Pakistan International Airlines (PIA)’s ongoing refusal to recognize its internal deficiencies highlights the dire need to offload the national flag carrier to negate its ever-mounting burden on taxpayers.
A report submitted to the National Assembly Standing Committee on Privatization has blamed the Open Sky Policy adopted in 1992 for the PIA’s downfall, citing increased competition as a key driver of economic losses. According to the report, the airline’s market share has plummeted from 50% to 20% due to the policy. The report essentially disregards free market principles, which rely on competition to boost standards, encourage innovation, and facilitate superior services for consumers.
The fact that PIA was unable to maintain its foothold in a competitive environment underscores systemic issues within the organization, rather than granting it a convenient excuse to negate its losses. Since the 1990s, the national flag carrier has suffered frequent management upheavals, often involving the appointment of inexperienced individuals. Such appointments have led to inconsistent policies and a lack of strategic direction. Additionally, overstaffing has inflated operational costs, with PIA maintaining a higher staff-to-aircraft ratio than most international airlines.
Instead of using the increased competition as a catalyst for improvement, PIA has relied on government subsidies to offset its mounting losses. Since 2011, the airline has been unprofitable, requiring continuous financial support from the state. By the end of 2016, it had $3 billion in debt; in 2023 alone, the airline reported an operational loss of Rs. 75 billion. Despite this troubling reliance on taxpayer money to sustain itself, PIA has shown little progress in rectifying its operational inefficiencies.
The prevailing situation underscores the dire need to privatize PIA—though a failed first round has made clear achieving this is easier said than done, especially if any investor is not permitted to make sweeping changes necessary to achieve profitability.
Continuing to pour public funds into a failing enterprise is neither sustainable nor justifiable. Privatization can help the PIA restructure, implement efficient management practices, and reduce the financial burden on taxpayers.
PIA was once a mark of pride for Pakistanis globally. Years of neglect have left it a blot on national resources. Only through privatization and a renewed focus on efficiency can Pakistanis once more see their flag soaring the skies as a national privilege rather than a drain on their dwindling resources.