LAHORE - Most of the aviation experts are of the view that political interference is the main reason behind the worst situation of the national flag carrier.

Although there are many other factors, including over-staffing, pilferage, ‘sifaarish culture’, pressure groups and unionism, political interference is playing its major role in the PIA decline.

A former PIA officer, while talking to this scribe, said, “The organization is highly politicised and government interference in the management affairs is widespread, which can be gauged from the appointments of two operating captains by Asif Ali Zardari despite the fact that they had no experience in core airline functions of marketing, planning and finance. The Ministry of Defence, headed by Defence Minister Ahmed Mukhtar, was responsible for running PIA affairs at that time. During the present government tenure, the PIA affairs were handled through Adviser to PM on Aviation Shujaat Azeem. He appointed Nasir Jaffer and Azam Sehgal. During this period, even a German national, Bernd Hildenbrand, was appointed PIA CEO. Currently, the affairs are managed by Adviser on Aviation Sardar Mehtab Abbasi. He has appointed Musharraf Rasool as CEO and president of PIA. During this period, Aviation Secretary Irfan Elahi had his own role in interfering with PIA affairs through Acting CEO and CFO Nayyar Hayat.

The CEO of the airline is nominated by the government in power, which is always a political choice rather than a merited appointment.

Application of quota system (which has been misused) in PIA has destroyed the HR asset, whereas inductions in private sector and foreign airlines are purely on merit. Presently, PIA’s HR is extremely poor and incapable of resurrecting the organization.

The PIA unions/associations (presently six in number for different categories of employees) are strong and have the backing of every incumbent government and operate as a parallel management.  They act as a stumbling block in the airline’s improvement effort.

Appointments/transfers/postings/promotions are generally not made on merit. The promotions within the organization mostly take place under political influence and sometimes on seniority basis rather than being purely performance-based. Many of the personnel holding positions of deputy managing director and director since early 2008 do not qualify to be even supervisors. They have reached this position due to political influence.

Another PIA senior officer, seeking anonymity, said the members of the PIA Board, especially during political governments, did not take interest in the affairs of the airline. Many are not even moderately qualified or strong professionals and reach the board to get privileges because of connections. They have failed to offer prudent guidance to the management for turning around the airline and have failed to monitor the affairs seriously.

Frequent changes in the top management to accommodate favourites have been occurring in the organization. This leads to inconsistency in policy, lack of ownership, shifting of responsibility and start of blame game.

The principle of ‘right person for the right job’ is not the criterion in the organization for senior management positions. A pilot can be placed in HR department, a marketing man in services department, an engineer in marketing department and an HR man in procurement department at the pleasure of the top management.

A PIA engineer said liberal traffic rights are being granted by the government to foreign carriers, especially Gulf-based state-backed airlines, since 1990s (in exchange for under-the-table payments to rulers). In other countries, traffic rights are given on the basis of quid pro quo. The successive governments have not adhered to the principle of reciprocity. An analogy to this somewhat can be the flawed FTAs signed by the government with foreign countries which have encouraged liberal imports, but dampened exports causing imbalance in trade. There is a need to revisit air services agreements/bilateral agreements for rebalancing.

PIA’s foreign currency revenues are converted into equivalent rupees and reported in the audited financials. Considering the rupee devaluation factor over times, the overall real revenues (translated into dollars) have actually gone down significantly over the years. The revenues reported in the audited financials should, therefore, be carefully examined as it does not portray the actual trend.

Over the past 10 years, PIA has been facing huge losses, but the pay package of the employees at all levels is being periodically increased. What is the justification for increasing salaries when the airline is facing huge losses? Some personnel in senior management position have been hired on contract against exorbitant emoluments.

Several cosmetic things like change in logo/livery (under consideration of PIA management) on PIA aircraft do not augment revenues or attract more passengers.

The management even failed to take advantage of the drastic fall in oil prices from 2015 onwards and continued facing huge losses whereas other airlines took full benefit from the drop and improved their margins.

Yet another senior officer said the management would have to formulate minimum five years fleet plan on war-footing basis to revive the PIA glory. Route rationalization should be exercised in order to improve the financial health of the airline, he added.