Tabassum Pardesi, a former Director at Pakistan International Airlines (PIA), has stepped forward with a detailed offer of pro bono support for the government’s efforts to privatize and turn around the national carrier. Pardesi, who resigned from her director-level position in just 100 days due to concerns about the airline’s direction and challenges within higher management, has presented a structured strategy to help overcome the complexities surrounding PIA’s privatization.
Her proposal, addressed to Pakistan’s Minister for Privatization, Mr. Aleem Khan, emphasizes utilizing internal resources and innovative financial restructuring as a foundation for sustainable reform. The expert, who previously had prior meetings where concerns were raised regarding the feasibility of attracting credible international bidders under PIA’s current conditions. In a separate conversation with interim minister Mr. Fawad Hasan Fawad, the expert indicated that, based on insights from global aviation circles, it was unlikely that substantial international interest would materialize unless core issues within PIA were resolved.
Her strategy centers on two key phases and prioritizes the input and skills of PIA’s often-overlooked lower and middle management, whom she describes as resilient, skilled, and dedicated individuals who are familiar with PIA’s operational realities yet limited in influence by the current higher management. Below are some highlights from Pardesi’s proposed solutions:
- Empowering Internal Talent for a Turnaround Task Team:
She suggests that the task team dedicated to PIA’s turnaround should be formed from PIA’s own internal lower and middle management. These employees, she notes, possess both the resilience and firsthand operational knowledge necessary to address PIA’s inefficiencies. Due to insecurity among higher management, these individuals have often been sidelined despite their dedication and expertise. By empowering this group, She believes PIA can unlock innovative, grounded solutions that align with the organization’s day-to-day operational demands and potential.
2. Fleet Renewal through a Special Purpose Vehicle (SPV):
She proposes a phased approach to PIA’s privatization, starting with an innovative fleet restructuring plan. In Phase 1, she suggests forming a National Consortium to acquire all of the current aircraft inventory and transferring these assets into a Special Purpose Vehicle (SPV). This would enable PIA to offload the aging fleet and reduce its debt burden, while the SPV, backed by the consortium, would oversee fleet renewal and new aircraft induction. The refreshed fleet, operated under the SPV, would increase efficiency, lower operational costs, and improve service quality.
3. Equity Swap to Complete the Privatization in Phase 2:
In Phase 2, Pardesi proposes an equity swap where the SPV’s shares would be exchanged for equity shares in PIA. This would effectively transition ownership from public to private hands while ensuring that PIA’s assets and operational control remain within a National Consortium’s oversight. This phased model allows PIA to enhance its operational capabilities through new, privately managed assets while keeping the national interests intact through the consortium.
4. Fostering Transparency and Attracting Credible Investors:
Her proposal underscores the importance of a transparent, phased privatization process to build investor confidence. By involving a consortium of national stakeholders in the initial phase, this approach could create a pathway for attracting reputable international investors in later stages, once the airline’s finances are stabilized and its operational assets are modernized.
5. Reducing Financial Burden on the Government:
Her plan relieves the government of the immediate financial burden of fleet renewal by shifting it to the SPV, thus allowing private sector investment to drive modernization. This approach could streamline the privatization process and position PIA for a sustainable recovery without requiring continuous public funding.
This phased, internally-driven strategy offers a unique blend of structural and financial reform aimed at maximizing PIA’s long-term viability while safeguarding national interests. Her approach to mobilizing PIA’s skilled lower and middle management, combined with pragmatic SPV-led fleet renewal, could prove transformative in addressing the core issues facing PIA.
As the Ministry of Privatization evaluates its options, Tabassum Pardesi’s solutions provide a roadmap that leverages both internal strengths and external capital—a holistic strategy to help ensure PIA’s successful transition and sustainable future.
