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| India-Pakistan |
| PIA is technically bankrupt, concedes MD |
| 2009-08-05 |
| [The News (Pak) Top Stories] Managing Director Pakistan International Airlines (PIA) Captain Ijaz Haroon Monday conceded that the airlines has technically gone bankrupt. Responding to questions in the popular Geo News programme "Aaj Kamran Khan Kay Sath", while referring to an article published in newspapers proving with documentary proof that the corporation had gone bankrupt, the MD said, "That's true. I will not try to deny the fact. I concede that PIA has technically gone bankrupt. But all this did not happen in a day or overnight or a month or a year and a half. The airlines had technically gone bankrupt since 2000. The government has been assisting the corporation. In 2001, PIA sustained a loss of Rs13 billion. The government injected money into the corporation so as to bail it out. In 2003 also the government injected money into PIA but halted the practice. As a result, the 'patient is now on the death bed'." To a question by Kamran Khan that it was misuse of the taxpayers' money and that the corporation should have generated its own revenues, Captain Ijaz Haroon said that whatever had been injected into the airlines by the government was borrowed from banks. PIA had to return this money to the banks from its own revenues with interest, which put additional burden on the corporation and pushed its debt servicing beyond 10 per cent, meaning that if it had to save 8 per cent, it still had to suffer a loss of 2 per cent. To the question of how long PIA would take to offset a loss of Rs140 billion, the PIA chief asked as to why action was not initiated when the losses accumulated to Rs140 billion, and why the losses were not stopped then. He said had the cycle of losses been disrupted it would have not soared to such a huge amount. To another query by Kamran Khan that ever since his joining the airlines, its losses jumped three-fold to 39 billion from the previous Rs13 billion while during this period he regularised the services of 6,000 contract workers, Captain Aijaz Haroon refused to accept responsibility for the same and said he was not in a position to answer this question. He said the PIA administration only implemented commitments of the government and the rulings of the courts. To yet another question as to under which theory he made 20 per cent raise in salaries of the contract employees, allowed them free air travel, medical facilities and pension rights while facing a loss of Rs2 billion according to a quarterly report, he said all those employees whose salaries were raised were members of the CBA and SASA. Their number was over 17,000 and they had not been allowed even annual increment for the last several years. "I took charge in May 2008. How much has inflation gone up during this period? Airlines across the world have not earned. Where we saved in dollars, we also paid in dollars," he said. Kamran Khan asked that last year the MD negotiated with pilots at the PALPA platform. He is himself an active member of the Pilots' Association and knew that across the world pilots were being sent on forced leave and facilities withdrawn from them. Indian Airlines and the British Airways did so but unlike them he made considerable increase in the emoluments of PIA pilots, Captain Aijaz said they have adopted such a schedule that if a pilot avoids a flight he could not draw additional amount but only the monthly salary. He denied seeking money from the government even for paying off interest on the loans. To a question as to why 27 planes were being purchased when the airlines was undergoing losses, he said no airline of the region had 50 per cent flat figure of 25 year-old planes. "Our Airbuses were old so we purchased new ones. We have no Alladin's lamp to set everything right overnight. Repair of the old planes cost more. We saved money by purchasing new planes rather than spending it on repairs of the old ones. We have to pay the first installment of $1.47 billion on purchase of new planes in five years. We have to pay Rs3 billion to PSO. On the other hand we are spending Rs11 billion on maintenance of the planes. We have increased earning of PIA." Captain Haroon posed a counter-question as to why Kamran Khan did not ask about the losses from his predecessors and why he alone was being made answerable. When reminded of his claim while taking charge that he would restore the health of the airlines within a year, Captain Aijaz Haroon said PIA has many wings, they have their own advisers and their consultants are doing their job and could respond to the queries but he has as a whole improved the financial health of the corporation. |
| Posted by:Fred |