Pakistan International Airlines (PIA) has offered a Voluntary Separation Scheme (VSS) to its employees in a bid to cut down its expenses and bridge the annual deficit.
It was revealed by the Chief Executive Officer (CEO) PIA, Air Marshal Arshad Malik, during a meeting of the Senate’s Standing Committee on Aviation.
Malik said that no airline in the world having 14,500 employees with a deficit of Rs. 400 billion and liabilities of over Rs. 100 billion can become self-sustainable.
He added that around 3,200 PIA employees will avail the VSS for an estimated Rs. 12.87 billion, whereas, the national flag carrier will save Rs. 4.2 billion on its annual wage bill.
Malik apprised the Aviation Committee that overstaffing is the primary reason behind PIA’s colossal losses.
PIA’s aircraft-to-employee ratio in comparison to other acclaimed international airlines is absurd, Malik told.
Turkish Airlines has 329 aircraft in its fleet and 31,000 employees. Its aircraft-to-employee ratio is 94. While Qatar Airways has 240 aircraft in its fleet and 32,000 employees. Its aircraft-to-employee ratio is 133. Etihad Airways has 102 aircraft in its fleet and 21,530 employees. Its aircraft-to-employee ratio is 211. Emirates has 269 aircraft in its fleet and 62,000 employees with an aircraft-to-employee ratio of 231.
PIA, on the other hand, has 29 aircraft in its fleet and 14,500 employees. Its aircraft-to-employee ratio stands at 500.
A VSS scheme provides employees of any organization a chance to resign voluntarily by receiving substantial compensation against each year of service.
The scheme is normally implemented to reduce the headcount of employees to cut down the organization’s overhead costs. Most organizations opt for a VSS instead of retrenching or laying off to reduce the headcounts to avoid a bad reputation in the industry.