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The flagless national flag carrier

One of the things we expect a PML-N government to be able to do much better than a PPP government is manage corporations. PIA is a high-profile, low-hanging fruit. Its problems are well known, and none comprise any rocket science. Yet almost nine months since the big electoral victory of the PML-N, PIA continues to be a disaster of epic proportions. When your national flag carrier waves the Turkish and the Czech Republic’s flag instead of your own, you’ve got issues, Mr Prime Minister.

Things are so bad that only ‘wet lease’ deals can offer the carriage space PIA requires to continue to be operational, on its most important routes (Islamabad-Karachi for example). No one will ‘dry’ lease planes (planes without crew and staff) to PIA because they don’t trust them to take good care of them, and PIA can’t lease planes without crew and staff because it cannot afford the high insurance premium that insurance companies charge PIA, as a notoriously a high-risk user. This is what happens when you have planes that routinely fail international safety standards, when drunk pilots are arrested at European Union airports, and when crew members are caught smuggling illegal items.

Enter Corendon Airlines of Turkey and Smartwings of the Czech Republic, neither of whom are world beaters of any sort. Today, they fly Pakistani passengers on wet leases for internal Pakistani routes, on the national flag carrier. This is happening because PIA is an untrustworthy borrower of money and planes, and an incapable user of airline industry equipment.

Why blame the prime minister? It is probably unfair to do so, given the wide array of responsibilities he is trying very hard to fulfil. Still, he is the ultimate boss, and this is his country to fix. Let’s review his performance.

As soon as he takes oath, Prime Minister Nawaz Sharif appoints the irresistible Capt Shujaat Azeem as his aviation czar. He then sets up a new aviation division, and assembles a mega-powerful PIA board, with Mian Mansha and Arif Habib on it. He also sets up a former Reckitt Benckiser Pakistan CEO to be the next boss at PIA.

And then the troubles pile on. Azeem turns out to be quite a player in the aviation sector, and conflict of interest is writ all over his work at the Aviation Division. Other members of the board, with interests in the PIA privatisation, also begin to wonder whether this is the most appropriate situation for them to be in. Finance Minister Ishaq Dar is incensed with the quality of a presentation at the ECNEC in which PIA asked reportedly for a whopping Rs24 billion of taxpayer money.

And thus was triggered a series of little disasters that ended up with the resignation of Azeem (we can thank our previous chief justice for that one), the en masse resignation of the board and the relocation of the Sharif government exactly where it began on PIA and Pakistan’s friendly skies: at square one. With no plan, no team, a no clue. This all happened before August 2013.

Then PIA went back into hibernation as a national issue and no one heard from Capt Shujaat again, until January 2014, when once again, miraculously, he was appointed, this time as the special assistant to the prime minister. As a dual national, the previous chief justice had deemed him a flight risk (no matter the incredible irony of the CJ’s own family’s travails and travels). So the PM waited a few months and then simply hired Capt Shujaat back again. This is an interesting model of management.

What is happening here? It is safe to say that this is not the last time this kind of story will develop, evolve and end. PM Sharif is so unfailingly committed to changing things, and in such an urgent rush, that mistakes along the way are almost guaranteed. Here’s a unique way of looking at the PIA fiasco: It happened, is happening, and will keep happening because Nawaz Sharif cares about Pakistan and about PIA more than anyone else has in a long, long time.

The way to avoid another embarrassing cycle is for PM Sharif to take a different approach with PIA. He needs to think like the Maktoums and Nahyans think. This may be anathema for puritanical devotees of the liberal democratic state, but neither the PML-N, nor the Pakistani discourse in general is afflicted with such an instinct.

How did Sheikh Mo build today’s Dubai in less than two decades? And to boot, how’d he do it with less talent, less competence and less resources available to him than are available to PM Sharif? He’s done it by being relentlessly committed to being globally competitive, at all costs.

PIA can soar again and not only be profitable, but be an asset the state values too much to ever consider privatising. It can do all of this if it is managed well, and there is a structure at the top that allows managers to operate without ever having to compromise on quality.

We have gotten so jaded and bogged down in the daily routine of Pakistani 2014, that we’ve forgotten what it is to actually have clear thinking and linear, rational conversations about the realm of possible and the simple, straight-line route to get there.

PIA can be as good as Emirates, Etihad or Qatar Airways (all three of whom are consuming hundreds of millions of dollars worth of Pakistanis’ hard earned money, whilst PIA bleeds). In fact I believe, and we all have to believe, that PIA can be better than them.

To get there, Nawaz Sharif needs to think wildly outside the existing box. He won’t be able to do it if he is surrounded by octogenarians and sycophants, but he has a bold and fearless thinker close at hand – his brother. PIA needs creative battering-ram management, no matter where it comes from.

The PIA example is a test case for Pakistan and for PM Sharif. If Pakistan can fix PIA, it has a shot at fixing a number of other problems, but if Pakistan cannot fix PIA, it has no chance at fixing the bigger problems.

The first thing a reform agenda would do is separate PIA’s governance and management from a government department or division altogether. An Aviation Division is a great idea as the home for the Civil Aviation Authority – but it is madness to place PIA at the mercy of BPS 22 officers in any way shape or form.

Once separated, PIA needs a world-class airline CEO. The next PIA CEO should be the best person in the world for the job. There are likely no Pakistanis – dual nationals or not – that fit the job description. Give the CEO the powers that a normal CEO has, and tie his compensation to achieving specific results in 12 months, 18 months, 24 months and 36 months.

And then leave him alone. One caveat: a CEO needs to have a free hand to hire and fire his or her own people – this means trouble from the unions. But nothing good was ever done without some bad news along the way.

This is not rocket science. But strangely, and disappointingly, it is a radical departure from how we think about change in Pakistan. Pakistanis need to stop feel self-conscious about demanding and expecting basic, linear, logical competence in something as simple as running an airline.

If the PM can deliver a fixed PIA, he has a shot at the other problems. If he allows accountancy driven economic management, and loyalty driven ministerial assignments to continue to autopilot Pakistan, he will not only not be able to fix PIA, he will also fail at any of the larger, more salient national challenges. He’s the boss. Can he do it?

The writer is an analyst and commentator. www.mosharrafzaidi.com

Mosharraf Zaidi, "The flagless national flag carrier," The News. 2014-02-21.
Keywords: Political science , National issues , Political leaders , Economic issues , Political parties , Government-Pakistan , Taxpayers , Democracy , PM Nawaz Sharif , PM Ishaq Dar , Arif Habib , Shujaat Azeem , Karachi , Pakistan , Turkey , PMLN , PPP , PIA