PIA Revival Plan - 'PIA Two' to be Formed on Temporary Basis

[smhusain_1]

Imiakhtar & H. Khan
The FAA has made a distinction of military pilots and pilots joining from approved institutions and will be treating them differently, not necessarily by the guidelines of 1500 hours total time for a position on the right seat of a 121 and other such category carriers. The FAA new experience requirement is no knee jerk. It has weathered a lot of interests, and is retained. The ATPL requirement to sit on the right seat remains.

When an airline doesn't have its own facilities up to the mark for training, then they normally hire the services of a reputed institution where its pilots get training or are type rated on a new aircraft. In PIA this had been initially ongoing for the DC 10, 747, A 300, B 737, A 310 till they were able to improve themselves and get simulators at Karachi. Our crew for the DC 10 and 747 was trained by United Airlines and for the B777, probably by the company (?).

As a Fokker F-27 copilot with PIA and having started flying that aircraft in Sept 1969, Capt Shaukat Hussain Khan, VP Flight Operations PIA brought our category co-pilots on to the B707/720B as would be First Officers for a transition course in Oct 1971. I did the ground school technical and started observation flights before the formal simulator and type training. The 1971 war intervened in November and we were taken off. In fact on Nov 16, 1971, I flew a 6 hour observation flight to Dacca (Dhaka), circling around Sri-Lanka. On the Bay of Bengal side of India there was also a discussion about Indian Hunters catching up with us and someone remarked that they wouldn't be effective at the altitude we were. My total time as F-27 copilot at that time was 1040 hours. Prior to this Capt Shaukat had already experimented earlier with Capt Teherani, Zuberi and his seniority colleagues as First Officers on B707/720B. They wore 2 ½ stripes at the time on the B707/720 and F-27 copilot wore 2 stripes.

In Nov 1973, while Capt Shaukat was Director Flight Operations again (former VP Flight Operations), we were brought on the B707/720B for transition course. My experience was 1400 hours on F-27. There was a lot of opposition to this proposition among the pilots but we completed everything and started flying as First Officer B707/720B. Remember the training in those days was more aircraft oriented in fact the 707 simulator (3D) had been incorporated for less than six months. Prior to this there was a static 720B systems device. In this you could take off and check your track on the recorder, but there was no motion.

The Asiana instructor pilot had recently completed the requirement to hold that position, right seat instruction. In fact this was his first instructional flight. The pilot under check had very little time on the equipment and was going to be type rated.

"There are two philosophies when automation is not doing what you believe it should be doing. One is to go to the next-lower level of automation, which requires analysis and proper action while the problem is ongoing. The other is to simply turn off automation get back to basics and fly the airplane, hands on the yoke and throttles. The main purpose of an NTSB accident investigation is to prevent recurrences. The critical issue is to determine what human factor problem caused this crew to ignore the most basic aeronautical rule--'Fly the airplane-Capt Jean Claude Demirdjian. AWST July 21, 2014.'

In the Colgan crash, it was not the experience which brought down that airplane but the fact that stalling as a subject was not discussed, practiced, part of the syllabus in the training imparted as a cost saving measure. If a PIA captain is hired by another carrier in that position as a direct entry, then remember, he is qualified to hold that.

[Abbas Ali]

PIA bidding: Financial advisers to get Rs456.8 million in fee

By Shahbaz Rana

Published: August 1, 2014

ISLAMABAD: A consortium led by Dubai Islamic Bank will receive a fee of Rs456.8 million in addition to 1.5% of the sale proceeds for conducting successful privatisation of Pakistan International Airlines (PIA) – a price which is the lowest among all bidders.

In an effort to justify the selection of the DIB consortium, the Privatisation Commission (PC) released technical and financial details of the three pre-qualified consortiums. The details showed that the DIB consortium got the maximum score in technical evaluation and quoted the lowest price.

The consortium that emerged victorious comprises DIB, IATA Consulting – which has expertise in aviation business, audit firm Deloitte, local legal firm Haidermota BNR, international legal firm Freshfields Bruckhaus Deringer, human resource expert Abacus Consulting, local communication strategy firm APCO and Prestige – an international communication strategy firm.

An official of the Ministry of Finance and Privatisation, who is directly dealing with the transaction, said the PC had nothing to hide and every step of the process could be scrutinised by anyone.

There has been criticism in the media that the PC board picked a consortium that was not technically sound to handle one of the most complex privatisation transactions.

The deadline to sell a minimum 26% government stake in the national flag carrier is June next year.

The original deadline, as agreed with the International Monetary Fund (IMF), was June this year.

Under the $6.7 billion IMF loan programme, Pakistan has agreed to sell 26% shares in PIA to strategic investors. Two hotels, Roosevelt New York and Scribe in Paris owned by PIA, will be sold separately.
According to the PC, it had invited expressions of interest (EOI) only from the interested parties having demonstrable track record of successfully managing similar transactions in the past. It gave advertisements to hire a financial adviser that would help the government restructure the bleeding entity and sell its core operations to a private sector party.

In response to the advertisements, five consortiums applied, of which three were declared successful by a seven-member evaluation committee. The consortiums led by Mckinsey and Rothschild could not be eligible to bid for becoming the adviser.

According to the PC, DIB-led consortium got a score of 87 at the technical evaluation stage – the highest among the three. Ernst & Young-led consortium got 83 marks followed by Jefferies that obtained 70 marks.

Financial bids of these parties were opened on July 18. According to the PC, the DIB consortium quoted the lowest bid price at Rs456.77 million. The government will pay this amount on account of retainer fee and out-of-pocket expenses. In addition, the consortium sought 1.5% of sale proceeds as success fee.

The Ernst & Young-led consortium sought Rs547.69 million as retainer fee and out-of-pocket expenses. Besides, it quoted 3.5% of sale proceeds as success fee, said the PC.
The third party, Jefferies, sought Rs1.373 billion as retainer fee besides 1.5% of sale proceeds as success fee.

On the basis of the technical and financial evaluation, the PC board gave 100 marks to the DIB consortium, 90 to Ernst & Young and 73 to Jefferies, declaring DIB as the successful bidder.
The Pakistan Peoples Party has accused the government of planning to sack half of the PIA workforce before its privatisation. “The government will not lay off a single employee before privatisation,” remarked PC Chairman Mohammad Zubair.

There was criticism that Deloitte – a legal firm in the DIB consortium – remained an auditor of PIA, thus there was a conflict of interest. But the PC was of the view that Deloitte was the external auditor until December 2013 and was eligible to become a member of the consortium. Current external auditors of PIA are KPMG and PWC.

Source: tribune.com.pk

[CaptShahid621]

NEW DELHI: Pakistan plans to split ailing national flag carrier PIA into two companies and sell control of the core business to a global airline over the next 18 months, but political opposition to the sell-off will be intense, the country's privatisation czar said.

Financial advisers are now in talks with several airlines about taking over cash-strapped Pakistan International Airlines , which has some 17,000 employees but just 36 aircraft - and 10 of them are grounded due to a lack of spare parts.

Mohammad Zubair told Reuters in an interview during a visit to New Delhi on Wednesday that no decision had been taken on the buyer, but he mentioned Emirates Airline, Etihad and Qatar Airways - the Gulf giants that dominate the regional sector - as possibilities.

“It's going to be the most difficult sale,” said Zubair, who is aiming to raise around $4 billion this fiscal year from the sale of stakes in several companies, anticipating demands that the government hold onto PIA and nurse it back to health itself.

“If we are saying that for 25 years PIA has been going from bad to worse, we can't claim that we are business-savvy and we can turn it around,” he said. “Anyone who thinks that the government can fund it is living in a fool's paradise.”

Zubair, a former IBM chief financial officer for the Middle East and Africa, was tapped by Prime Minister Nawaz Sharif to take charge of a central plank of economic reforms promised by Islamabad in return for a International Monetary Fund bailout.

Pakistan announced this week it will seek to raise about $815 million through a sale of shares in Oil & Gas Development Co (OGDC), its largest offering in eight years.

Zubair said investors are returning to Pakistan after weeks of anti-government protests in Islamabad that have now fizzled out, and the OGDC deal representing 7.5 percent of the company's share capital would be a test of their confidence.

The OGDC sale is part of a sell-off drive to raise capital for an economy that has been crippled for years by power shortages, corruption and militant violence, and to staunch huge losses from dysfunctional companies. Zubair said the losses of power distribution companies alone are equivalent to one-sixth of the government's fiscal revenues.

Next on the block will be the government's 40 percent stake in Habib Bank Ltd, which will be sold in two stages between November and next March, for around $1.2 billion.

Also ahead is the sale, targeted at domestic investors, of the state's 7.5 percent stake in Allied Bank Ltd, for around $150 million, Zubair said.

'Perhaps I'll Arrive'
Once a source of pride for the country, PIA's decay has made it the butt of jokes, one of which goes that its initials actually stand for 'Perhaps I'll Arrive'.

Flights are regularly cancelled and engineers say they have to cannibalise some planes to keep others flying.

Related: PIA airhostess held with drugs

Last year a PIA pilot was jailed in the United Kingdom for being three times over the alcohol limit before he was due to fly. Pakistani media reported that another pilot delayed a New York-bound flight for more than two hours as he waited for a sandwich delivery.

Over the years, critics say, governments have manipulated state corporations like PIA for political and financial gain, giving jobs to so many supporters that the size of the workforce has become unsustainable in the face of mounting losses.

Zubair said that PIA's employee-to-aircraft ratio, at around 600, is one of the worst in the world and keeps going up as more planes are grounded.

Under his plan, the airline will be spun off as a separate entity and PIA's other interests - such as ground-handling, catering, hotels and even a poultry business - would go into a holding company that would be retained by the state.

To avoid mass layoffs that would run into political opposition the holding company would absorb all the employees, keep a share in the airline to earn dividend income and then sell off each of its interests individually over time.

Zubair said he could not proceed with the sale of PIA as quickly as other companies, partly because parliament may have to approve legislation allowing it to pass into private hands.

“It's more politically sensitive,” he said. “PIA is not going to be sold just like that.”

source: http://www.dawn.com/news/1134271/

[Abbas Ali]

Matters related to PIA strategic partner/investor and method of selecting strategic partner/investor for the airline in transparent manner were discussed in a meeting chaired by finance minister held in Islamabad today, according to PTV News.

In a commitment made with International Monetary Fund (IMF), Government of Pakistan revealed plan to sell 26% shares in PIA to airline's strategic partner/investor. The selected strategic partner/investor will also gain management control of the airline, according to some news reports.

Abbas

[Abbas Ali]

Prime Minister Nawaz Sharif in a ceremony held in Islamabad today said that handing over PIA management to strategic investor who buys 26% of airline's shares is the only way for turning around the airline.

Abbas

[Amaad Lone]

Why sell 26%, sell the entire 100 percent. In the last ten years the government has pumped in $2 billion dollars to keep 19000 jobs afloat.

Its not the government job to run airlines.

Privatize the airline and let the new owners plan future fleet replacements.

[rayyanullah]

Curious to learn how the magical figure of 26% was arrived at. There must be some background to this.

[Squawk_1200]

Curious to learn how the magical figure of 26% was arrived at. There must be some background to this.

Me as illiterate and a villager I only think of this as a milk giving cow , living cow will be divided in two. Pakistani tax payers will get the mouth and teeth in the form of PIA number doo and the milk skim part will go the investors. For them 26% will be enough.

Wait and see it will not be 26% , when deal is done it will be 50 or 70% share sale. Every thing will be kept secret till last moment.

[Amaad Lone]

Me as illiterate and a villager I only think of this as a milk giving cow , living cow will be divided in two. Pakistani tax payers will get the mouth and teeth in the form of PIA number doo and the milk skim part will go the investors. For them 26% will be enough.

There is nothing left in PIA. Thanks to the Zardari years PIA market share has dropped to like 30%. Only eight 777s are owned by PIA and even they still have loans against them. The A310s are worth nothing and will be scrapped by next year. The three A320s and the six due in the next three months are all on dry lease.

The company that will be sold will have the fleet , 6000 employees and the fleet loan. The overdraft will go to the company that the government will retain. Plus the hotels of PIA will be sold to pay off the overdraft, so technically the tax payer will not be stuck with the huge loans.

Selling off 100% of PIA will get this huge liability off our books, and the new owners will hopefully induct aircraft to that might help revive the the long haul PIA.

[imiakhtar]

Selling off 100% of PIA will get this huge liability off our books,

That's not the case.

PIA has been technically bankrupt for a few years now. The debts (liabilities) exceed the assets.

You could sell of the entire fleet, ground support equipment and the hotels but you would still be left with debt.

[furqan_haider]

There was another ticker, couldn't capture that, mentioning "No routes of PIA are to handover to any International Company : CAA"

[Abdullah]

Chinese firms want to invest in PIA to improve its performance.

ISLAMABAD: Some important and leading Chinese firms are ready to invest for improvement of facilities for the passengers travelling by air and even ready to initiate special training facilities for the staff of Pakistan International Airlines.

A number of leading Chinese firms have shown their interest to invest in PIA and Civil Aviation Authority (CAA) to improve their facilities for the benefit of passengers and increase the number of flights to connect Pakistan with all over the world especially with more cities of China, said Mr. Qiao Song Managing Director of a leading Chinese company Sibol China Limited while talking to APP here on Monday.

He said Pakistan just need some improvement in its present transportation facilities, reservation system, airport facilities and technical know-how to get more destinations and enhance number of passengers through PIA.

Mr. Qiao Song was visiting Pakistan to look into aspects, avenues and prospects for joint ventures between PIA and Chinese companies.

He said Pakistan is situated at a very important geographical area and PIA can take full advantage from this geographical situation to link the world.

Mr. Qiao Song said PIA could also be linked to about ten cities of China and these flights could go further to other destinations taking the advantage of close and strong ties of Pakistan and China.

He said presently there are only three destinations which are being connected between Pakistan and China while these flights can be extended to ten cities to cater more business for PIA.

He said ticketing and reservation system of PIA need to be improved so that it can be accessed from any where in the world for booking and checking the status of their booking.

Regrading problem of Union in PIA, he said, union is not a problem for improving the PIA facilities as workers' union, very important segment of the organization, are helpful in implementing the policies of the administration.

Chairman Sibol China Limited Yang Shu while giving his opinion said there are many Chinese companies already working in Pakistan and due to strong bilateral relations, there are very bight chances that more Chinese firms could come here to invest in various sectors especially in airline industry.

He said some Chinese companies have already been doing business and interacting with leading airline manufacturing companies including Boeing Company therefore, they can use their experience for transfer of technology to the staff of PIA.

Yang Shu said maintenance of the aircraft and addition of new aircraft are very important and many Chinese firms are ready to help, assist and provide financial assistance to Pakistan in this regard.

Chairman Global Industrial Solution Mian Zia, who had been doing business in China for last 25 years very successfully and motivating the new Chinese companies to invest and do business in Pakistan, talking to APP said there are wide scope for joint venture with many Chinese companies in different areas.

He said aviation industry of Pakistan needed some assistance, technical help and modern training to improve its standard equal to the world and Chinese Company Sibol China Limited is ready to invest in this sector.

He said joint training programme with the cooperation from international standard institutions, the present workers of the PIA would be made more productive and useful segments for the airline to make it more progressive, energetic and profit making institution.

Mian Zia said a group of experienced aviation industrial experts from China backed by world leading financial institutions, original equipments manufactured with business focus on new merging economic regions are interested to invest in Pakistan.

"We seeking new aviation related business opportunities in the region where we find strong local partner and government support together to build new global aviation net work to better serve the region and the world where we can see the market demands," he added.

He said taking advantage of the unique geographic position of Pakistan, it can build a high efficient, reliable, low cost, better coverage and environmentally friendly air, ocean and ground transportation hub, including airports, seaports and ground transportation network to connect the region with the world.

He said that an international logistic hub can be build in Pakistan including an international airport, an international seaport, regional railway and domestic tracking, ground network to connect regional economic centers with Asia, Africa, Middle East, Europe and America.

Mian Zia said the newly build international hub, preferably in Gwadar will be used as a strategic global logistic distribution center for Eastern and Southern Asian countries and Ocean countries to connect effectively with Middle Eastern countries with extended linkage to Europe, North and South American countries.

He said a free trade zone can be set up to attract selective industries for export oriented production in the region as well as international logistic and distribution centers for multi-national corporations.

He said this hub could also be used to promote tourist friendly environment, travel resorts along the cost line of Pakistan for international vacationers.

Mian Zia said the Chinese firms are ready to cooperate with PIA for expanding its network, expansion, fleet modernization, and corporate restructure.

Source: Barcoder.com

[smhusain_1]

If it materializes, its the best news about PIA I've heard.

Chinese firms want to invest in PIA to improve its performance.

ISLAMABAD: Some important and leading Chinese firms are ready to invest for improvement of facilities for the passengers travelling by air and even ready to initiate special training facilities for the staff of Pakistan International Airlines.

A number of leading Chinese firms have shown their interest to invest in PIA and Civil Aviation Authority (CAA) to improve their facilities for the benefit of passengers and increase the number of flights to connect Pakistan with all over the world especially with more cities of China, said Mr. Qiao Song Managing Director of a leading Chinese company Sibol China Limited while talking to APP here on Monday.

He said Pakistan just need some improvement in its present transportation facilities, reservation system, airport facilities and technical know-how to get more destinations and enhance number of passengers through PIA.

Mr. Qiao Song was visiting Pakistan to look into aspects, avenues and prospects for joint ventures between PIA and Chinese companies.

He said Pakistan is situated at a very important geographical area and PIA can take full advantage from this geographical situation to link the world.

Mr. Qiao Song said PIA could also be linked to about ten cities of China and these flights could go further to other destinations taking the advantage of close and strong ties of Pakistan and China.

He said presently there are only three destinations which are being connected between Pakistan and China while these flights can be extended to ten cities to cater more business for PIA.

He said ticketing and reservation system of PIA need to be improved so that it can be accessed from any where in the world for booking and checking the status of their booking.

Regrading problem of Union in PIA, he said, union is not a problem for improving the PIA facilities as workers' union, very important segment of the organization, are helpful in implementing the policies of the administration.

Chairman Sibol China Limited Yang Shu while giving his opinion said there are many Chinese companies already working in Pakistan and due to strong bilateral relations, there are very bight chances that more Chinese firms could come here to invest in various sectors especially in airline industry.

He said some Chinese companies have already been doing business and interacting with leading airline manufacturing companies including Boeing Company therefore, they can use their experience for transfer of technology to the staff of PIA.

Yang Shu said maintenance of the aircraft and addition of new aircraft are very important and many Chinese firms are ready to help, assist and provide financial assistance to Pakistan in this regard.

Chairman Global Industrial Solution Mian Zia, who had been doing business in China for last 25 years very successfully and motivating the new Chinese companies to invest and do business in Pakistan, talking to APP said there are wide scope for joint venture with many Chinese companies in different areas.

He said aviation industry of Pakistan needed some assistance, technical help and modern training to improve its standard equal to the world and Chinese Company Sibol China Limited is ready to invest in this sector.

He said joint training programme with the cooperation from international standard institutions, the present workers of the PIA would be made more productive and useful segments for the airline to make it more progressive, energetic and profit making institution.

Mian Zia said a group of experienced aviation industrial experts from China backed by world leading financial institutions, original equipments manufactured with business focus on new merging economic regions are interested to invest in Pakistan.

"We seeking new aviation related business opportunities in the region where we find strong local partner and government support together to build new global aviation net work to better serve the region and the world where we can see the market demands," he added.

He said taking advantage of the unique geographic position of Pakistan, it can build a high efficient, reliable, low cost, better coverage and environmentally friendly air, ocean and ground transportation hub, including airports, seaports and ground transportation network to connect the region with the world.

He said that an international logistic hub can be build in Pakistan including an international airport, an international seaport, regional railway and domestic tracking, ground network to connect regional economic centers with Asia, Africa, Middle East, Europe and America.

Mian Zia said the newly build international hub, preferably in Gwadar will be used as a strategic global logistic distribution center for Eastern and Southern Asian countries and Ocean countries to connect effectively with Middle Eastern countries with extended linkage to Europe, North and South American countries.

He said a free trade zone can be set up to attract selective industries for export oriented production in the region as well as international logistic and distribution centers for multi-national corporations.

He said this hub could also be used to promote tourist friendly environment, travel resorts along the cost line of Pakistan for international vacationers.

Mian Zia said the Chinese firms are ready to cooperate with PIA for expanding its network, expansion, fleet modernization, and corporate restructure.

Source: Barcoder.com

[Abdullah]

SAMA News reported;

JI to oppose privatization of PSM, PIA, PSO: Siraj

LAHORE: Jamaat-e-Islami head Siraj ul Haq said that his party would strongly resist plans by the government to privatize Pakistan Steels Mill (PSM), Pakistan International Airlines (PIA) and Pakistan State Oil (PSO).

“We won’t let anyone sell these public entities,” he said while marking Labor Day in Lahore.

He alleged that more than Rs30 trillion corruption was carried out in privatization while 7000, 000 workers lost their jobs.

He regretted that no legislation was done for the rights of laborers. “Any law which doesn’t have the representative of laborers is unacceptable,” he said.

The JI chief also deplored lack of action to stop child labor.

He said children were working in hotels instead of going to school. He said that children were forced to work at puncture shops due to poverty.

– SAMAA

Source: SAMA News

[talhamala]

interesting post on following link:
http://www.ch-aviation.com/portal/news/ ... stan-stake