PIA spends Rs2.1bln/month with highest aircraft-to-employee ratio

KARACHI: Loss-making Pakistan International Airlines (PIA) spends Rs2.1 billion every month to keep its big workforce with the airline having one of the region’s highest aircraft-to-employee ratios, it was learnt on Monday.

PIA envisaged bringing aircraft to employee ratio on par with the international carriers. The airline currently has 14,500 employees with 29 aircraft. It wants 250-member staff to each aircraft compared to one of the region’s highest 500 employees for one aircraft. Turkish airline has the best aircraft to employee ratio of 94, followed by Qatar (191), Etihad (211), and Emirates (231).

The airline launched voluntary separation scheme (VSS) on 7th December with the last date of application falling on Tuesday (today).

PIA spokesperson didn’t respond how many VSS applications were filed. However, the airline has said: “If the separation of required number of 3,500 employees is not met through VSS, then MSS will be launched soon after VSS”.

MSS will be based on “performance and discipline” with its deadline scheduled next month, according to a document available with The News.

“All departments / categories of employees of PIACL will be rationalised to achieve the required number of 3,500 employees. The excess employees will be mandatorily retired based on performance, discipline and value addition of the employees. The mandatorily retired employees will not be offered VSS financial package and medical / passage (air tickets) facilities will not be offered to them post retirement,” said the document related to the update on PIA restructuring plan.

“Effort is being made to let the employees get separated in a dignified way with good financial package,” it said.

The previous government decided to privatise PIA and set April 2018 as the last date of its privatisation as its losses swelled to more than Rs400 billion since 2008. Under the law, the management control of the PIA continues to remain in the hands of the federal government and majority shares could not be transferred to any private party. The current government excluded the airline from the privatisation list and opted for rather more unpopular restructuring.

In a cost-cutting move, the carrier will also separate non-core functions. For food, engineering base maintenance and technical ground services, the tender processes have already started. Manpower will be mandatorily retired and transferred to the joint-venture companies. The shifting of precision engineering centre to Pakistan Air Force is under process. In November, the airline closed courier service Speedex and laid off employees.

“By next year, we will probably have 7,500 regular employees,” the PIA’s spokesman said earlier this month.

PIA expected to shift all divisions of commercial department, HR including legal, industrial relation and flight services by end of coming January. By end of February, flight operations (including scheduling) and medical division, corporate development department, works and supply chain management will be relocated.

Divisions of internal audit, corporate secretariat and finance department will be shifted by March-end and engineering department by June-end.

PIA has already rationalised allowances, curtailed duplication of allowances and revised transport and dearness allowances.

Under the restructuring plan, the airline proposed government to issue health cards to the employees with discontinuation of present model.