PIA Sale Hits Snag As Airline Workers Walk Out

Employees of Pakistan International Airlines have walked out in protest over its planned sale, disrupting flights and undermining a central plank of reforms promised by Prime Minister Nawaz Sharif in return for an IMF bailout.

In September 2013, the International Monetary Fund saved Pakistan from a possible default by agreeing to lend it USD$6.7 billion over three years.

In return, Pakistan said it would broaden its tax base, cut electricity subsidies and privatise failing state companies that lose taxpayers around USD$5 billion a year.

Soliciting buyer interest in PIA, whose accumulated losses stand at USD$2.29 billion, by December 31 is one of the major steps Islamabad needs to take for the programme to continue.

But the government is struggling to meet that deadline after a delay of many months in amending a 1956 law that bars PIA from being privately owned. On December 5, the government issued a presidential decree to turn the national flag carrier into a limited company.

PIA workers are demanding that the ordinance be retracted. Political opponents accuse the government of bypassing parliament by opting for a decree over an amendment that would require a vote.

PIA spokesman Daniyal Gilani said airline offices, including reservation booths, remained closed on Tuesday and pilots had joined the strike.

"The employees have a right to strike, but management has requested them not to disrupt flights," he said.

Chairman of the privatisation commission, Mohammad Zubair, told Reuters news agency the government had informed union representatives that advertisements for PIA's sale would be published on December 31 "no matter what".

"Despite some delays, the authorities' privatisation and restructuring programme continues to move forward," IMF's Mission Chief for Pakistan, Harald Finger said.

Once a source of pride for Pakistan, PIA flights are now regularly cancelled and many of its aircraft have been cannibalised to keep others flying.

The government has sought to address fears that its sale would lead to big redundancies.

"No employee of PIA will be laid off during privatisation," Finance Minister Ishaq Dar told reporters last week, a promise economists consider unrealistic given that at least two-thirds of the airline's staff are surplus to requirements, according to the privatisation commission.