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Capt Shujaat Azeem, who flew fighter jets before becoming pilot to Rafic Hariri, the tycoon and Lebanese prime minister, was invited to overhaul Pakistan’s aviation sector and return PIA to the glory days he remembered from his childhood
By Rob Crilly7:30PM BST 31 May 2014
Capt Shujaat Azeem is the pilot and businessman fighting to restore Pakistan International Airlines’ battered reputation
It was another sorry chapter in a once great airline’s history. When police officers boarded the twin-engine Airbus at Leeds-Bradford airport last year, the captain had a ready excuse for the alcohol they could smell on his breath.
In Pakistan, explained Irfan Faiz, pilots only have to allow 12 hours between “bottle and throttle” to ensure they are sober enough to fly.
That did not satisfy a judge at Leeds Crown Court, and the pilot was sentenced to nine months in prison for having three times the legal limit of alcohol in his blood.
At home, the news was greeted with a mix of embarrassment and weariness – but little surprise. In its short history, Pakistan International Airlines had already gone from pride of a nation to national joke, known as Perhaps I Arrive and Panic In Air.
The man charged with turning things around is still trying to work out how any of it could have happened.
Shujaat Azeem, a pilot and businessman, shook his head as he listed the problems he had found already in his short tenure: the fuel-guzzling 747s shuttling around domestic routes, the bloated workforce and the fraud scandals of mind-boggling ingenuity.
“We had 287,000 free tickets issued last year,” he said, one of a string of statistics that he reels off in horror. “How can you ever make money like that?”
The answer is that you can’t. Last year, PIA haemorrhaged
44 billion rupees (£266m). It is only subsidies that have kept the nationalised airline in the sky, and even then nine of its 35-strong fleet of planes are unserviceable.
Last year, a new business-friendly government headed by Nawaz Sharif was voted into power, inflicting a heavy defeat on the Pakistan People’s Party with its unique combination of 70s-style central planning, low taxation and rampant corruption.
The International Monetary Fund immediately stepped in with a £4bn loan over three years, contingent on privatising state-owned industries including PIA. That means somehow turning it into the sort of business an investor might want to buy and they already have their sights on the right sort of aviation entrepreneur.
If the government can pull that off, then Pakistan’s economy may well be on the road to recovery – but there are big challenges ahead.
Capt Azeem, who flew fighter jets before becoming pilot to Rafic Hariri, the business tycoon and Lebanese prime minister, was running a ground handling company at the time. He was invited to overhaul Pakistan’s entire aviation sector and return PIA to the glory days he remembered from his childhood.
“It was the epitome of style. PIA was going places. It was one of the prides of this country,” he said.
The airline’s history mirrors the history of Pakistan, its highs and its lows. It was born out of the maelstrom of partition from India in 1947, and shaped by the politics and geography of a new country.
It began life as Orient Airways, set up on the instructions of Muhammad Ali Jinnah, Pakistan’s founding father, who knew that his dream of an independent homeland for Muslims would need its own transport infrastructure.
One of its early tasks came in the immediate aftermath of partition, when its small fleet formed part of a relief operation ferrying Muslim families to the new state from Hindu-dominated India. In the years that followed, its role was to try to cement the two wings of the new country – today Pakistan and Bangladesh – flying thousands of miles across India between Karachi and Dhaka.
PIA was formed a few years later when Orient was merged with other airlines as part of a new national flag carrier.
Those early years were marked by innovation. Even today, proud Pakistanis can reel off the milestones.
It was the first Asian airline to operate jetliners (Boeing 707s), the first to offer films to all classes of passengers and the first to induct the 777-200LR into its fleet, the longest range commercial airliner.
Such was its success, that it became the template for new airlines. In the 1980s, when Sheikh Mohammed bin Rashid Al Maktoum decided to launch an airline in Dubai, he leased his first two aircraft and their crews from PIA. Today Emirates is going from strength to strength.
In contrast PIA’s creaking fleet is nothing but a case study in mismanagement. Before Capt Azeem stepped in, dozens of domestic flights would be cancelled each week. Sometimes planes would be taken out of service at a moment’s notice for the use of a minister and entourage leaving passengers stranded.
Since the 1970s, the airline has suffered three hijackings and five fatal crashes. The worst came in 1992 when an Airbus A300 crashed on approach to Kathmandu, killing all 167 people on board.
The horror stories are legion: blocked toilets, unfriendly staff, in-flight entertainment systems that don’t work for the duration of the eight-hour flight from Islamabad to London.
One foreign aid worker described being stuck on the tarmac last year when smoke billowed from an engine on a 747.
“The cabin crew opened an emergency exit but then realised they couldn’t close it. The door pretty much fell off,” she said.
The biggest problem, said Capt Azeem, was an aging fleet. His first priority is to retire the three 747s after this year’s Hajj – when thousands of Pakistanis will travel to Mecca – replacing aircraft that are almost 30 years old with newer fuel efficient models.
Such is the makeshift nature of the schedule, with aircraft having to fill gaps as others are sidelined for emergency maintenance, that long-haul 747s and 777s frequently carry passengers between Islamabad and Karachi or fly empty at exorbitant cost.
Five 777s are due in coming weeks, along with 11 leased A320s for domestic and medium routes, which will begin arriving in July.
That will slash fuel costs, said Capt Azeem, a figure that currently accounts for more than half of all PIA’s outgoings.
Already punctuality has improved and with flat bed seats planned for long-haul flights for the first time, Capt Azeem believes he can lure back wealthy Pakistanis, foreign diplomats and businessmen who have fled PIA. They prefer to spend their money on comfortable Gulf airlines and a menu that goes beyond chicken curry and a cheese paste sandwich – despite their unsocial timings and indirect routes to Europe and Canada.
“Our flights are direct and we fly at better times of the day. If the food is good, if the service is good, there’s no reason why they would not want to take PIA. We have a population of 180 million people. Over 1.1 million Pakistanis live in Britain. We have a lot of people in Paris, a lot of people in Barcelona, Milan.”
Unprofitable routes, such as to Amsterdam, have closed. The baffling global network of offices has been slimmed down and 200 staff brought home.
“We closed Chicago. We don’t have flights there. I don’t know why we had offices there,” said Capt Azeem.
He has taken time out on a Friday evening to discuss the plans over a mug of green tea. He has another meeting later – unusual in a country where many government workers finish at lunchtime for prayers and the start of the weekend.
His years in the private sector, part of a telephone consortium that brought the internet to Pakistan in the 1990s and set up one of the major mobile phone services, mean he has struggled with a considerable culture shock in getting to grips with PIA’s problems.
Political interference has hobbled the airline, he said. For years its chairman came from the Ministry of Defence and jobs were treated as gifts.
“Anyone who wanted to do someone a favour, they would hire him into the airline,” said Capt Azeem. “Corruption is another thing that has brought down this airline. In every contract there was a kickback or something like that.”
The result was an airline that employed 772 staff per aircraft - another number that seems burned into Capt Azeem’s brain – compared with fewer than 200 at other airlines.
Several hundred have already been dismissed after an investigation found they had faked their qualifications. And there are ambitious plans to transfer hundreds more jobs into standalone catering, maintenance and training operations in partnership with private companies.
For now, though, much of his time is spent undoing the various mystifying decisions taken in recent years – such as removing business class seats from the fleet of A310s.
“We still had the seats, they had just taken them out. So business travellers stopped using PIA. And that’s where the money is,” he said, pausing for a few seconds contemplation. “I have absolutely no idea why they did it.”
He is also overhauling the Civil Aviation Authority after finding that planes overflying Pakistan were not being automatically billed as they are almost anywhere else in the world, reducing revenue by a third.
“That was being done manually – for whatever reason,” he said. “Well the reasons are obvious.”
He is coy about how much it will cost to make PIA profitable, with its new planes, new menus and better-trained staff. Simply running more efficient planes and trimming the fat, he said, would be enough to get close to break even.
One source of ready cash is the company’s adventure in luxury hotels. It owns the 1000-room Roosevelt hotel, close to Grand Central Station in Manhattan, and the Scribe in Paris. Selling them could raise £1 billion, enough to wipe out decades of loans that cost £6 million every month just in interest.
None of it will be plain sailing.
His tenure has proved controversial already. He was appointed aviation adviser last year, before being forced to resign for holding a Canadian passport. (Senior officials and ministers are not allowed to hold dual nationality). He was eventually reinstated after his job title was changed to special assistant.
More opposition is sure to follow. Imran Khan, the former cricketer and head of a populist political party, has promised to fight any privatisation attempts with mass demonstrations. There are frequent accusations that Mr Sharif is intent on forcing through reforms without paying due attention to parliament or the constitution.
That leaves the government’s timetable for PIA looking rather bold. Capt Azeem hopes to be in a position to sell 26 per cent of a profitable company in a little over a year’s time, to keep the IMF at bay, and to bring in strategic investor to buy more planes.
What sort of entrepreneur would be interested in taking a gamble on an airline with such a chequered history?
“We would very much welcome Richard Branson. At some stage I will be writing to him.”
By Rob Crilly7:30PM BST 31 May 2014
Capt Shujaat Azeem is the pilot and businessman fighting to restore Pakistan International Airlines’ battered reputation
It was another sorry chapter in a once great airline’s history. When police officers boarded the twin-engine Airbus at Leeds-Bradford airport last year, the captain had a ready excuse for the alcohol they could smell on his breath.
In Pakistan, explained Irfan Faiz, pilots only have to allow 12 hours between “bottle and throttle” to ensure they are sober enough to fly.
That did not satisfy a judge at Leeds Crown Court, and the pilot was sentenced to nine months in prison for having three times the legal limit of alcohol in his blood.
At home, the news was greeted with a mix of embarrassment and weariness – but little surprise. In its short history, Pakistan International Airlines had already gone from pride of a nation to national joke, known as Perhaps I Arrive and Panic In Air.
The man charged with turning things around is still trying to work out how any of it could have happened.
Shujaat Azeem, a pilot and businessman, shook his head as he listed the problems he had found already in his short tenure: the fuel-guzzling 747s shuttling around domestic routes, the bloated workforce and the fraud scandals of mind-boggling ingenuity.
“We had 287,000 free tickets issued last year,” he said, one of a string of statistics that he reels off in horror. “How can you ever make money like that?”
The answer is that you can’t. Last year, PIA haemorrhaged
44 billion rupees (£266m). It is only subsidies that have kept the nationalised airline in the sky, and even then nine of its 35-strong fleet of planes are unserviceable.
Last year, a new business-friendly government headed by Nawaz Sharif was voted into power, inflicting a heavy defeat on the Pakistan People’s Party with its unique combination of 70s-style central planning, low taxation and rampant corruption.
The International Monetary Fund immediately stepped in with a £4bn loan over three years, contingent on privatising state-owned industries including PIA. That means somehow turning it into the sort of business an investor might want to buy and they already have their sights on the right sort of aviation entrepreneur.
If the government can pull that off, then Pakistan’s economy may well be on the road to recovery – but there are big challenges ahead.
Capt Azeem, who flew fighter jets before becoming pilot to Rafic Hariri, the business tycoon and Lebanese prime minister, was running a ground handling company at the time. He was invited to overhaul Pakistan’s entire aviation sector and return PIA to the glory days he remembered from his childhood.
“It was the epitome of style. PIA was going places. It was one of the prides of this country,” he said.
The airline’s history mirrors the history of Pakistan, its highs and its lows. It was born out of the maelstrom of partition from India in 1947, and shaped by the politics and geography of a new country.
It began life as Orient Airways, set up on the instructions of Muhammad Ali Jinnah, Pakistan’s founding father, who knew that his dream of an independent homeland for Muslims would need its own transport infrastructure.
One of its early tasks came in the immediate aftermath of partition, when its small fleet formed part of a relief operation ferrying Muslim families to the new state from Hindu-dominated India. In the years that followed, its role was to try to cement the two wings of the new country – today Pakistan and Bangladesh – flying thousands of miles across India between Karachi and Dhaka.
PIA was formed a few years later when Orient was merged with other airlines as part of a new national flag carrier.
Those early years were marked by innovation. Even today, proud Pakistanis can reel off the milestones.
It was the first Asian airline to operate jetliners (Boeing 707s), the first to offer films to all classes of passengers and the first to induct the 777-200LR into its fleet, the longest range commercial airliner.
Such was its success, that it became the template for new airlines. In the 1980s, when Sheikh Mohammed bin Rashid Al Maktoum decided to launch an airline in Dubai, he leased his first two aircraft and their crews from PIA. Today Emirates is going from strength to strength.
In contrast PIA’s creaking fleet is nothing but a case study in mismanagement. Before Capt Azeem stepped in, dozens of domestic flights would be cancelled each week. Sometimes planes would be taken out of service at a moment’s notice for the use of a minister and entourage leaving passengers stranded.
Since the 1970s, the airline has suffered three hijackings and five fatal crashes. The worst came in 1992 when an Airbus A300 crashed on approach to Kathmandu, killing all 167 people on board.
The horror stories are legion: blocked toilets, unfriendly staff, in-flight entertainment systems that don’t work for the duration of the eight-hour flight from Islamabad to London.
One foreign aid worker described being stuck on the tarmac last year when smoke billowed from an engine on a 747.
“The cabin crew opened an emergency exit but then realised they couldn’t close it. The door pretty much fell off,” she said.
The biggest problem, said Capt Azeem, was an aging fleet. His first priority is to retire the three 747s after this year’s Hajj – when thousands of Pakistanis will travel to Mecca – replacing aircraft that are almost 30 years old with newer fuel efficient models.
Such is the makeshift nature of the schedule, with aircraft having to fill gaps as others are sidelined for emergency maintenance, that long-haul 747s and 777s frequently carry passengers between Islamabad and Karachi or fly empty at exorbitant cost.
Five 777s are due in coming weeks, along with 11 leased A320s for domestic and medium routes, which will begin arriving in July.
That will slash fuel costs, said Capt Azeem, a figure that currently accounts for more than half of all PIA’s outgoings.
Already punctuality has improved and with flat bed seats planned for long-haul flights for the first time, Capt Azeem believes he can lure back wealthy Pakistanis, foreign diplomats and businessmen who have fled PIA. They prefer to spend their money on comfortable Gulf airlines and a menu that goes beyond chicken curry and a cheese paste sandwich – despite their unsocial timings and indirect routes to Europe and Canada.
“Our flights are direct and we fly at better times of the day. If the food is good, if the service is good, there’s no reason why they would not want to take PIA. We have a population of 180 million people. Over 1.1 million Pakistanis live in Britain. We have a lot of people in Paris, a lot of people in Barcelona, Milan.”
Unprofitable routes, such as to Amsterdam, have closed. The baffling global network of offices has been slimmed down and 200 staff brought home.
“We closed Chicago. We don’t have flights there. I don’t know why we had offices there,” said Capt Azeem.
He has taken time out on a Friday evening to discuss the plans over a mug of green tea. He has another meeting later – unusual in a country where many government workers finish at lunchtime for prayers and the start of the weekend.
His years in the private sector, part of a telephone consortium that brought the internet to Pakistan in the 1990s and set up one of the major mobile phone services, mean he has struggled with a considerable culture shock in getting to grips with PIA’s problems.
Political interference has hobbled the airline, he said. For years its chairman came from the Ministry of Defence and jobs were treated as gifts.
“Anyone who wanted to do someone a favour, they would hire him into the airline,” said Capt Azeem. “Corruption is another thing that has brought down this airline. In every contract there was a kickback or something like that.”
The result was an airline that employed 772 staff per aircraft - another number that seems burned into Capt Azeem’s brain – compared with fewer than 200 at other airlines.
Several hundred have already been dismissed after an investigation found they had faked their qualifications. And there are ambitious plans to transfer hundreds more jobs into standalone catering, maintenance and training operations in partnership with private companies.
For now, though, much of his time is spent undoing the various mystifying decisions taken in recent years – such as removing business class seats from the fleet of A310s.
“We still had the seats, they had just taken them out. So business travellers stopped using PIA. And that’s where the money is,” he said, pausing for a few seconds contemplation. “I have absolutely no idea why they did it.”
He is also overhauling the Civil Aviation Authority after finding that planes overflying Pakistan were not being automatically billed as they are almost anywhere else in the world, reducing revenue by a third.
“That was being done manually – for whatever reason,” he said. “Well the reasons are obvious.”
He is coy about how much it will cost to make PIA profitable, with its new planes, new menus and better-trained staff. Simply running more efficient planes and trimming the fat, he said, would be enough to get close to break even.
One source of ready cash is the company’s adventure in luxury hotels. It owns the 1000-room Roosevelt hotel, close to Grand Central Station in Manhattan, and the Scribe in Paris. Selling them could raise £1 billion, enough to wipe out decades of loans that cost £6 million every month just in interest.
None of it will be plain sailing.
His tenure has proved controversial already. He was appointed aviation adviser last year, before being forced to resign for holding a Canadian passport. (Senior officials and ministers are not allowed to hold dual nationality). He was eventually reinstated after his job title was changed to special assistant.
More opposition is sure to follow. Imran Khan, the former cricketer and head of a populist political party, has promised to fight any privatisation attempts with mass demonstrations. There are frequent accusations that Mr Sharif is intent on forcing through reforms without paying due attention to parliament or the constitution.
That leaves the government’s timetable for PIA looking rather bold. Capt Azeem hopes to be in a position to sell 26 per cent of a profitable company in a little over a year’s time, to keep the IMF at bay, and to bring in strategic investor to buy more planes.
What sort of entrepreneur would be interested in taking a gamble on an airline with such a chequered history?
“We would very much welcome Richard Branson. At some stage I will be writing to him.”
