The federal cabinet on Tuesday discussed a plan to split Pakistan International Airlines (PIA) into two companies – new and old PIA – to pull out cash-stripped national airline from the financial crisis.
The plan was discussed thoroughly during the cabinet meeting chaired by the Prime Minister Imran Khan, and was later sent to the Economic Coordination Committee (ECC) for some changes.
The plan was originally approved by former Prime Minister Nawaz Sharif during his last tenure, back in 2015. The then government was not able to implement the plan because of strong protests of PIA employees as well as opposition parties, who opposed the move that could lead to the privatisation of the airline.
After the cabinet meeting, the Information Minister Fawad Chaudhry told Dawn that the splitting plan has been approved by the cabinet, in principle. The summary has been sent to ECC again for a few changes only, said Fawad.
Earlier in the media briefing, the minister had revealed that the operational losses of national airline had come down from PKR57bn to PKR1bn. However, he said that the “real problem of the PIA is its loan which caused an overall loss of Rs460bn”.
Earlier this month, the ECC had approved a restructuring plan of the PIA that includes splitting the entity into two, slashing about 25 per cent of the total staff, among other things.
In the ECC meeting earlier, Prime Minister’s Adviser on Reforms and Austerity Dr Ishrat Hussain had presented a plan for amortisation of PKR457 billion worth of liabilities by FY2023.
Out of this proposed amount, the ECC had approved absorbing about PKR202bn of liabilities as federal government equity in PIA during the current fiscal year, for being a non-cash transaction.
Later in an official statement issued after the ECC meeting, it was revealed that Dr Hussain made a detailed presentation on “human resource and operational restructuring” of the flag carrier.
In the presented he suggested various options for restructuring which include steps to minimise losses and transform PIA into a financially viable entity. “These included human resource restructuring through Voluntary Separation Scheme (VSS), hiring aviation experts, fleet modernisation, routes rationalisation, product development and revenue enhancement measures” said the statement.
The ECC, after detailed discussion, had recommended the restructuring plan of PIACL for onward submission to the cabinet.
From : pk.mashable.com