The PTI government has given the International Air Transport Association (IATA) a $1.2 million contract to develop a business plan for Pakistan International Airlines (PIA) in order to get the national flag carrier out of financial trouble.
According to reliable sources, the national airline submitted a business plan in 2018, but the government rejected it and instead ordered the report to be conducted by foreign consultants. McKinsey and IATA, two foreign firms, applied for the project.
According to reports, IATA’s offer was $1.2 million, while McKinsey’s was $2.4 million for the project to develop a business strategy for the national carrier. The contract was awarded to IATA, the lowest bidder, in March or April 2020. However, owing to Covid-19, which had a major impact on the airline industry, the Pakistani government chose not to conduct the study the previous year.
Dr. Ishrat Hussain, Adviser to the Prime Minister on Institutional Reforms and Austerity, oversaw the entire operation. He recommended that using 2020 as a “base-year” for the business plan was not a good idea. As a result, the PIA management put it on hold, according to the sources. The PM’s advisor presented his report on proposed reforms to the federal cabinet in the first quarter of 2021, and the federal cabinet approved the study by IATA.
A team of IATA consultants arrived in Pakistan last month to conduct the study after receiving approval from the federal government. In 20 weeks, the international consultants will submit their report. According to the sources, this will be a brand new business plan for PIA, which will include a business strategy for the next five years.
Albert Tjoeng, IATA’s Assistant Director Corporate Communications, Asia Pacific, responded that “we do not discuss publicly the projects that we have completed due to client confidentiality.”
Earlier this year, PIA Spokesperson Abdullah Hafeez told this scribe that the PIA board had devised a detailed business strategy to get the airlines out of this quagmire as a result of the national flag carrier’s growing debts and liabilities.