The following are the details of the Pakistan International Airlines (PIA) routes which are incurring losses on Direct Operating Cost (DOC), which is the minimum benchmark for a flight operation (Period January-December 2019);
The minister told the House that the reason of making loss is the high operating cost. It is worth mentioning here that yield and seat factor has improved on these sectors in 2019 as compared to 2018.
Ghulam Sarwar Khan told that all routes on PIA network are evaluated on a regular basis to establish operational and economic viability. He told that in order to make these routes into a profitable venture, PIA has been keeping a constant eye on the market indicators, traffic trends prevalent on these routes, adjusting ticket fares along with continuously monitoring competitor strategies.
Furthermore, the minister told the National Assembly that PIA’s Business Plan (2019-23) was presented to Prime Minister Imran Khan in April 2019, which included recommendations on PIA right-sizing and restructuring.
The minister told that a Committee lead by the Secretary Finance was also formed to manage and put up final time lines, financial support required from the government and recommendation on various captions for this purpose.
Subsequently, he added, that the Prime Minister’s Advisor on Finance & Revenue directed PIA to formulate a new Corporate Business Plan, prepared by a reputable international consultant, which would redo the requirements of PIA right sizing and re-structuring.
To achieve this task, he further told, that the approval from PIACL Board was obtained in the 36th BoD meeting held on September 5, 2019 which was also attended by the Additional Secretary Finance. The tendering process for appointment of an international consultant has been launched. The process is expected to take six months to complete the new Corporate Business Plan after award to the successful bidder.
Rightsizing and restructuring of PIA, in accordance with new Corporate Business Plan will be presented accordingly with recommendations and associated timelines, the minister told.