http://www.dawn.com/news/1234527/the-big-debate-to-sell-or-not-to-sell-pia
"To explain the magnitude of PIA’s mess he gives an example. The PIA management had called off its flights to Amsterdam. A station manager didn’t like the idea. He went to court and got a stay.
Now the chairman or the managing director cannot do anything. The matter is with the courts.
“In any efficient organisation , the human resource is the most important asset, that’s what we read in schools,” he says, “But they have to be the best. You do regular appraisals and promote or fire people. This is how organisations work world over.”
PIA has one of the highest employee per plane ratio, which stands at above 700 employees per aircraft, while Emirates has around 220. The reason behind the massive difference is the range of services the national carrier keeps under its belt. From engineering services to ground handling to cargo management and maintenance to name a few, PIA, unlike other successful international airlines, single-handedly runs its own show.
But globally, the non-core segments of airlines business are usually outsourced to make the management leaner thus efficient. For instance, Dnata, one of the leading an airport service providers, offers ground handling services to Emirates in its home base. But PIA is top heavy with departments and runs like any bureaucratic government office."
http://www.dawn.com/news/1238662/vilifying-workers
"The inability of the government to mobilise investments on the scale required to operate a world class international airline had a crippling effect on the airline’s finances. It put the company on a high-cost path that involved renting newer planes instead. Once on a high-cost path, PIA managements had little option but to look to sell assets and cut costs. The assets that were sold first were routes and landing rights to other airlines without pressing for reciprocal rights. Eventually, it came down to having to sell hard assets, like the Roosevelt Hotel, but then politics kicked in.
....All through it, revenues continued plunging, and more and more aircraft had to be grounded. The size of the fleet shrank, giving rise to the most quoted and misleading number that has come out of this sordid tale: the employees to aircraft ratio. This ratio, we are told, is the highest in PIA. That may be true. But it is high not because too many workers have been hired. It is high because the number of aircraft the airline is able to operate on current revenues has fallen. Therefore, in order to rectify this ratio, what is needed is to find a way to rebuild the fleet, not slash the payroll."
http://www.dawn.com/news/1236878/privatisation-blues
"Unfortunately, the government must accept a big chunk of the blame for this mess. Given its plans to sell national assets worth billions of dollars, it should have initially crafted a sensible strategy in a transparent and participatory manner given privatisation’s mixed record globally. Studies from Russia, Eastern Europe and Latin America show that poorly managed privatisation processes often cause huge corruption, asset stripping, monopoly creation, increased inequality, cronyism and losses of consumer and employee welfare.
Evaluations of past privatisation efforts in Pakistan conducted by ADB, the Karachi-based Social Policy and Development Centre and other writers also reveal major issues. The performance of most privatised units had worsened; lack of transparency was common; and privatised banks had ironically become more prone than nationalised ones to lend to the government rather than the private sector."
http://www.dawn.com/news/1237330/what-ails-pia
"Yes many airlines in the world are national carriers, but almost all the examples given are from countries that can afford to run them in loss. Emirates, Etihad, Saudia, Singapore Airlines are all run by cash-rich countries that don’t have to choose between paying for their national carrier’s losses or investing in education.
Take another example being bandied about in the media: Malaysia Airlines. How many of those invoking this airline as an example know that the government of Malaysia, growing tired of the continuing losses at the airline, hired a German managing director last year whose first major step was to issue 20,000 termination letters to every employee in the organisation?"
http://tribune.com.pk/story/349491/privatisation-of-ptcl-a-lesson-for-policymakers/
"In 2005, the year of its privatisation, PTCL posted revenues of 84 billion rupees, with earnings before interest, tax and depreciation of 54 billion rupees and a net profit of 27 billion rupees. While the sector boomed worldwide and companies in other countries bought licenses in foreign markets and acquired newer technologies to retain and gain subscribers, due to the government’s short-sighted policies, PTCL was prevented from using these earnings to make strategic investments abroad.
Six years after privatisation, not only has the government failed to recover the full price from Etisalat ($800 million is still outstanding), but in various payments and opportunity cost, it has paid back almost all the amount it received from Etisalat (Technical fee, opportunity cost of delayed payments, redundancy payments).
As for the predictions that were made six years ago of a glorious future under Etisalat, unfortunately PTCL’s fortunes have declined rather than improve. In the four years prior to privatisation, profits after tax grew from about 18 billion to over 27 billion rupees, a rate equivalent to 11 per cent per annum. In the six years post-privatisation, earnings fell to almost eight billion rupees (at a negative growth of 18 per cent per annum). Similarly, the profit margin declined from an average of 71 per cent over the four years prior to privatisation, to 47 per cent over the six years since (based on an average EBITDA of 50 billion versus 43 billion) and continues to fall. This magnitude of change is unprecedented in the telecommunication sector, whether in Pakistan or internationally."
"To explain the magnitude of PIA’s mess he gives an example. The PIA management had called off its flights to Amsterdam. A station manager didn’t like the idea. He went to court and got a stay.
Now the chairman or the managing director cannot do anything. The matter is with the courts.
“In any efficient organisation , the human resource is the most important asset, that’s what we read in schools,” he says, “But they have to be the best. You do regular appraisals and promote or fire people. This is how organisations work world over.”
PIA has one of the highest employee per plane ratio, which stands at above 700 employees per aircraft, while Emirates has around 220. The reason behind the massive difference is the range of services the national carrier keeps under its belt. From engineering services to ground handling to cargo management and maintenance to name a few, PIA, unlike other successful international airlines, single-handedly runs its own show.
But globally, the non-core segments of airlines business are usually outsourced to make the management leaner thus efficient. For instance, Dnata, one of the leading an airport service providers, offers ground handling services to Emirates in its home base. But PIA is top heavy with departments and runs like any bureaucratic government office."
http://www.dawn.com/news/1238662/vilifying-workers
"The inability of the government to mobilise investments on the scale required to operate a world class international airline had a crippling effect on the airline’s finances. It put the company on a high-cost path that involved renting newer planes instead. Once on a high-cost path, PIA managements had little option but to look to sell assets and cut costs. The assets that were sold first were routes and landing rights to other airlines without pressing for reciprocal rights. Eventually, it came down to having to sell hard assets, like the Roosevelt Hotel, but then politics kicked in.
....All through it, revenues continued plunging, and more and more aircraft had to be grounded. The size of the fleet shrank, giving rise to the most quoted and misleading number that has come out of this sordid tale: the employees to aircraft ratio. This ratio, we are told, is the highest in PIA. That may be true. But it is high not because too many workers have been hired. It is high because the number of aircraft the airline is able to operate on current revenues has fallen. Therefore, in order to rectify this ratio, what is needed is to find a way to rebuild the fleet, not slash the payroll."
http://www.dawn.com/news/1236878/privatisation-blues
"Unfortunately, the government must accept a big chunk of the blame for this mess. Given its plans to sell national assets worth billions of dollars, it should have initially crafted a sensible strategy in a transparent and participatory manner given privatisation’s mixed record globally. Studies from Russia, Eastern Europe and Latin America show that poorly managed privatisation processes often cause huge corruption, asset stripping, monopoly creation, increased inequality, cronyism and losses of consumer and employee welfare.
Evaluations of past privatisation efforts in Pakistan conducted by ADB, the Karachi-based Social Policy and Development Centre and other writers also reveal major issues. The performance of most privatised units had worsened; lack of transparency was common; and privatised banks had ironically become more prone than nationalised ones to lend to the government rather than the private sector."
http://www.dawn.com/news/1237330/what-ails-pia
"Yes many airlines in the world are national carriers, but almost all the examples given are from countries that can afford to run them in loss. Emirates, Etihad, Saudia, Singapore Airlines are all run by cash-rich countries that don’t have to choose between paying for their national carrier’s losses or investing in education.
Take another example being bandied about in the media: Malaysia Airlines. How many of those invoking this airline as an example know that the government of Malaysia, growing tired of the continuing losses at the airline, hired a German managing director last year whose first major step was to issue 20,000 termination letters to every employee in the organisation?"
http://tribune.com.pk/story/349491/privatisation-of-ptcl-a-lesson-for-policymakers/
"In 2005, the year of its privatisation, PTCL posted revenues of 84 billion rupees, with earnings before interest, tax and depreciation of 54 billion rupees and a net profit of 27 billion rupees. While the sector boomed worldwide and companies in other countries bought licenses in foreign markets and acquired newer technologies to retain and gain subscribers, due to the government’s short-sighted policies, PTCL was prevented from using these earnings to make strategic investments abroad.
Six years after privatisation, not only has the government failed to recover the full price from Etisalat ($800 million is still outstanding), but in various payments and opportunity cost, it has paid back almost all the amount it received from Etisalat (Technical fee, opportunity cost of delayed payments, redundancy payments).
As for the predictions that were made six years ago of a glorious future under Etisalat, unfortunately PTCL’s fortunes have declined rather than improve. In the four years prior to privatisation, profits after tax grew from about 18 billion to over 27 billion rupees, a rate equivalent to 11 per cent per annum. In the six years post-privatisation, earnings fell to almost eight billion rupees (at a negative growth of 18 per cent per annum). Similarly, the profit margin declined from an average of 71 per cent over the four years prior to privatisation, to 47 per cent over the six years since (based on an average EBITDA of 50 billion versus 43 billion) and continues to fall. This magnitude of change is unprecedented in the telecommunication sector, whether in Pakistan or internationally."
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