The federal government will pay Rs. 5 billion for 2,000 employees of Pakistan International Airlines (PIA) who are availing of the Voluntary Separation Scheme (VSS).
The one-time investment will allow PIA to save Rs. 2.5 billion every year as it has been paying the amount to outgoing employees in terms of salaries, allowances, and privileges.
PIA’s Proposed Business Plan
According to the Prime Minister’s Adviser on Institutional Reforms and Austerity, Dr. Ishrat Hussain, PIA’s board had forwarded a strategic business plan to the federal government last year in which it had recommended that PIA’s workforce of up to 14,000 employees be reduced by half.
Dr. Ishrat Hussain said that the Economic Coordination Committee (ECC) had approved Rs. 12 billion for the VSS but only Rs. 5 billion will be used from the allocated amount. He also highlighted that the VSS package had been offered after the approval of the federal government.
“The PIA Board’s plan said that the national carrier has to reduce its employees to 258 per aircraft. It also presented plans to exit from routes that are making losses,” he said.
Previously, PIA’s spokesperson, Abdullah Hafeez Khan, had stated that its aircraft to employees ratio of 1:500 was the highest in the world.
“Currently, PIA has around 500 employees per aircraft. The VSS will help PIA save a large amount of money annually because the airline is paying a hefty sum in salaries and other perks and privileges,” he said.
Who Had Prepared the Business Plan?
PIA’s management had consulted Idris Jala, who had transformed the Malaysian Airlines in 2018.
Jala had recommended conducting route diagnostic labs and enhancing ancillary revenues. Following his directions, the management had enhanced ancillary revenues and had the routes in the loss identified.
These measures had helped PIA increase its revenue and reduce operational costs in 2019.