PIA could save Rs 18.65 billion annually: PALPA

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Pakistan Airline Pilots' Association (PALPA) has claimed that implementation of its well researched "fly smart" programme, submitted to PIA management, could result in a saving of Rs 18.65 billion annually. Captain Suhail Baluch, President, PALPA and First Officer, Chakar Ali Shah had spent long hours in preparing the programme which claims that if PIA saves one percent of flying time annually, the accumulative savings will be approximately Rs 1.5 billion.

PALPA President was confident that implementation of "fly smart" programme with immediate effect through cost cutting committee would result in a saving of Rs 18.65 billion annually. And to achieve that magic figure, motivation of employees, passenger friendly attitude, fleet revival, and review and renegotiations of contracts and agreements would be necessary, he said. He emphasised that considering PIA's current liabilities and financial health following points should be considered:

--- PIA acquired wide body/long range B-777 aircraft. With a grant of US $150 million by Government of Pakistan and a total of US $1.6 billion investment, completely revamp the brand image in the market place. However, due to the fact that real earnings of PIA per aircraft have gone down and since the profit and loss statement is made in Pak rupees, an unnecessary burden is shown in the financing cost due rupee devaluation.

--- PIA fleet renewal plan should be staggered in two phases, ie in phase one, to maintain schedule integrity and punctuality as per industry practice and similar type of aircraft with similar engines should be inducted which will result not only in substantial savings in recurring maintenance cost but will also save on the crew conversion cost. In phase two, after consolidation and maintaining at least a break even level, the airline can embark on a fleet modernisation/expansion plan for the medium term period.

---- It is highly recommended that the present obsolete fleet of B-737-300 aircraft, of which only two are operational, PIA should dispose off these aircraft along with all surplus inventory to generate cash and acquire B-737-400 aircraft on dry lease basis.

---- Likewise, at present out of a fleet of 12 A310-300 only eight aircraft are operational. In order to maintain a sustainable schedule for improved productivity denominator, ie ATK's. PIA needs a minimum of 25 operating aircraft other than the turbo props. Four earlier vintage A310-300/A300-600 aircraft with GE engines should be acquired on dry lease basis. This will enable the airline to stop operating B777/B747-300 fleet on short to medium range routes.

---- Public Procurement Regulatory Authority (PPRA) rules and regulations are being wrongly understood and interpreted; therefore PIA is focused on A320s to avoid further delays as the airline is in dire need of narrow body aircraft.

---- It is suggested that services of a senior consultant of PPRA may be hired who can assist and guide PIA in acquiring B-737-400, in shortest possible time.

PALPA has also suggested that PIA needs to review/evaluate and then re-negotiate following agreements, in favour of national flag carrier: Sabre agreement, insurance agreement, loan/financial cost agreement, B-777 purchase agreement, utilities charges, welfare canteen and medical charges, fuel purchase agreement within Pakistan and abroad, technical handling agreement, lease/rental policy for equipment, interline agreement, tickets sales agreement, cargo handling agreement, courier service agreement, clearing forwarding agreement, and engine PW 4127 overhaul agreement.



Courtesy: B R


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