PIA’s Strategic Business Plan 2018-2022 Enters Final Phase of Completion – Brings Radical Transformational Changes in PIA’s Direction in a Fast Forward Mode to Turnaround PIA Towards Sustainable Profits and Growth.
(Media Release to Sada-e-Watan Sydney by Mr Mashood Tajwar, Spokeman for PIA)
Prime Minister Honourable Shahid Khaqan Abbasi
On 1 November 2017, the PIA’s team led by the new management made a presentation to the Cabinet at the Prime Minister’s Secretariat. The session was chaired by the Hon. Prime Minister, Mr Shahid Khaqan Abbasi. The development of the Plan is being led by Mr Zia Q Qureshi, Chief Operating Officer, under the leadership of the Chief Executive, Mr Musharraf Rasool Cyan. The core leadership team is supported by a large team from within PIA and external advisers where necessary as well as significant participation of the new Board of Directors.
Status of the Plan
The PIA team has made a concentrated effort this year to develop a zero based plan using a comprehensive methodology, market analysis and industry research as well as an assessment of PIA’s existing weaknesses and shortcomings that have prevented PIA in turning around its performance and heavy losses in the past.
The Plan is fast approaching finalization with a number of sessions having been held with the Board, Ministry of Finance and now the Cabinet.
This plan is critical for turning PIA around from its current position with accumulated losses and built up debt in excess of PKR 350 billion that has been built up over a decade. The Plan provides a road map to fast forward PIA towards becoming a Company that is profitable and worthy of carrying the National flag.
Once the Board approves the Plan, it would then be finally submitted to the Prime Minister and the other critically important stakeholders like the Ministry of Finance for their approval and endorsement. However, with Board’s participation in the Business Plan development and concurrence with our work to date, we are now engaging with the key stakeholders like the Ministry of Finance and the Cabinet to gain their input and buy-in, before the Plan is finalized.
During the Cabinet session on 1 November 2017, the Prime Minister challenged some of the numbers in the Business Plan as being too aggressive and a number of cabinet members provided their feedback and comments. This valuable input is being examined and will be incorporated in the Plan as appropriate. This is the usefulness of the consultation approach we have adopted this time around before launching the Plan. Through this approach we are able to leverage the wisdom of all stakeholders who know about PIA issues and have thought a lot about PIA’s betterment for many years. It would help us avoid many pitfalls during the implementation phase.
Mr Musharraf Rasool, CEO, said that he was delighted with the fact that very hard work by the team is paying off as during the Cabinet session that lasted hours, none of the fundamentals in our Business Plan were objected to in terms of the business objectives, the new business model and the key business strategies. This is great news for us. As for numbers, we are reviewing these again and perhaps we can be a bit more conservative. We have built both, conservative and aggressive scenarios. In turning around PIA, we want to establish a little aggressive targets but at the same time want to be realistic in context of PIA’s current constraints.
The Secretary, Ministry of Finance, Mr Shahid Mehmood acknowledged the good work of PIA in developing the Business Plan during the Cabinet session and indicated that the Ministry will work with PIA in fine-tuning the numbers.
The discussion with the Cabinet in relation to PIA’s debt structuring is important for implementing the Business Plan. No Company can function well in a distressed mode. Our proposal to the Government in relation to debt restructuring provides options that are based on creating enough business value over the next 5 years to help recover the money that has been sunk over a long period of time.
Zia Q Qureshi, Chief Operating Officer, PIA
Mr Qureshi said: “effective consultation with the key stakeholders is very important and is a key element of my approach which always results in trashing out issues and gaps in the Business Plan development process. We welcome the input and debate in relation to our efforts. We are looking forward to a number of working sessions with the Ministry of Finance and other stakeholders who have a lot to contribute.”
However, I can say this that we are on the right track and the fundamental model we have developed along with focused business strategies is based on world class expertise, industry best practices, market conditions and solid data along with rigorous analysis and assessment of current operations, like never done before in PIA. It has resulted in a breakthrough plan that will be soon finalized. The Board will then approve it. In the meantime, the consultation process, internally and externally with the key stakeholders will continue.
Sardar Mehtab Ahmed Khan
The Hon Adviser to the Prime Minister on Aviation Sardar Mehtab Ahmed Khan also attended the Cabinet meeting and the Board and management brainstorming session held on 27 October 2017 on the development of the Business Plan and provided input for steering PIA towards the right direction. He commended the work of management and the Board so far and said that he believed the Strategic Plan this time is on the right track and, if implemented well, could turnaround PIA and will make it into a world class airline of which Pakistan would be proud of. He also said that many steps have already been taken by the new management in a short period of time that are starting to show positive improvements which gives him great confidence in management and Board’s expertise and hard work of the PIA’s workforce.
The Board concluded that the executive and management team have fully grasped the key issues in turning PIA around and have developed comprehensive and radically different strategies from the past to return PIA to profitability.
The Board expressed their satisfaction with the detailed analysis and expertise being channeled into the development of the Business Plan. The Board commended management for its relentless work over the last two months to conduct rigorous data analysis, market research, and diagnostic business reviews to examine the performance gaps and root causes for the recurring losses. This business analysis is driving the strategies to stop the historic losses and return PIA to profits.
Mr Bilal Sheikh, Chief Commercial Officer and Zia Qureshi, Chief Operating Officer
Mr Bilal Sheikh, Chief Commercial Officer, noted that the team has adopted a zero based approach and built the plan from the ground up, using a very structured and leading edge methodology that has been implemented by many of the leading global companies. He also said that he has seen tremendous enthusiasm and commitment from PIA’s younger managers and that gives him much confidence that PIA has a good future ahead.
Mr Qureshi said that Mr Musharraf, in his CEO role has provided fantastic leadership in bringing the entire PIA management team together through a range of cross-functional and departmental teams to participate in developing the Business Plan and undertaking the Urgent Turnaround Agenda.
He further said: “I have a track record of leading transformation of some of the world’s leading companies in a range of industries including the airline industry with much much larger challenges than PIA. This track record speaks for itself. PIA has everything it needs to become a highly profitable airline, however, it needs a serious commitment of its owner, GoP, in relation to the legacy loans / debts and a radical restructure that is aligned to the new business model that we have developed. If there is a will, we have the way.”
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