March 10, 2016 Print

Air travel used to be a prohibitively expensive luxury for most people, but deregulation has brought the ability to fly within reach of most socioeconomic classes in countries that have relaxed the grip of government on their airline industries. Pakistan-based Atlas Network partner Policy Research Institute of Market Economy (PRIME) hosted a recent seminar with support from the Friedrich Naumann Foundation that called for the privatization of state-run Pakistan International Airlines (PIA).

Titled “PIA – Restructure, Reform or Privatise: The Way Ahead,” the seminar explained why government control over Pakistan’s airline has brought 30 years of losses and mismanagement. The event featured a keynote address by economist Muhammad Zubair, minister of state for privatization and chairman of Pakistan’s Privatization Commission, who suggested that the only way to reverse decades of financial failure for PIA is to run it like a privately owned business.

“Please grant us powers like private sector if you want to achieve turnaround in PIA,” Zubair said during the PRIME seminar, as reported by an article from the News International. Although those who fear privatization of the airline argue that it would destroy jobs, Zubair said it’s important to draw lessons from how we actually see privatization play out in the real world. He pointed to the banking industry, which saw a tremendous increase in the number of employees working in banking after the industry was denationalized and privatized during the early 1990s.

“The employees should be looking for the job growth; not just job retention,” Zubair said, as reported in an article from the Nation. “If the organisation is not growing, the employees will naturally not grow.”

Also speaking at the event were Dr. Idrees Khawaja, associate professor at the Pakistan Institute of Development Economics; and Ali Salman, executive director of PRIME. Salman provided several examples of airlines that had been privatized in other countries after a long period of unsuccessful government management, including British Airways, Air Senegal, and Qantas.

“Since many of these airlines are doing quite well, it can be hoped that PIA will do the same; although there will be a phase of trial and error, and we should be ready for that,” Salman said, as quoted by the Nation.