To the dismay of travellers, Pakistan International Airlines (PIA) cancelled almost 50 domestic and international flights earlier this week.
According to reports, the reason for cancelling was inadequate fuel supply. In addition to domestic flights, some of the cancelled flights were scheduled to fly to Dubai, Muscat, Sharjah, Abu Dhabi, and Kuwait.
The airline claimed that the passengers of the cancelled flights were accommodated on alternative flights, but it is no secret that the airline has been in a state of financial distress for several years.
PIA was once known for its slogan
"Great People to Fly With". It also played a big role in establishing Emirates in its early years, providing technical and administrative assistance as well as providing a new Boeing 737-300 and Airbus A300B4-200.
In 1964, PIA became the first non-communist airline to fly to China.
Unfortunately, since the late 1990s, the airline has been slipping from its glory days.
In the past few years, PIA has consistently reported significant losses and its debt burden has continued to mount. At present, PIA's debt and liabilities stand at Rs 743 billion ($2.6 billion), five times more than the total value of its assets.
Hence, it comes as no surprise that the airline was recently approved to be
privatized by the federal Cabinet, which means the government wants to sell PIA off.
Sputnik India spoke to former PIA district manager, Syed Tariq Ismail, who said that selling PIA is a good idea.
The situation worsened after the global
COVID pandemic and amid mounting concerns, the Aviation Ministry had requested an immediate "cash injection" of Rs 23 billion ($83 million) last year, also asking for the suspension of duties, taxes, and service charges to domestic agencies.
However, reports suggested that these requests were not accompanied by a concrete and viable business plan.
Mismanagement, inefficiency, and corruption within PIA have also contributed to its inability to secure a steady supply of jet fuel. These internal issues have hindered the airline's ability to negotiate favourable fuel contracts and maintain operational efficiency.
Moreover, the global rise in oil prices has had a significant impact on the aviation industry worldwide. As PIA heavily relies on jet fuel to operate its fleet of aircraft, the soaring costs have put substantial
financial pressure on the airline.
The consequences of PIA's loss-making and operational disruptions extend beyond the airline itself and have significant implications for Pakistan's economy.
According to Ismail, PIA plays a crucial role in connecting Pakistan to the rest of the world, facilitating
tourism and trade.
According to him, the government has frequently injected financial support into PIA to keep it afloat.
To address the crisis at hand and the broader
economic implications, Pakistan may consider urgently implementing reforms in PIA. This includes streamlining the airline's operations, reducing inefficiencies, tackling corruption, and exploring public-private partnerships or privatization to inject fresh capital and expertise.
Although the Air India fleet now has 130 aircraft and a much better global air routes network, in 2020, the Indian Civil Aviation Ministry was really struggling and had no choice - either privatize or close the airline.
Hence, PIA's comprehensive reforms may ensure
sustainability in the future with priority to Pakistan's national economy.