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PIA announces voluntary separation scheme (VSS) for employees to mitigate COVID-19 losses

The PIA announces a 'voluntary separation scheme (VSS)' for employees as a way to mitigate losses due to the coronavirus pandemic

The Pakistan International Airlines (PIA) has announced a voluntary separation scheme (VSS) for its employees, including pilots and engineers, and asked them to apply for it by Dec 22.

Pakistan International Airlines (PIA) has announced a voluntary separation scheme (VSS) for its employees. The voluntary separation scheme (VSS) extends to its employees, including pilots and engineers.

The deadline for the application for the VSS is December 22nd.

The package compensation includes accumulated leaves, gratuity, provident fund, lump-sum medical, and pension up to the age of 65 years.

According to a PIA spokesman on Monday, the VSS package was segregated into two categories: firstly, those with over 18 years and, secondly, those less than 18 years of service. Furthermore different basic pay formula has been devised as per salary break-up and service years of employees, including pilots and engineers.

Read more: PIA to acquire eight new airplanes to ‘modernize’ the fleet

“The VSS package is part of PIA’s restructuring. We are trying to adhere to the restructuring of the airline, which will benefit workers.” The spokesman said under the scheme, the approval of an application will take 14 days.

The airline had appointed 72 coordinators to implement the scheme.

The coordinators are expected to help the employees in processing and implementing the separation scheme. They will also ensure that the process runs smoothly and that the employees that do apply are made privy to the issuance and other policies within the VSS separation scheme.

The coordinators would be bound to maintain a register of all such applications received and proceeded for further action.

PIA had asked for Rs12 billion funding for the separation scheme

The PIA administration has already sought a fund of Rs 12 billion from the federal government to execute the separation scheme for employees.

Federal Minister Ghulam Sarwar had previously noted that PIA is overstaffed; he said that the airline requires only seven thousand employees to function but has currently employed over fourteen thousand people.

In early November this year, the voluntary separation scheme was announced by Chief Executive Officer (CEO) Pakistan International Airlines (PIA) Arshad Malik.

He had cited the losses due to the coronavirus pandemic as the reason.

Read more: PIA-owned Roosevelt Hotel in New York forced to shut down after historic 100 years

In his video message to the employees of the PIA, Malik had said that the aviation industry was passing through tough times and facing many challenges after the emergence of the COVID-19.

The scheme will allow the PIA’s permanent employees to retire from their services along with monetary incentives voluntarily.

He explained that the VSS scheme was aimed at generating a profit and saving the airline from being bankrupt.

“65 percent (14,000) airplanes across the world have been grounded due to pandemic”, Arshad Malik said and added that airlines’ income to decrease by $419bn this year.

Airlines worldwide cut jobs.

Tens of thousands of jobs have either been cut or are under threat as the world’s largest airlines grapple with the effects of the coronavirus pandemic.

Differing timescales and the various types of measures are being adopted – from the failure to keep on temporary and contract staff through early retirements, pay cuts, furloughs, and outright redundancies – make it impossible to put a meaningful absolute figure on jobs lost.

Read more: PIA incurs loss of Rs280 million after EU suspended flight operations

However, what is clear is that of the large airlines that have announced job-cuts so far, most have implemented job cuts affecting significant proportions of their workforces.

Germany’s Lufthansa is readying to cut nearly 30,000 jobs this month, with a further 10,000 set to go in 2021. A German newspaper reported the news at the weekend.

The airline is targeting employee roles outside Germany and plans to sell its catering unit LSG this month. Next year, cuts will get made closer to home, with 10,000 Germany based jobs to go.

The EU declines to lift the ban on PIA.

The European Union has decided to retain the ban on PIA. PIA is still banned from operating in EU member states. The EU said that it was not satisfied with the airline’s steps to address its setbacks, licensing, and safety concerns.

The European Union Air Safety Agency (EASA) is however satisfied with the airline’s measures to improve its safety management system.

In response to a PIA’s letter to remove the ban, the EU aviation safety watchdog informed the national carrier that the CAA had not taken ample steps to address the licensing system and that the ban will remain in effect.

Read more: Trump makes an offer to buy PIA’s Roosevelt Hotel

It added that the CAA needed to undergo a safety audit.

The ban will only be lifted if the Pakistani aviation regulatory body cleared the audit.

GVS News Desk