PIA in transition
The cryptic announcement by the Ministry of Defence on July 7, 1990 that Arif Ali Khan Abbasi was being replaced as Managing Director by Air Marshal Farooq Feroze Khan, who in turn, vacated his job as Chairman for Col. (Retd) Sarwar Cheema, the Minister of State for Defence did not come as any great surprise. Given no room to manoeuvre as Managing Director PIA, Arif Abbasi had resigned, turning down an attempt to put him out to pasture as head of a subsidiary company, a favourite PIA ploy for unwanted Managing Directors. Mr. Abbasi’s demeanour the day after did not suggest any acrimony or bitterness, as a professional he matter-of-factly relied on the stark truth that one cannot run a modern airline with too many political managers (or cooks) interfering.
Arif Abbasi is an extremely competent individual. Notwithstanding his appointment by political favour, superseding some of his former superiors, he would have on his own merit become PIA’s Managing Director one day, sooner rather than later. When Air Marshal (Retd) Nur Khan ran the airline the second time, he was one of his whiz-kids, managing the Management Information Systems (MIS), then becoming his Special Assistant, thus having a total overview of the Administration and Operations of PIA. Above all, Abbasi was from within the airline (circa 1970), sheer merit showing through in his ascent, management from outside tends to act like absentee landlords (they usually come to enjoy PIA’s many perks only). Furthermore, he did inculcate “a deep sense of participation and belonging among all the cadres of employees “(the words in parenthesis are taken from the Union’s statement on his departure).
Arif Abbasi symbolizes a group of professional high-powered PIA executives who can perform extremely competently in any corporate position, running an airline is a dynamic task. He brought in certain exceedingly refreshing changes within PIA, even the cabin crew, whose normal performances varies from outstanding (sometimes) to miserable (mostly) came up on the general average, the Cockpit Crew continued their Above Average ratings as did the Ground Engineering staff. To a conservative business analyst, the profligate methods employed by Mr. Abbasi would seem to be financially costly in the long run.
The “more carrot, less stick” policy was ambiguous, over the longer term the Unions were likely, having whetted their earlier appetite, to make more demands in the manner of tigers becoming man-eaters after tasting blood. For the moment, the policies being followed seemed to be having a gradual but definitely positive effect, but in the longer term with no ban on recruitment, it had to be a losing battle. One of the most overly staffed airlines in the world, PIA is almost five times in personnel size to that of a modern airline with a similar fleet. Wrong management policies about having in-house employees instead of contracting out various services led to PIA making departments out of them though it is normal for all modern airlines to have Contracted-out services for many areas, e.g. security, cleaning services, catering, etc. PIA’s present burdening overheads are under further strain, with more and more people coming onto the payroll because of political patronage, an orgy of nepotism that knows no end and that Arif Abbasi has not been able to totally avoid. Things have gotten out of control, among other statistics PIA has the most General Managers per capita than any other airline in the world, needless to say some appointments are less than deserving. PIA has not reached a stage where the airline can be said to be in total shambles, in comparison to many airlines of third world countries it is better than average. Given that it ranked among the TOP TEN at one time anything less than a rating of Excellent or Above Average is not good enough. At the same time one must acknowledge that we tend to be extremely critical in our judgement, measuring PIA against a very exacting scale. The fact is that Arif Abbasi, having all the right potential and credentials for the job, would have ultimately botched it if he had succumbed totally to political pressures. The double tragedy is that the fallout of his dismissal is going to upset the airline because of his inherent popularity among the staff. Loyalties can be easily bought over by an incumbent, it remains to be seen whether the Unions carry out their vows of fealty to Mr. Abbasi in the first flush of his exit.
Over the past two decades he has been undeniably the first correct choice for the post of Managing Director, the second tenure of Nur Khan not being as useful as the first. Many businessmen will have reason to question his corporate madness in the disbursing of largesse at will to PIA employees, the fact remains that for the past few years, PIA’s rank and file have not had a wage increase. The Pilots and Navigators had managed meaningful increases from the previous Chairman, Air Marshal Daudpota, after forcing a long go slow period and protracted negotiations. It was on the cards that the other employees of PIA, though commensurately already the most well paid personnel in Pakistan, would get adequate increases in salaries and other benefits. Bringing all the disparate Unions to the negotiating table and hammering out a salary package acceptable to them has been a real achievement. Since this was agreed to by all the Unions there exists no further grounds for internecine disagreement between them, given the state of affairs in nearby Pakistan Steel this is something to be proud of. While the agreement was hailed in the media, one or two things were cause for attention, namely (1) the concessions given to the Unions which brought them all in agreement, a first in Pakistan given the present political climate and (2) the accumulated financial cost to the airline (Rs.1000 million) exceeded last year’s profits (Rs.580 million or thereabouts) by about 100%, converting profit into a commensurate loss. While the peace among the worrying Unions may be vital to revitalization of PIA, Arif Abbasi may have given away quite a bit. One has the sinking feeling that to avoid PIA’s going into a loss, the extra cost will be passed onto the paying passengers in yet higher domestic airfares.
Out of concern for Arif Ali Abbasi’s “abrupt removal” some of the Unions have now got together to create a Council to agitate against the decision. While Air Marshal Farooq Feroze Khan has tried to control emotions by stating that, “the top management may come and go but the PIA employees would remain”, there is likely to be trouble. Known to be staunchly resisting increasing directives for appointment of favoured individuals in various PIA slots by the PPP hierarchy while opposing the purchase of a particular type of aircraft for PIA’s fleet modernisation programme because the equipment was being pushed not on merit but by vested political interests etc. etc, a vision emerges of Mr. Arif Ali Abbasi, sword in hand, St.George-like, standing in the drawbridge in defence of PIA against the political dragon. Considering that it was the political party that formed the elected government in late 1988 that brought him back from the cold back to PIA as Managing Director, the falling back on conscience was rather strange, not in keeping with the trend in vogue at this time, in fact a corporate rarity. There were many senior personnel within PIA still serving who were senior to Arif Ali Abbasi in his previous incarnation in PIA, by their supersession the PPP regime had displayed enormous confidence in Arif Abbasi’s abilities to deliver. Besides walls, courtiers have ears and the news of his independence started to filter back to the powers-that-be, who were not amused by the sight of their protege standing on principle (and thus upto them) more often than not. In essence, Mr. Arif Abbasi’s goose was cooked when he did not turn out to be the pushover appointee that PPP really desired in their concept of the Managing Director’s incumbency. It was only a matter of time before some straw emerged to break the camel’s back, an occupational hazard for a man of conscience. To bring PIA upto par, one may be able to find someone capable, one may even find someone with conscience, in Pakistan the combination is rather rare. The Nur Khan formula, bringing serving Airforce officers as Managing Directors of PIA worked once, may work again but one is sorry to say that the only real solution to PIA’s problems is to reverse the overstaffing and create competition by complete deregulation as was done in the US. The creation of another airline (or even more) in the private sector will create more suitable jobs which many of the surplus staff in PIA can fill, thus making PIA leaner with respect to its perennial and recurring red ink in its balance sheet. By the horizontal movement of staff, vertical slots for promotion will be made vacant thereby easing frustration within PIA for deserving staff who should have been promoted long ago.
The termination of the present monopoly situation employed by PIA will give a better, more economical service to the paying passengers. We have seen the effectiveness of deregulation on the airline industry in the US in reducing airfares in an open-sky competition. A new parallel Duty Free Shop is being created to compete with PIA Duty Free Shops, why not another airline? The same overriding principle that competition improves efficiency while lowering costs will apply. PIA is on its way to becoming a white elephant despite the efforts of its executives and some of its effective departments, for the sake of our national pride and prestige we need to take swift decisions immediately.
A young, dynamic (and now experienced) former managing director can easily find a job managing another airline.
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