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PIA slashes salaries by 50%

The policy of pay cut is embraced citing losses from the prevalent circumstances of restricted economic and tourist activity across the globe.

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PIA issued a notification according to which a cut of 50% in the allowances and special salaries of the technical staff such as aircraft engineers will take effect from January 2021. The annual increment, however, is stated to be at 5% of the basic salary.

All the aircraft engineers, engineering instructors, DCEs and chiefs will be subjected to this reduction of 50% in pay, as per the notification issues. The policy of pay cut is embraced citing the prevalent circumstances of restricted economic and tourist activity across the globe.

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Prior to this, another notification was issued in October in which PIA announced to cut the salaries and other additional perks of its pilots by 25%. According to that notification, entitlement to allowances was subjected to the completion of 50 flight hours per month by pilots. The guaranteed allowance paid to pilots, regardless of flight hours, was also reduced to 50 flight hours instead of 75 flight hours.

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PIA incurred losses of PKR Rs32 billion (approx.) in 2020 because of covid-19 and the lockdowns which followed. Apart from the harsh effects covid-19 had on PIA’s income statement, the national carrier has also suffered from a history of mismanagement, corruption and nepotism during the past tenures. The present government’s efforts of reviving PIA lead to a management change due to which PIA was able to record its first profit of PKR Rs7.8 billion in 2019-breaking the 8-year long ominous streak of losses.

PIA was showing signs of recovery with a number of new reforms introduced-three of the grounded aircrafts were made operational from PIA’s own resources, improvement in seat factor lead to an increase in the passengers, the volume of cargo also improved significantly, implementation of HITIT system further resulted in savings of as much as $10 million.

The Aviation Minister, Ch Ghulam Sarwar’s speech, June 24, in the parliament was nothing short of a fiasco for a PIA which was planning its recovery through reforms. After the speech whatever credibility PIA had across the world was lost, EU along with the UK suspended PIA’s license to operate for 6-months in July 2020. CNN ran a story, June 25, quoting the aviation minister that “almost 1 in 3 pilots in Pakistan have fake licenses, aviation minister says.” A total of 27 Pakistani pilots working at different locations worldwide were grounded with Gulf countries demanding details of Pakistani pilots operating in the Arab countries. The European Commission has decided to retain the ban until all the safety conditions are fulfilled.

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Covid-19 triggered circumstances further lead the decline in PIA’s upward trajectory-normal operations halted during the first week of March. The key season of Umrah and Hajj was also lost as KSA implemented strict lockdowns with just locals in limited numbers allowed to enter the Holy sites. In addition to the losses being incurred, the accumulated debt of PIA stands at PKR Rs400 billion with annual interest at PKR Rs24 billion (2019).

These operational losses and mismanagement has paved way for other firms to gain the lost market share of PIA. British airline Virgin Atlantic will commence its operations in Pakistan from December 13 after approval from the Pakistan Civil Aviation Authority (PCCA). The Airline has initially announced three routes to Pakistan from the UK, i.e. London-Lahore, London-Islamabad and Manchester-Islamabad.

With reforms in place and a change of management, PIA managed to set wheels in motion but a series of blunders and covid-19 dealt a hard blow to its planned recovery.

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