IATA Consultancy Presents PIA Business Plan 2022-26

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HR Transformation of PIA: Success Story of an Unbelievable Task

Feb 01, 2022 (Islamabad): World’s premium aviation consultancy agency, IATA Consultancy, presented a comprehensive business plan for the national flag carrier covering the period 2022 to 2026 to the Minister of Finance and Minister of Aviation, here on Tuesday.

The business plan preparation was commissioned by Ministry of Finance last year consequent to the report by the ex-SAPM on Public Enterprises Reforms Dr. Ishrat Hussain to the Prime Minister and the federal cabinet. Dr. Ishrat’s report; which was also termed as a complete restructuring plan for Pakistan International Airlines (PIA) with the objective to not only turn around PIA towards profitability, but also converting it into an agile business unit, focused on its core operations.

As the plan involved financial restructuring to the tune of hundreds of billions of rupees, the officials at the helms of finance ministry and the planning commission demanded a Business Plan prepared by an international consultant for PIA before committing to the huge amounts.

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The International Air Transport Agency’s (IATA) consultancy services were hired for that purpose, which after one year of spade work has developed a 5-year Corporate business transformation plan with the current year 2022 as the base year and going all the way to 2026.

The key postulates of the business plan encompass, financial restructuring, independent decision making, re-organization of company structure, restrictions to Core Business, Financial discipline, Human Resource (HR) rationalization cost controls, review destinations, a fleet planning exercise and network expansion thereby increasing PIA’s network spread and passenger uplift.

PIA’s fleet is expected to grow from current 29 to 49 by 2026, comprising of 16 wide body, 27 narrow body and 6 turbo propellor aircraft.

The fleet will be used to expand on current productive routes of United Kingdom (UK), Kingdom of Saudi Arabia (KSA), United Arab Emirates (UAE) and Gulf sectors as well as will be operated on identified markets of Baku, Hong Kong, Istanbul, Kuwait, Tehran, Urumqi and Singapore. Resultantly PIA’s passengers would grow from 5.2 million pax per annum to 9.0 million pax per annum and revenues to grow to US$ 1.7 Billion per annum by 2026.

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Pakistan International Airlines with these initiatives will achieve break even by 2025. The assets of PIA will also increase from current US$1.196 Billion to US$2.183 Billion. The national flag carrier which is currently operating 359 round trip flights per week, will be operating 581 round trip flights at the end of the program.

The outlook also takes into account the global aviation scenarios and challenges, most specifically the COVID-19 pandemic related travel restrictions and reduced demand, and the macro environmental / economical challenges faced by the country.

However, the plan has been made conditional to certain factors, most important of which is the commitment by the Government of Pakistan to undertake the Financial Restructuring of PIA for the legacy debt on its balance sheets and which are beyond the serviceable capacity of the airline.
This will also ease the burden on its cash flows, enabling it to undertake product improvements initiatives, critical for its long-term sustenance.

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The plan also urges the government to ensure compliance to the National Aviation Policy in its true spirit, providing a level playing field to the Pakistani carriers, which often find themselves at a disadvantage in their own country. Additionally, IATA Consultancy is of the view that PIA maybe run under private management rules, also pertaining to the procurement practices.

It also suggests that external influence on company matters may be curtailed and the consistent public scrutiny may be scaled back as it not only hinders with the critical corporate responsibilities of the managers, but also creates a negative PR for the company resulting in its corporate repute and revenue streams.

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