Air Transport World

Pakistan Int'l regains strength; Pakistan International has regained its status as one of Asia's most progressive carriers.

Pakistan Int'l regains strength

Pakistan International Airlines is doing extremely well. For 1984-85 it reported a record profit of $52 million and is budgeting for an even higher figure--$56 million--for 1985-86 (PIA's financial year ends on June 30). In August PIA attained almost complete self-sufficiency in engineering services when it completed its first Boeing 747 D Check. A month earlier it became the first Asian carrier to put the 737-300 into operation.

While today good news abounds the situation was very different from 1975 to 1981, when PIA faced bankruptcy. And PIA had already faced a crisis in 1971 with the loss of East Pakistan, but its effects were soon offset by the boom in traffic to the Gulf and the Middle East with this area accounting for 31.8% of the airline's passenger traffic in 1979-80. From 1973 to 1980 this traffic grew by 31% annually.

But, in a recent comment by the present management, "the prosperity that circumstances bestowed on the airline in the mid-'70s unfortunately set in an atmosphere of laxity. The principle of sound investment in the future while the going was good was ignored. Unions strengthened their grip and the administration started losing its hold on the affairs of the airline making inevitable a gradual decline in administrative and financial discipline. In the late 1970s and early 1980s deteriorating service standards, financial and administrative indiscipline, and unbridled union activities tarnished PIA's image at home and abroad and seriously affected the airline's profitability.'

At the end of the 1980-81 financial year PIA had no money in the bank and the payroll for its 23,548 employes (against 12,930 in 1973-74) could only be met by resorting to short-term loans at high interest rates. To pay its fuel bills to oil companies, pension funds, among other things, were used in violation of the law.

The present PIA management describes the consequences in the following terms: "In the face of mounting criticism at home and abroad, a badly shaken confidence in the airline by passengers, financial institutions and a majority of employes together with a potent threat of bankruptcy and breakdown, the military government of Pakistan intervened and a number of remedial measures were taken. …

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