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Case Study on PIA crisis

Muhammad Daheem The Pakistan International Airlines is suffering from severe financial crisis. It is, in fact, passing through a critical phase because of poor management, lack of maintenance, nepotism, corruption and financial issues. There are complaints of terrible service, long delayed flights, emergency crash landings, cancellation of flights, shortage of planes, unclean toilets that smell from a distance and non-serious attitude of the administration. These issues create frustration among the passengers. They feel fear and life risk while travelling through PIA. The Airlines is at the brink of disaster. It needs exemplary leadership, qualified and merit based staff and technically strong administration to improve its performance and save it from the clutches of the wolves. PIA has, in all, 39 aircrafts in its fleet comprising of 4 Boeing 777-200 ER, 3 Boeing 777-300 ER, 2 Boeing 777-200 LR, 6 Boeing 737-300, 5 Boeing 747-300, 12 Airbus A310-300 and 7 ATR 42-500. A number of aircrafts have been grounded due to shortage of spare parts or overhauling. These include Boeing 747s, Boisiseing 737s and Airbus A 310. It is generally believed that PIA high-ups are responsible for the inconvenience of the passengers. The whole system needs overhauling. PIA is facing serious problems. The major problems faced by PIA are increase in oil prices, overstaffing, devaluation of local currency, political interference and its weak financial position since the last decade. PIA has suffered huge loss of more than 64 billion rupees from 2005 to 2008. It has also suffered huge losses in 2009 and 2010 particularly due to increase in the price of the fuel and devaluation of Pakistani rupee. It is, now, just like a white elephant. The bad governance, poor performance and corruption are the major causes of its failure. The Pakistan International Airlines is a big organisation with more than 18000 employees. PIA was known all over the world for its excellent performance and superior quality. That was the golden period for PIA. But now it has lost his lustre. Flight delays and cancellations have become the norm rather than the exception. Naturally this situation cannot be tolerated for unlimited period. PIA will have to overpower its weaknesses. It has failed to resolve issues of its organization. The average ratio of staff should not exceed 100 per aircraft while PIA enjoys more than 400 employees per aircraft. It is overpopulated and needs to cut its coat according to its cloth. It needs some hard decisions by the administration to run the system smoothly. Pakistan International Airlines should give primary importance to the safety of the passengers and make efforts to avoid any untoward situation. Several untoward incidents occurred in PIA in the last decade. It is necessary to tackle with such incidents seriously to minimise the losses. The passengers should not suffer in its custody.

PIA has problem of maintenance and repairs. It is stated that tender for the maintenance of the aircrafts has been given to a company that does not have international reputation. It is further stated that PIA tends to sublet dubious and substandard companies with no international credibility and little experience for maintaining its fleet. Saleem Irshad, retired engineer, claims that high-ups of PIA have financial stake in these small and substandard companies. The obscure vendors, hired by PIA, are one of the major problems. They are just like risky shots in cricket. The airline that once assisted other airlines is now losing its control over itself. Its high time the government restructured PIA. It should discard its old and obsolete fleet of aircrafts and have new one to improve its overall performance. Sagging seats and soggy seat covers, messy floor carpets, dirty and gritty outlook, malfunctioning toilet doors, rattling planes and failing equipment need refurbishment, better maintenance and planning. It is necessary for PIA administration to put on considerable effort to avoid anxiety of the travellers. It is pertinent to mention that one of PIA aircrafts was inspected at Paris Airport by the inspectors of Safety Assessment of Foreign Aircraft (SAFA) while en route from Paris to Lahore. They detected several snags in the aircraft. The organization warned PIA to overpower the shortcomings or face the consequences. The team detected fuel leakage from one of the engines of Airbus A-310. In consequence passengers were evacuated in emergency. Another aircraft of PIA had been detained at a French airport owing to safety reasons. The plane was returning home from Milan via Paris. The European aviation inspectors checked it at Charles de Gualle Airport, directed the crew to off-load the passengers and then detained the aircraft. The team pinpointed 39 snags including fuel leakage from Airbus A-310. The following faults were found by the inspecting team: one panel right of NLG door bent; right fairing (inlet) cracked and bent; one latch on each engine closed by lock wire; fuel leakage on the Engine 2 pylon at the end of refueling; hydraulic leak from steering actuator; fuel leakage from the Engine 1 pylon, both wing root and horizontal stabiliser; on right wing root external one thermal protector tightened up with locking wire; engine No 2 inboard fire seal damaged; temporary repair performed on engine No 1 fire seal outboard; hydraulic seepage on wheel No 1 brake assembly etc. It is a long list of snags showing the real efficiency of the PIA administration. It is stated that crew failed to manage a quick and correct emergency evacuation of the aircraft. PIA should assure full implementation of safety standards in light of inspection report by SAFA inspectors. Unfortunately PIA is functioning with costs higher than returns. PIA claims that increase in oil prices and devaluation of Pakistani currency are the major reasons behind its deficit. It needs remarkable effort and money to improve its ranking in the world airlines. A four-day strike by Pakistan International Airlines employees caused huge financial loss. Q. While conducting a survey for your own airline, you come across with the crises of PIA, keeping in view this report, what action plan you suggest for your own airline to avoid reoccurrence. 20 marks