PIA has been struggling financially and losing market share over decades due to mismanagement and political interference. It has accumulated debts of Rs300 billion and annual losses of Rs20-30 billion. Six major factors contributing to its decline are an aging fleet, inefficient routes, high costs, poor management, unqualified hiring, and overstaffing. As a change management consultant, resistance from unions with political ties and overstaffing would be challenges to address. Solutions include reducing political influence over unions, rightsizing staff based on aircraft needs, and appointing experienced aviation professionals through independent audits and international HR firms.

1. Executive Summary:
Situational Analysis, root cause of the problem
Over the past few decades, PIA's performance has consistently been deteriorating and it is no longer the
airline of choice for passengers in Pakistan. This marked decline in PIA's performance has attracted
significant media attention along with vocal criticism from the public about the airline's miserable state of
affairs. And the social media is flooded with such Feedbacks, Comments, Posts and Videos.
Many efforts to “revive” PIA's pastglory have not materialized and PIA has become a public sector distortion
flawed by investment, corruption and inefficiency. In terms of who is to blame, various stakeholders are
quick to point fingers.
Reasons that has contributed to PIA's downward spiral are:
 The national carrier cites policies that increased competitiveness
 Unavoidable governments assign blame to the political interventions of their ancestors
 Economists insist that the free market economy is merely taking its natural course, where the weakest
competitors are eliminated and only the fittest survive
The government’s proposal to off-load 26 per cent share in PIA and enter into a “strategic partnership” with
a competent private stakeholder has predictably been received with enormous hue and cry. This was
expected from the clumsy management that PIA has become over the years. Workers union came out
charging and mainstream opposition parties too jumped into the fray. But the numbers don’t lie, as things
stand today, PIA has an accumulated debt of Rs300 billion and incurs yearly losses of Rs20 to Rs30 billion,
which the government has to pay to keep it alive. The PML-N government is tired of nursing the problem
child and is all set to handover it to able hands.
Six major factors are identified to contributing to this reduction in losses:
i. Fleet modernization
ii. Route rationalization, and
iii. Cost cutting
iv. Poor management and political interference
v. Hiring unqualified and ill-equipped individuals for technical and professional jobs,
vi. Overstaffing
Q-As Change Management Consultant, how would you pro-act and react to manage this Change?
As the change Management consultant my biggest challenge would be the resistance which is very evident
in any change process. In my case it would be different because individuals I will be dealing with the below
mentioned:
Situation# 1: Unions were always patronized by political parties, who infused the culture of inefficiency in
the organization. They have association with PIA comprising on years and top of the that the unions and
leaders who are being trusted more than the govt. or anyone else.

2. Solution: They can be handled if managed properly. A commercial organization that is public or private
shall not have unions whose objectives are based on national or any sort of non-professional politics.
If any union under CBA laws has to be there it must be a hardcore worker union based on management
objectives. In this regard the parliament has to make legislation to amend CBA laws whereby they have
to create an authority whose work would be monitoring involvement of national politics in commercial
unions. These leaders cannot be handled without proper action by authorities.
Situation#2: 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.
Solution: Some radical decisions have to be taken, including shredding people hired on political basis and
bringing efficient workers at the forefront. PIA being an airline whose appointments is majorly politically
motivated need to resize her headcount as per the requirement of specific aircraft & length of operations.
In the same way everything that is associated with the airline has key factor standard ratios that in any
case have to be followed.
Situation#3: The losses became more prominent after Pakistan opened its skies to foreign airlines,
especially from the Gulf region to do business in the country. Airlines such as Emirates and Gulf Air gobbled
up PIA’s market share and its revenues began to fall. In other words, Pakistan’s national carrier, despite
boundless opportunities and empty playing field until the early 2000s, was not efficiently being managed.
When faced with competition, it began to crumble.
Solution: PIA needs a stakeholder who has money to put in and manage it like one’s own. If something
is a security issue, then profit and loss is always secondary. This industry has to be seen as a regular part
of economy & it requires running under the authority that has commercial aviation professionals rather
Situation# 4: Lack of accountability.
Solution: Management Audits must be a regulatory requirement for operations and organization: Other
than financial audit, being a national airline & big commercial entity PIA requires a yearly Management
Audit by an independent global aviation industry auditor. The recommendations of the auditor have to be
a part of strategy framework for next year or years. In is also advisable in the country like Pakistan that
appointment of CEO and other senior management & operational staff has to be done through an
international HR firm that has a key experience in aviation hiring. It has to be at least till we shall have a
professional body in the country that do all of it over their own shoulder.