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The Pakistani government is preparing to lay off up to 8,000 employees at PIA - Pakistan International Airlines (PK, Islamabad Quaid-e-Azam Int'l) as part of restructuring efforts, the country's 92 News television channel reported. The flag carrier currently has a workforce of around 14,000.
The government has directed the ministries of finance and defence to reorganise the airline, giving them one month to prepare a strategic business plan for the company, to be submitted to the Economic Coordination Committee for approval. The process is being supervised by Naveed Kamran Baloch, Pakistan's finance secretary.
Sources at Pakistan's Aviation Division told the financial daily Business Recorder that the government is seeking to divest 26% of its equity in the loss-making airline to a strategic partner to take managerial control once the restructuring process is completed.
The government has earmarked PKR20 billion rupees (USD119 million) to pay outstanding PIA loans for the 2020-21 financial year, down from PKR27 billion (USD160 million) in 2019-20.
The restructuring will include the separation of non-core functions including engineering, catering, and ground handling by December 2020. The measures, if implemented, would reduce the company's total workforce by between 7,000 and 8,000 employees.
Salman Shah, an economist and former finance minister, told the Business Recorder that PIA's main issue was an unnacceptable staff-to-aircraft ratio. There are almost 500 employees per aircraft at the moment, he said, the highest such ratio in the world. What must be eliminated first at the airline is the pervading political culture, he added.
Another prominent economist, Ashfaque Hasan Khan, told the newspaper that there would be strong resistance by unions against the restructuring of PIA with backing from the centre-left Pakistan Peoples Party, the centre-right Pakistan Muslim League, the religious Jamaat-e-Islami, and the secular Muttahida Qaumi Movement. All political parties should be on board before the restructuring proceeds, he advised.
PIA is currently losing about PKR6 billion (USD36 million) per month and spends PKR24 billion (USD142 million) a year on salaries, according to the Business Recorder. Its total debt, foreign and domestic, stood at PKR400 billion (USD2.37 billion) as of June 30, 2019.
The ch-aviation fleets advanced module shows that PIA operates a fleet of 34 aircraft including eleven A320-200s, five ATR42-500s, five ATR72-500s, six B777-200(ER)s, two B777-200(LR)s, and four B777-300(ER)s. It has five more B777-300(ER)s on order from Boeing.
https://www.ch-aviation.com/portal/news/94167-pakistan-govt-to-lay-off-up-to-8000-pia-employees
The government has directed the ministries of finance and defence to reorganise the airline, giving them one month to prepare a strategic business plan for the company, to be submitted to the Economic Coordination Committee for approval. The process is being supervised by Naveed Kamran Baloch, Pakistan's finance secretary.
Sources at Pakistan's Aviation Division told the financial daily Business Recorder that the government is seeking to divest 26% of its equity in the loss-making airline to a strategic partner to take managerial control once the restructuring process is completed.
The government has earmarked PKR20 billion rupees (USD119 million) to pay outstanding PIA loans for the 2020-21 financial year, down from PKR27 billion (USD160 million) in 2019-20.
The restructuring will include the separation of non-core functions including engineering, catering, and ground handling by December 2020. The measures, if implemented, would reduce the company's total workforce by between 7,000 and 8,000 employees.
Salman Shah, an economist and former finance minister, told the Business Recorder that PIA's main issue was an unnacceptable staff-to-aircraft ratio. There are almost 500 employees per aircraft at the moment, he said, the highest such ratio in the world. What must be eliminated first at the airline is the pervading political culture, he added.
Another prominent economist, Ashfaque Hasan Khan, told the newspaper that there would be strong resistance by unions against the restructuring of PIA with backing from the centre-left Pakistan Peoples Party, the centre-right Pakistan Muslim League, the religious Jamaat-e-Islami, and the secular Muttahida Qaumi Movement. All political parties should be on board before the restructuring proceeds, he advised.
PIA is currently losing about PKR6 billion (USD36 million) per month and spends PKR24 billion (USD142 million) a year on salaries, according to the Business Recorder. Its total debt, foreign and domestic, stood at PKR400 billion (USD2.37 billion) as of June 30, 2019.
The ch-aviation fleets advanced module shows that PIA operates a fleet of 34 aircraft including eleven A320-200s, five ATR42-500s, five ATR72-500s, six B777-200(ER)s, two B777-200(LR)s, and four B777-300(ER)s. It has five more B777-300(ER)s on order from Boeing.
https://www.ch-aviation.com/portal/news/94167-pakistan-govt-to-lay-off-up-to-8000-pia-employees
