VSS availed by 2,000 PIA employees to cost government Rs 5 billion


Federal government to dole out Rs 5 billion to 2,000 employees of the Pakistan International Airlines (PIA) who opted for the Voluntary Separation Scheme (VSS).

According to the PIA, the scheme will save Rs 2.5 billion annually through savings on salaries and other perks and privileges, resulting in the airline recouping the cost of the scheme within a span of two years.

Adviser to the Prime Minister on Institutional Reforms and Austerity Dr. Ishrat Hussain said that PIA’s Board had sent a strategic business plan to the federal government. As per the business plan, the PIA board had recommended the national airline to reduce the workforce by up to 7,500 employees.

Read more: Govt to offer golden handshake to one-third PIA employees

“The ECC has already approved the Voluntary Separation Scheme (VSS). After the federal government’s approval the VSS was offered to the employees. The board has presented a comprehensive restructuring plan for PIA according to which the national flag carrier has to reduce the number of employees up to 258 per aircraft. Also the board has presented plans for exiting from the routes in loss,” Dr. Ishrat said.

Currently, PIA has around 500 employees per aircraft. The VSS will help PIA save a large amount of money annually because the airline is paying a huge amount in terms of salaries and other perks and privileges to these employees.

PIA spokesperson Abdullah Hafeez said, “Currently, PIA is under almost Rs 480 billion debt and liabilities and this amount is increasing with every passing day. Keeping this humongous liabilities amount in view the board has presented two options in its business plan to the federal government.”

He added, “According to this plan, the board has proposed that the PIA management will ensure the operational profitability of the national airline. Whereas, the second part of the proposed plan is that the federal government should pay off the legacy loan or help in restructuring the balance-sheet because all the debts and liabilities are under a sovereign guarantee. The volume of the national flag carrier’s debt is so high that PIA itself cannot pay off the loan even if it starts earning profit from its operations”, the spokesperson said.

“The average revenue of PIA is around Rs 150 billion out of which an amount of Rs 6 billion is its operational profit. Even if PIA starts paying its loan from its operational profits, it will take another 100 years to pay off its liabilities. This is why the board has proposed the federal government to play its role in paying off the national airlines debts”, said Mr Hafeez.

“The national flag carrier has almost 14,000 employees. According to the business plan proposed by the PIA board, the number of employees was to be reduced to 7,500. Currently, 2,000 PIA employees have applied for the VSS out of which around 1,000 employees have already been sent the letters.”

“Similarly, almost 960 employees were dismissed on disciplinary grounds last year whereas; around 600 employees retire every year after completing their tenures. The PIA now will have around 7,500 to 8,000 regular employees and almost 2,200 daily wagers. The reduction in employment size will help reduce the operational cost of the national airlines,” commented the spokesperson.

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