PIA Revival Plan - 'PIA Two' to be Formed on Temporary Basis

[Abdullah]

Media report;



Source: [Unknown]

[CoyBoy]

^ But its a condition set by IMF that 26% of the airline must be sold for future loans, the govt. has no choice, obviously they wouldnt sell it if they werent instructed to, the news source is acting as if it was the govt. own decision to privatise it.

[Abbas Ali]

I don't think IMF demanded privatisation of PIA.

In its effort to get IMF loans, it was Pakistan's ministry of finance letter to IMF giving details of plan to improve financial health of PIA with steps including selling government's twenty-six percent shares of the airline to private sector. I think plans to improve financial health of other government-run organisation were also given in that letter.

Abbas

[CoyBoy]

Yes they didnt ask the govt to sell PK specifically but it was part of whatever needed to be done for future loan guarentees.

[CoyBoy]

Yes they didnt ask the govt to sell PK specifically but it was part of whatever needed to be done for future loan guarentees. However news articles seem to imply that govt. agreed to IMF terms to sell 26% of the airline, the language/wording used goes in that direction.

[Squawk_1200]

A week ago there was a rumor that Shujat Azeem soon will be visiting England to meet with Virgin Airlines president and will propose and offer the takeover of PIA and two weeks ago Chairman of Private Commission of Pakistan said that privatization of PIA is the governments first priority.

A guess is , after an attempt to sell shares to Qatar Airways and to the Chinese airlines, in response these airlines have shown no interest in buying shares or taking over management because of airlines financial health , and the local investors ( front faces or behind ) have realized that it is not worth owning PIA they might have changed there mind.

Now an attempt to reviving the airline on the foot prints of its undisturbed culture of corruptions, selling jobs and seats, money pocketing , favoritism , cronyism ,nepotism .

[Abbas Ali]

According to Geo News, Government of Pakistan has informed International Monetary Fund (IMF) that plan for strategic private sector partnership in core airline business of PIA will be completed by the end of year 2015.

Pakistan International Airlines. We have appointed financial advisors in July 2014 (SB) to seek potential options for restructuring and strategic private sector participation in the core airline business by end-December 2015 (SB). The diligence process will be completed by end-June 2015. Plans for private participation will be developed thereafter.

Abbas

[Pakistan-1]

PIA's shares should only be sold to Pakistani Investors so the airline remains under the control of Pakistanis and not some foreign Company who just wants to use PIA as a Cash Cow and not make PIA into a great airline that it once was .

[Omairi7]

I think privatisation of PIA has been finalised....

[Abdullah]

PIA's shares should only be sold to Pakistani Investors so the airline remains under the control of Pakistanis and not some foreign Company who just wants to use PIA as a Cash Cow and not make PIA into a great airline that it once was .

The airline already in 'national' hands. Now it should be handed over to some 'foreign' and professional hands to be groomed.

[AC787]

Before privatize PIA please kick out all union leaders,V.PS,JOINT SEC AND COUNCILORS.
THANKS.

[Omairi7]

Before privatize PIA please kick out all union leaders,V.PS,JOINT SEC AND COUNCILORS.
THANKS.

Agreeee...

First they need to kick out the black mailing maafia inside their organization....

[AC787]

As a step 2:
After getting rid of union personals.

Focus on all manpower employed in overhaul shops specially in Avionics and Aircraft Furnishing.

In Avionics overhaul they cannot repair on component level like troublshooting to replace transistors

Ics etc.

IFE section in Radio Overhaul shop is completely burdon on PIA.

The most incompitent people ever imagined works in that section.

Thanks

[Omairi7]

As a step 2:
After getting rid of union personals.

Focus on all manpower employed in overhaul shops specially in Avionics and Aircraft Furnishing.

In Avionics overhaul they cannot repair on component level like troublshooting to replace transistors

Ics etc.

IFE section in Radio Overhaul shop is completely burdon on PIA.

The most incompitent people ever imagined works in that section.

Thanks

With the fleet of 35 we have around 19000 employees in PIA ... Mind cannot accept this logic of so many staff for nothing , only enjoying benifits and taking healthy salaries..

[Vaqar Khan]

ISLAMABAD:

Amid divisions within its ranks on the issue of privatisation of Pakistan International Airlines (PIA), the government has given a fresh commitment to the International Monetary Fund (IMF), promising it will sell the national carrier to a strategic investor by March next year.

“The timelines to sell a minimum 26% of PIA shares were discussed during the on-going eighth review of the $6.6-billion Pak-IMF programme,” said Privatisation Commission Chairman Mohammad Zubair while talking to The Express Tribune.

He said the government stands committed to completing the privatisation transaction by March next year. “PIA’s transaction structure will be formalised within a month and shared with the Ministry of Law for vetting.”

He hoped that the transaction structure would be taken to the Cabinet Committee of Privatisation for approval next month.

“The government had faced certain legal obstacles in finalising the transaction structure, which have now been resolved,” added the Chairman. He did not comment on whether the government would offer 26% stakes to a strategic investor or sell majority shares.

Under the IMF programme, the government is bound to sell at least 26% shares of PIA to a strategic investor. But it is facing resistance from opposition parties, particularly the Pakistan Peoples Party (PPP), which is opposed to the privatisation of PIA and Pakistan Steel Mills (PSM).

The Commission has already hired a consortium comprising Dubai Islamic Bank, IATA Consulting, Deloitte, HaidermotaBNR, Freshfields Bruckaus Deringer, Abacus Consulting, APCO and Prestige as Financial Adviser (FA) for the transaction.

The IMF programme document states that the government has to complete the transaction by December this year. But Zubair said the December deadline was for soliciting bids from prospective bidders.

He said there was a misunderstanding on IMF’s part that took the deadline of soliciting bids as the time limit to privatise the entity.

The original deadline to privatise the PIA was December last year, which has thrice been revised.

While the government claims that it would be able to complete the transaction by March next year, circumstances suggest that it would be very difficult to do so. The chairman admitted that any unusual event may push the deadline ahead.

PIA and PSM are the two main public sector enterprises that are causing huge losses to the exchequer. The service delivery by the PIA also remains poor, providing a reason to the government to hand over its control to strategic investors.

According to the audited financial statement for January-March period this year, the accumulative losses of the airline increased to Rs228.7 billion – a net addition of Rs2.1 billion in three months. The total liabilities grew to Rs329.7 billion as of March this year while its assets were recorded at Rs186.7 billion.

Divided government

Despite giving a commitment to the IMF to privatise the entity by March next year, the government has not yet resolved inter-ministerial differences, according to the sources.

Adviser to Prime Minister on Aviation Captain (retired) Shujat Azeem is said to be in opposition to the privatisation.

He is in favour of restructuring and revival of the entity and under the same strategy, PIA is in the process of acquiring ten narrow-body aircraft, five ATRs and two wide body aircraft on lease. Few of these planes have already joined the fleet.

Under the privatisation law, if an entity is to be privatised it has to be placed under the administrative control of the Privatisation Commission. However, PIA is still under control of the Aviation Division, said PC officials, indicating that the Commission was facing resistance. Unlike the PIA, the PSM is under the administrative control of the commission.

The sources said the issue of Aviation Division’s opposition to PIA privatisation has been taken up with Minister of Finance Ishaq Dar. They added that the matter would now be discussed to find a solution, and if left unresolved could derail the privatisation process.

Published in The Express Tribune, August 5th, 2015.