An Exclusive Interview with the Managing Director of PIA

Dr Mujahid Ghazi, Pakistan Link’s Bureau Chief in Chicago, recently interviewed Capt. Aijaz Haroon, Managing Director of PIA. Below, a verbatim reproduction of the interview:

Mujahid Ghazi: I am sitting in Westin Lombard with the Managing Director of PIA Capt. Aijaz Haroon and my friend Mr. Rafiq Ismail. Last week Rauf Tabani told me that he is coming to Chicago on the inaugural flight of PIA. This gives me a chance to talk to him about the affairs of PIA. Captain Aijaz Haroon has created ripples in Pakistan’s business. During the last year he was able to turn the clocks and turned PIA into a profitable business. Sir, welcome to Chicago. Yesterday I also came to know that you have flown the plane yourself. Is that right?

Aijaz Haroon: I am a hands-on MD. Basically, I am a pilot. I am still flying and whenever I have to go to meetings or programs across the world I fly the plane myself. By doing so my license remains valid and I save a crew member also. I get a chance to keep my role as a pilot.

As you have mentioned PIA is going through a serious financial crisis and to get it out of it we think whatever little we can do to improve the situation we should do. Sometimes even a drop can make a difference. Yesterday, we came and you saw the community’s great response in the inaugural flight reception. I hope that Insha Allah the flights we resume will be successful and I also hope that in the coming months we will be under such pressure that we would have to increase the number of flights to three or four a week. Whatever frequency people will demand we will try to meet it.

Mujahid Ghazi: PIA was here before and people say that there was a lack of consistency. It came and went away. This has created doubts in people’s mind. What are you doing to regain their trust in PIA?

Aijaz Haroon: See if the people put trust into PIA, it will survive. You use PIA with trust and PIA will prove trustworthy and keep on flying. When PIA operation to Chicago was shut down last time, it was due to commercial reasons. The flight operation was not profitable and the-then management decided that whichever flights are going in loss should be moved to profitable routes. Now we think that PIA being a national carrier, in spite of having commercial considerations, it is our primary responsibility to provide service to the expat Pakistanis living in various corners of the world and should try to keep our standard and service to such a level that people would not go anywhere else. Weaknesses and setbacks are there and like I said yesterday you point them out to us and we will try our best to improve them. Insha Allah we will reach a happy medium. Let me point out that in 2009 - after 4 years - PIA had an operating profit of 2.8 billion rupees. By operating profit we mean the profit we make after all the expenditure on flight operations. The cumulative loan from the banks which include the interest we pay to the banks is 9 billion per annum. This is what is hurting PIA. The impression which has been created that PIA is in loss because of its employees, bad management and bad performance is not true. It is a fact. It is the operational crew who is doing all the work and an operational profit of 2.8 billion is a proof that the employees are giving their best and the management is headed in the right direction. I am not saying that we have achieved 100 % but at least we are moving in the right direction.

Mujahid Ghazi: You have mentioned financial crisis. It has been observed that PIA has an overflow of employees and there are employees who have made it a practice to take leave for 6 months or more and go to the US and other countries and work on PIA’s time. What have you done to stop this practice?

Aijaz Haroon: We have addressed this issue. We have fired those employees who had gone abroad without leave or who had disappeared without notice. When people came to know that we are doing this they stopped. We have introduced a lot of corrective measures. It takes time to improve the situation the airline and country were in, to correct the environment and the system and we have done that. You are absolutely right that people were coming here and doing jobs while still working in PIA, with leave or without leave. Getting two at the price of one. We corrected the situation, further more we have reduced foreign postings by 50 %. Instead we hired locals because we believe in countries where our community is present in large numbers, we don’t need to send people from Pakistan. We have to find people from there. This is the reason that we have made a comprehensive plan to reduce expenditure. If increase in income is not potentiated with reduction in expenditure it is not possible for an organization to be profitable. We are putting lot of effort into this and you will see a visible obvious change in 2010. We pray that an unwanted increase in oil price or any disaster won’t happen to change this projection. Even IATA has predicted that it will take another two years for the aviation industry to come back. We will keep on trying.

Mujahid Ghazi: Now talking about the number of aircraft. What was the number when you took office and how much has it improved now, if any?

Aijaz Haroon: When we came there were 43 aircrafts in the fleet out of which all 8 of our 747s were grounded. They were parked in Sialkot and other places waiting to get scrapped. Out of our seven 737s six were not operational due to technical reasons. We made all of them operational except three 747s which we got scrapped. We have now 40 aircrafts and they are all operational. During the last two years PIA has done Hajj operation with its own carriers. Before, we used to lease planes from other sources for this purpose. Now our new business plan is being submitted on the 17 th in the board meeting. It was submitted before but was not approved. They wanted us to make some changes. Ministry of Finance was not happy with it. It is now being submitted after a revision. It has a proposal for purchase of new aircrafts and expansion of the fleet because this is necessary for the growth of the airline. There is lot of potential and lot of business out there. Only thing needed is better service and a good strategy.

Mujahid Ghazi: It is also said that the maintenance of your planes is substandard. What do you have to say?

Aijaz Haroon: You are absolutely right. This has happened. The biggest setback PIA had in the last decade was the ban on its flights by the European Union. Besides grounding of the planes this had damaged the reputation of the PIA. When an airline is told that your planes are not safe or they are technically insecure, it loses the trust of the passengers. Passengers get confused. When we came, we did appropriate repair and maintenance of the planes. Got them cleared from the European Union and now even our Jumbo Jets are flying. We got clearance of three jumbos. Although we are not supposed to fly them to Europe but to regain the trust of our passengers we have flown them to Europe so that people would see that they meet all safety standards. What happened to us is happening to Philippines Airlines and they are asking how we got out of the situation. We are providing them help to get out of this situation and start their flights again to Europe.

Mujahid Ghazi: Now some discussion about your personal life. I know your family. I have lived and went to school in the same neighborhood. People in your family are predominantly business people. They are industrialists. How did it happen that a child from that environment first becomes a captain and with continuous effort and dedication becomes the MD of PIA? How did this happen?

Aijaz Haroon: First it was my passion from the very beginning. Like you I came to the US to do Mechanical Engineering from Tristate University. During my education there I joined the local flying club to learn flying. From there, during summer, I went to Spartan Aeronautics in Oklahoma. From there I first got the private flying license and then a commercial pilot license. Soon after I got that license, PIA advertised for commercial pilot vacancy. My brother sent me the newspaper clipping. I applied and got a call. I went to Pakistan telling my friends that I will return after giving the interview but then I never returned. I joined PIA in 1977 and from then on I stayed with PIA. Later, I got few chances in the management. It was my parents’ prayers and people’s encouragement that I got all this.

Mujahid Ghazi: Don’t you get tired of flying?

Aijaz Haroon: Flying planes gives me relaxation from the pressures and tensions in this job. Every moment there is something happening. There are different time zones in different parts of the world. When it is day here, it is night in Pakistan. People here call me during their working hours while I am sleeping at night. I have to entertain them. The concept of time stops existing in my line of work. It is interesting and challenging and it was itself a big challenge to take charge of an organization which was in financial and managerial crisis. I have a very good team to meet this challenge. Though it has taken little time to get this kind of team together and make it functional.

Mujahid Ghazi: it has been observed that when a person like you takes this important responsibility, it hurts the interests of some people who otherwise were getting undue benefits out of the organization. Are you getting some opposition from such elements?

Aijaz Haroon: Yes, I am facing it now. Some people are up to it but we are only looking ahead. When I came I said that I am not going to talk about the past. What my predecessors have done. If we get into it then we won’t be able to achieve anything. We had a set target and that was to give PIA its pride and glory back. I think during the last two years we were successful in attaining that. I think we had given a very clear signal and people do feel that we are on the right track. We have pointed out the problems of the institution and we have told the government also. People do say that PIA is in great loss. They also are under the impression that the government gives a lot of money to the PIA. During the last two years we have not taken a penny in the form of grant or help.

Mujahid Ghazi: From the Government?

Aijaz Haroon: Not a single penny. Yes we have been getting loans from banks. Once there was this situation when we were short of cash flow. We do have our losses. I already told you that we have to pay 9 billion rupees to the banks every year. PIA had not seen such a large operating profit before.

Mujahid Ghazi: So when are we going to get out of this 9 billion payment?

Aijaz Haroon: See it could not be done by an organization itself. No organization has this capability of sustaining itself when 1/10 th of its income is consumed to pay off the interest on the loan. Look at this in the perspective that when a business is in loss, there are two, three steps which are taken to overcome it. In the Western world if this happens to an organization either it files bankruptcy or takes the help of chapter eleven and they do an agreement with the bank that we can pay this much. They finally get out by paying 25 to 30%. PIA can’t do this because it has bank guarantee covering the loans. The other option is liquidation but because the government is also a party to it, it couldn’t be done. The loss has occurred. Government has an equity in PIA. We have a paid capital of 20 billion. This year we will cross 100 billion.

Mujahid Ghazi: It is still not clear if PIA can get out of the debt or not.

Aijaz Haroon: It is not impossible. I told you that we are submitting the business plan on the 17 th of this month. It contains the solution to this situation. Please also note that the loan on PIA is to the tune of 1 billion dollars or about 70billion rupees. It couldn’t happen overnight but you will see that it will soon start decreasing. We have two kinds of loans on us. One of the planes and the other of paying the losses. Paying the loans on aircrafts is not difficult. That’s why we are asking the government not to stop us from buying new aircrafts. The aircraft makes its own money and pays. Because of fear if you don’t buy new aircrafts it is going to add up to your losses. There are airlines which are operating out of the Middle East. Every Sheikh has his own airline. We are giving them all the business. For every product produced in the country, government provides security by using taxes and tariffs. My product is my seat. Nothing is being done to protect it. You have made Pakistan an open sky. Naas Sharif came to inaugurate Karachi airport and with royal generosity declared Pakistan as open sky. Whoever wants to come can come. Tomorrow if someone announces that import of fertilizer, tires and cars is allowed, it will destroy these industries.

Mujahid Ghazi: You mean there shouldn’t be any competition?

Aijaz Haroon: No, I am not saying that there should be no compitition. But it should be with proper control. Every country design rules and tariff to restrict import. Where do you see open sky in the world? It is only in city states or it is in the US because of the distance and its vastness. But you see the effects here too. Big airlines are disappearing. There are mergers. There is no open sky policy in England, Germany, Spain and Denmark.

Mujahid Ghazi: Do you suffer losses because of the domestic private airlines as well?

Aijaz Haroon: We don’t oppose Pakistani private airlines. All we ask is parity in facilities provided to them and us. But you see how many airlines were started and disappeared. This is because they have to compete with airlines that have no shortage of investment. Who have no restriction on their expenses. It is their hobby. They are competing with each other. This Sheikh with that Sheikh. That Sheikh with this Sheikh. Before they had petty hobbies of cars and horses. Now they have big hobbies of planes. We don’t have that kind of money. We have to learn from our neighbor. The people there have an exemplary spirit of nationalism. Their clothes, their cars. They know that this is what will make their country progress. Now you see they are standing up as one of the world powers.

Mujahid Ghazi: So you think that Pakistanis have less nationalism than Indians?

Aijaz Haroon: Definitely it is less because we feel proud to brag that we had flown such and such foreign airline, I have this foreign thing or that foreign thing. Our nationalism only wakes up in the time of national crisis or disaster. During the earthquake the whole nation stood up. PIA also played its role. The world was surprised on seeing that spirit. What I am saying is that the PIA is not some one’s private property. This is your national flag carrier and only you can take it out of this crisis. Help it. We have to take it as a national challenge. Every person has to play his role for Pakistan, its industries and PIA’s existence.

Mujahid Ghazi: Many foreigners are scared to travel to Pakistan because of the law and order situation. Even many Pakistani Americans are also afraid. What are you doing to tackle this situation?

Aijaz Haroon: We have recently introduced a scheme. For only $ 10 on top of the return fare we are giving Life Policy to our clients. If anything happens to them during their stay in Pakistan, we will pay Rs. 10 million. Whoever is with you in your happiness and sorrow is your friend. PIA as you know takes the body of any deceased to Pakistan free. Other airlines that are operating here don’t provide this service.

Mujahid Ghazi: Do you still have family discount scheme?

Aijaz Haroon: It is still there, off and on. Let me tell you about another scheme. The Government of Pakistan is introducing a Pakistan Remittance Initiative scheme under which PIA will give free air miles to people who use banks to remit their money to Pakistan. If someone is sending $ 700, in a year and half he will accumulate enough free air miles to get him a free return ticket to Pakistan. It will have dual benefit. The person will get a free ticket and Pakistan will earn foreign exchange. Then we are going one step ahead: we will deliver that money on their doorstep through Speedex.

Mujahid Ghazi: Money will be sent through you or through the banks?

Aijaz Haroon: Through bank. When you will send money, you will be given a Sons of Pakistan card which will have your earned air miles written on it. Return ticket or excess baggage, whatever you choose, you will get it. You will also get extra benefits at the airport because of this card.

Mujahid Ghazi: What if anyone wants to contact you?

Aijaz Haroon: Very easy. Just go on PIA’s website and send me an email. I read all my mails.

 

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