Pakistani International Airlines which once served as worlds one of the top airline is suffering with the worst time of its history. The losses have reached to an unprecedented level as reported by newspapers. Only in 2011 the losses were about 70 million rupees daily as per http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/national/21-Jan-2012/pia-sustained-rs70m-loss-daily-in-2011
It is important to understand that PIA is run by the public money and already poverty stricken people cannot afford losses by the flag carrier instead of giving profit. One of the biggest reason for PIA's downfall is considered to be huge number of employees that it has. According to Pakistan Observer (http://pakobserver.net/detailnews.asp?id=128193) PIA carries more than 400 employees on average for each aircraft it has. This must be corrected before any improvement can be planned or made to make PIA again a profitable organization.
It is in the news already that Pakistan govt is thinking to liberalize aviation industry and if that happens PIA must be divided into 2 or 3 units competing with each in domestic market. This will allow PIA to keep its more than 18000 employees and will enable it to go for profit again in near future. Throwing the employees who have got some experience of your organization is never cost effective provided you have to pay them a handsome money as well. Leasing new planes will also be easy due to the prospects of new companies.
There must be a lot of things to look into before performing such division but sooner or later it has to be done. No airline can survive with this much fat in its organization in this fast moving and fiercely competing airline industry.
It is important to understand that PIA is run by the public money and already poverty stricken people cannot afford losses by the flag carrier instead of giving profit. One of the biggest reason for PIA's downfall is considered to be huge number of employees that it has. According to Pakistan Observer (http://pakobserver.net/detailnews.asp?id=128193) PIA carries more than 400 employees on average for each aircraft it has. This must be corrected before any improvement can be planned or made to make PIA again a profitable organization.
It is in the news already that Pakistan govt is thinking to liberalize aviation industry and if that happens PIA must be divided into 2 or 3 units competing with each in domestic market. This will allow PIA to keep its more than 18000 employees and will enable it to go for profit again in near future. Throwing the employees who have got some experience of your organization is never cost effective provided you have to pay them a handsome money as well. Leasing new planes will also be easy due to the prospects of new companies.
There must be a lot of things to look into before performing such division but sooner or later it has to be done. No airline can survive with this much fat in its organization in this fast moving and fiercely competing airline industry.
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