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MarketScreener Homepage  >  Equities  >  The Pakistan Stock Exchange  >  Pakistan International Airlines Corporation Limited    PIAA   PK0003401012

PAKISTAN INTERNATIONAL AIRLINES CORPORAT

(PIAA)
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Pakistan International Airlines : The time for quick fixes at PIA is over

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06/02/2020 | 09:20am EDT

There is much about the crash of Flight PK-8308 that we do not know, including the precise cause of the crash. But there is one thing we do know and can say with certainty because the data backs it up: air crashes and safety incidents happen far more frequently on the state-owned Pakistan International Airlines (PIA) that most other airlines around the world.

Indeed, according to a 2014 study by FiveThirtyEight, a data-focused news website based in the United States, PIA is among the three worst airlines in the world, among those that have more than 1 trillion seat-kilometres. What is particularly damning is that the other two airlines - Russia'sAeroflot and Ethiopian Airlines - have been improving over the past two decades. PIA, on the other hand, is the only one with a bad safety record that has gotten worse.

Whenever tragedy strikes, such as the flight from Lahore to Karachi shortly before Eid, there is a temptation to blame whoever can be blamed. We will seek to avoid that here, but we will say that this tragedy, and especially the track record of PIA that is behind it, suggests that whatever happens next must include a desire to overhaul the airline as a whole rather than quick fixes that might look appealing but will do nothing to solve the structural problems at the airline.

PIA has been descending into the abyss for close to two decades now, if not longer. And the core problem at the airline is one of accountability: nobody has the incentive to do a good job because they know they can never be fired. Two years ago, we ran a cover story about the turnaround efforts at PIA and concluded - in our headline - that the turnaround was unlikely to happen because what PIA needs is not just better management, but a complete decoupling from the public sector employment regulations that have crippled the ability of successive managers to revive the fortunes of the airline.

In our view, the solution will not only require legislation that fully converts PIA into a commercial enterprise rather than a public utility, but also a change in ownership: the government of Pakistan must give up control if the country is to have any chance of fixing this desperately needed piece of infrastructure. Despite the rise of the Gulf airlines, PIA remains Pakistan's strongest aviation connection to the world beyond our borders. We as a country need it operating effectively if we are to avoid tragedies like last week, and move onto the path towards greater prosperity.

© Pakistan Press International, source Asianet-Pakistan

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Financials
Sales 2019 165 B 991 M 991 M
Net income 2019 -55 979 M -337 M -337 M
Net Debt 2019 322 B 1 936 M 1 936 M
P/E ratio 2019 -0,62x
Yield 2019 -
Capitalization 22 146 M 133 M 133 M
EV / Sales 2018 2,48x
EV / Sales 2019 2,17x
Nbr of Employees -
Free-Float 55,0%
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NameTitle
Arshad Mahmood Malik President, CEO & Executive Director
Aslam R. Khan Chairman
Syed Aijaz Mazhar Chief Operating Officer
Khalilullah Shaikh Chief Financial Officer
Amir Ali Chief Technical Officer
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