AZA AHMED= 13E00143

Introduction:
The case explains the ups and downs of PIA. The airline in its current state is run by Government
solely and lacks performance based benefits to employees which is lowering down their morale.
The new MD Junaid haroon needs to decide upon whether to privatize the airline or let it run in
hands of politicians and employee unions.

Quantitative Facts:
-

In 2008, PIA faced huge losses of Rs36 billion.

International market share is 31%.
Domestic market share is 76%.
MD kirmani recorded 13% growth in revenues from cargo and passenger business

amounting Rs.3.5 Billion.

Share price 2.14.

Qualitative Facts:
-

Tenure of MD Kirmani which lasted from 2005 to 2008, was the most profitable period.
PIA provides support to military during the war.
Strong position of employees and company unions.
Government decides to privatize PIA.

ISSUES:
-

Continuous change in policies.

Blame game among employees is high.
Government intervention is high.
Huge amount of loan.
Crash in Multan seized Fokker planes.

Core Issue:
CORRUPTION AND POLITICAL INFLUENCE.

Justification:
CONTINUOUS RESIGNATION OF MDS DURING DIFFERENT POLITICAL
REGIMES LEAD TO MISMANAGEMENT AND PIA IS WORKING ON FUNDING BY
BITTY SUPPORT ON DAY TO DAY BASIS BY THE GOVERNMENT.
Recommendations:
Privatizing the management department only can bring positive changes. This department will be
politics free. Performance based management system will be introduced. PIA should not be
privatized. Because firstly, the airline is for Pakistans people and represents people of Pakistan
worldwide. Its the carrier of Pakistans name. Secondly, PIA helps army for defensive purposes
for this reason privatizing might not be a good option. Profitable routes should be chosen and
cost increasing networks should be redesigned. In times of high fuel prices hub and spoke
method should be implemented.
Exhiit :
The exhibit shows that Pakistan is in a good position as far as domestic market share is
concerned.