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Will Pakistan International Airlines survive its troubles?

While the whole industry has been battling the current crisis, Pakistan International Airlines (PIA) has been looking down at an even deeper one. Ravaged by the pandemic, a commercial aircraft disaster, fall out due to fake pilot licenses, and subsequent bans to operate to Europe and the United States, PIA has quite the road ahead of itself. But the Pakistani government and the company’s board is determined to make the airline to carve its own path and become financially independent.

Pakistan International Airlines stepped into the international spotlight, under no wish of its own, in May 2020. The airline’s Airbus A320 crashed in Karachi, Pakistan, after a failed belly-landing attempt, as pilots did not lower the landing gear upon landing, claiming the lives of 97 people. The crash seemingly opened a Pandora box of corruption, including many pilot licenses that were found to be fake.

The investigation into fake pilot licenses began in February 2019, much earlier than the crash. However, the crash and the investigation got mixed together, the end result was a ban from operating flights to Europe, the United Kingdom and the United States.

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Cleaning house

In August 2020, Pakistan International Airlines let go of 60 pilots, 28 of which held fake licenses, according to the carrier. However, the damage was already done at the time. Europe, the United States, and Canada markets accounted for 16% of PIA’s total 2019 revenue, according to its latest yearly financial report. Losing a significant chunk of revenue, for an airline that already has not demonstrated an ability to be financially stable, was a huge hit amidst a pandemic.

 

After all, PIA’s finances had just improved.  In 2019, it finally managed to achieve a positive gross profit, a number that indicates the amount a company makes after deducting costs to provide its services. While other operating expenses sent the flag carrier’s finances into the red once again, at least it was somewhat of a positive note to end the year.  However, it still had a lot to trim – its employee headcount at the end of 2016 was 13,947, while the fleet stood at 43 aircraft. To compare, Aer Lingus, the Ireland-based airline had 56 aircraft at the end of 2018, while it employed 2,658 people. A stark difference, to say the least, which resulted in very expensive day-to-day operations at the airline. By the end of 2019, it trimmed its employee headcount further and on average, counted 11,740 workers in the company.

Keen government

The government is also keen to make strides to see PIA operate profitably, according to local media reports. Up to 3,000 positions were deemed redundant by the company in September 2020, including the fact that it would sell off non-core assets in order to significantly reduce costs.

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