, but at the same time, PIA’s exponential operating costs necessitate laying off employees that are not irreplaceable. Merely announcing a mass firing spree is not enough on the management’s part however, the redundancy process must be transparent to ensure that non-essential employees in higher salary brackets are targeted over support staff and others that do not take up a big chunk of the salary budget.

Previous plans to privatise the airline have also been derailed because of fears in government circles about the repercussions this would have for the inevitable sackings that would come about if any private firm took over operations for PIA. Political leaders and the management of PIA have been reluctant to start the redundancy process for PIA – which is completely understandable given the sheer number of people that would be fired once the floodgates are opened. The meeting on Friday between the government and PIA’s management – which led to the admission by the latter of 1000 employees fired – also featured a request by the management for an additional injection of Rs 10 billion by the government just to stay afloat. In all likelihood, the government will not be able to accede this request; PIA must continue cutting costs to stay afloat – more lay-offs might still be necessary – the government should only provide a revenue injection once it is confirmed that this time, that money will not only be used to cater to the losses.

 

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