The Federal Board of Revenue has frozen PIA’s accounts, and though the national flagcarrier claims its operations were not affected, there have been reports of flight delays and cancellations, as well as problems in making bookings. While the FBR claims PIA owes it Rs 2.8 billion, PIA concedes only Rs 1.3 billion. It is merely another embarrassment in a long series, but for a state-owned enterprise to have such action taken against it by another government organization is a new low. PIA has long been pampered child of the government because it is the national flagcarrier, and has received numerous bailouts, but all the plans to restructure it have failed to produce a turn-around. In 2019-20, there was a massive loss of $120 million on revenues of $330 million. This is a burden which the taxpayers continue to bear, because the airline is always getting a handout from the public treasury. A new handout is apparently being considered, for a committee headed by Finance Minister Ishaq Dar is considering the restructuring of the airline.
Previous attempts have come a cropper because the government cannnot find the political will to reduce the fat in the organization. PIA has historically been a place for jobs for the boys, with governments of all political affiliations, military and civilian alike, featherbedding PIA with a vengeance. The result has been one of the world’s highest ratios of employees per customer in the world. Another result is that every move aimed at trimming the unsustainable salary bill has been met by protests and strikes. The latest example is probably the rejection by the officers’ association of the restructuring plan, and the demand for a salary hike.
Another reason given for PIA’s lack of profitability is the fact that it has to operate certain unprofitable routes in the national interest. The solution of dividing the airline in two, with one presumably to receive a subsidy for operating those routes, and one to operate purely commercially, has also been rejected. Other SOEs should make sure their taxes are paid, lest they face PIA’s embarrassing face. With reference to the tax dispute, PIA would have collected the taxes from customers, so the money would have either been quietly pocketed, or been used by PIA to plug its balance-sheets, or both, In either case, it seems that PIA are not just great people to fly with, but also to evade with.
