Pakistan International Airlines (PIA), once the pride of the nation, has now become a liability. Its free-fall has many reasons like inefficiency, unprofessionalism and nepotism.

As a result, the airline is over Rs300 billion in debt. Its 2017 loss was about Rs45bn. The current aircraft-to-employee ratio is 780, way above the industry average of 150-200. It is 81 for Turkish Air and just 29 for Ryanair. The seat factor at PIA is 74 for domestic flights and 70 for international flights whereas the industry average is 90-plus. The average fleet age of PIA is 17 years while that of many other airlines is less than 10 years.

PIA faces many constraints. It has to strike a balance between political obligations and commercial interests. Thus, many of its past decisions relating to air service destinations, pricing structure and hiring were not purely based on merit.

Therefore, reviving PIA is a challenge that requires commitment from all stakeholders. Here’s a seven-point turnaround plan that may help revive the national carrier.

Redefine the business model: The management should transform PIA into a budget airline. India’s Indigo is a budget airline that has more than 40 per cent market share. A majority of our flyers is price sensitive. The serving of food can be reduced to save on costs. Flights of less than four hours may only have a cup of tea and chips. This will also reduce the required number of cabin crew members.

Flights of less than four hours should offer a cup of tea and chips only. This will reduce the need for extra cabin crew

Many budget airlines ask passengers to buy snacks during the flight. The cabin crew can be made responsible for aircraft cleaning. This will reduce the cost of ground crew. Engineering and maintenance should be improved to international standards. This will reduce the maintenance cost and enable PIA to earn more by providing such services to other airlines.

PIA should focus only on core activities ie flight operations (passenger and cargo) and aircraft maintenance/engineering. All auxiliary activities, like catering, hotel, poultry etc, should be made separate entities. This will also improve the aircraft-to-employee ratio.

Retain customers: Punctuality is critical in the airline business. It helps develop an image of reliability and professionalism. A majority of the flyers values timeliness more than the food served during the flight. Punctuality will also improve its load factor from 70pc to 90pc. Ryanair holds a record for punctuality (over 90pc) and load factor (93pc).

Regular training should be conducted for excellent customer handling and relationship. Luggage weight limit may be increased to 30 kilograms. The open-sky policy should be reviewed to safeguard PIA’s interests.

Explore new markets/routes: New routes and markets should be explored. Flight schedules should help foreigners in their international travel. If a tourist from Bangkok intends to fly to Europe, they should be able to have a second flight with just a 30-minute stopover in Pakistan. Similarly, a labourer from Sri Lanka flying to Dubai should have a connecting flight with only 30 minutes of stay in Pakistan. They should be allowed to visit duty-free shops.

The cargo business is increasing worldwide. PIA has an opportunity to offer cargo services if it makes some modifications in its aircraft. Emirates has a specialised cargo service for temperature-sensitive pharmaceutical and chemical products.

Restructure to be cost-effective: PIA should get rid of all its aircraft that are more than five years old. Operational aircraft are still saleable and will fetch a reasonable price. Replace them with new ones under a dry-lease arrangement. New aircraft are fuel efficient and can fly to Europe and the US.

Currently, the PIA fleet consists of Airbus, Boeing and ATR. Because of this variety, not only the maintenance cost is high but also the transferability of resources from one kind of aircraft to another is difficult and expensive. PIA should have only one kind of aircraft. EasyJet and Indigo have A320s and Ryanair has 737s.

In Europe and the United States, PIA can use secondary airports to avoid main ones that are costlier. Flight scheduling should be effective so that PIA’s aircraft are back in air within 30 to 45 minutes. Parking at airports leads to parking fees and losses in revenues. Rearranging the cabin from low density to high density will also increase the passenger capacity per flight. Most budget airlines have fixed seats without the reclining facility. The same cabin crew should be used for up and down flights. This will reduce hotel expenses.

Improve transparency: All financial transactions should be made transparent and accountability ensured at every level of management. The practice of issuing free tickets should end. Only employees and their immediate family members should avail a 50pc discount on their tickets once a year.

Acquire talent: Transparency in hiring, promotions, pay and allowances should be ensured. Services of HR consulting firms should be acquired to minimise favouritism and ensure merit.

Regular training sessions should be arranged for all employees across the board. Mid- and low-level employees should be provided with training so that they can perform other duties in the case of emergency. If the required talent is available within the organisation, it can be retained. Others can be offered a golden handshake or basic pay till the age of superannuation. This will improve PIA’s passenger-to-staff ratio. For Ryanair, it is 9,738.

Find the best leadership: The new CEO should know how to handle unions. They should be able to withstand political and other kinds of pressure. They must have a vision for the airline and a game plan to implement. There are a number of examples where airline CEOs came from different industries and backgrounds and turned around airlines. Kazoo Inamori in Japan and Idris Jala in Malaysia are a couple of such examples.

It’s time to either revive PIA or close it down to start a new one under a different brand name. The extra burden on the national kitty should be removed.

The writer is a consultant and corporate trainer for strategic management at the Pakistan Institute of Management

Published in Dawn, The Business and Finance Weekly, March 4th, 2019