Pakistani pilot licence scandal: The fallout

Karachi, Pakistan – On May 22, an Airbus A320, operated by Pakistan International Airlines (PIA) crashed into a densely populated neighbourhood in Karachi, just about a kilometre away from the city’s main Jinnah International Airport.

The crash killed 97 of the 99 people on board, and one person on the ground, according to official data. 

This was PIA’s second crash in five years. In December 2016, an ATR-42 flying from Chitral to the capital, Islamabad, crashed into a hillside near the town of Havelian, killing all 47 people on board. 

RELATED | Deadly skies: Pakistani pilots allege systemic safety failures

According to the Flight Safety Foundation, there have been 60 serious safety-related incidents reported in Pakistan since 1956.

This does not include other incidents or manoeuvres – such as an alleged recent pattern of unsafe approaches – which are privy only to the airline’s own Flight Data Management System (FDMS) and the country’s aviation regulator, the Pakistan Civil Aviation Authority (PCAA).

Since 1965, PIA has had 10 fatal crashes of its commercial aircraft, with at least 757 people killed in those accidents, according to the Flight Safety Foundation.

Including all airlines, Pakistan has seen five major air crashes in the last 10 years alone: the two PIA crashes mentioned above, an Air Blue Airbus A321 crash that killed 152 people in 2010, a charter airline Beechcraft 1900-C crash that killed 21 later that year, and a Bhoja Air Boeing 737 crash that killed 127 people in 2012.

How did it get so bad?

Founded in 1955, PIA was for years a trailblazer in the realm of commercial aviation, becoming the first Asian airline to operate jet aircraft and helping to set up other airlines in the region, including the current commercial aviation giant Emirates.

As competition in the sector increased, and the state-owned airline continued to be burdened with high costs, revenues began to decline. In recent years, an airline that was once at the heart of innovation has found itself unable to keep up with changing commercial travel standards. 

PIA is heavily staffed, with one of the highest employee-to-aircraft ratios in the world. Employees have historically had good job protection through a strong union, and there have been near-constant allegations of appointments within the airline – at all levels – due to political coercion. 

In recent years, the government has repeatedly attempted to revamp the airline, with at least six top leadership changes in the last 10 years alone. The result has been a stop-start series of restructures, rebrands and fleet expansion efforts. 

In September 2018, the-then CEO Musharraf Cyan was removed by Pakistan’s Supreme Court for the “violation of guidelines during his appointment”.

Cyan said he was removed because he had led a rebranding effort of which the Supreme Court disapproved.

“We wanted to modernise PIA into the current aviation age,” Cyan told Al Jazeera. “It is an airline which is stuck in the past.”

Air Marshal Arshad Malik was appointed Cyan’s successor. Malik took over as a serving three-star officer in the Pakistan Air Force, from which he retired in July 2020. He continues to hold the CEO post.

What is the ‘fake licence’ scandal?

In June 2020, Ghulam Sarwar Khan, Pakistan’s aviation minister, made an explosive claim on the floor of Parliament: that more than 30 percent of Pakistani pilots held “dubious” licences, obtained through fraudulent methods.

The statement caused an uproar in aviation circles, forcing authorities to ground 262 pilots.

Several countries, including Malaysia, Ethiopia, the UAE, Qatar, Oman, Saudi Arabia, Kuwait, Vietnam, Bahrain, and Turkey, grounded all of their Pakistani pilots until their credentials could be verified.

For PIA, the disruptions went even further – grounding 101 of its 452 pilots, but also seeing its landing rights in the United Kingdom, the European Union and the United States suspended. 

Abdullah Khan, the PIA’s spokesperson, told Al Jazeera that the airline was being conflated by many with the PCAA, the country’s aviation regulator, which is responsible for issuing licences. 

“Out of 262 pilots, 101 pilots are from PIA, and the rest are from other airlines,” he said. “PIA is the generic brand, everything has been clumped together.”

“People attribute everything wrong with aviation to be PIA, when that is not the case.”

What are the implications for PIA? 

The implications of this crisis for an airline already mired in extensive debt are complex. 

The coronavirus pandemic has crippled much of the world’s aviation sector, with commercial aviation seeing drastic drops due to worldwide flight restrictions and a fall in demand.

PIA had already reduced its daily domestic and international flights from about 110 to just eight. 

Haemorrhaging money, PIA has now seen its landing rights in the EU and the UK, both major markets for its international flights, stripped. 

In the US, where the airline had been lobbying the Federal Aviation Authority (FAA) to allow it to fly direct flights for the first time, a preliminary authorisation that allowed evacuation flights for stranded Pakistanis was cancelled. 

How safe is Pakistan’s aviation sector? 

International airlines generally seek three major safety certifications: the IATA Operational Safety Audit (IOSA), the US Federal Aviation Administration (FAA) , and the Third Country Operator Authorisation from European Union Air Safety Agency (EASA). 

EASA’s current ramp inspection rating, also known as a Safety Assessment of Foreign Aircraft (SAFA) rating, for PIA is 0.66, according to airline spokesman Khan. In 2018, that rating was at 2.38, according to then-CEO Cyan. A lower SAFA rating indicates a higher level of compliance with EU safety requirements.

How healthy is the airline financially?

The airline carries three billion dollars in debt due to losses accumulated across several years, a crippling burden that is stunting growth.

“PIA is per se not a normal company – when you look at the financial health of a company, the assets are always balanced out with liabilities and equities,” said spokesperson Khan.

“In PIA, there is a very lopsided situation where the assets and the total liabilities are at a 1:5 ratio.”

Khan said the company’s current revenue numbers cannot sustain the debt, and it requires constant injections from the government.

“The problem is that the debt is so large, that the government cannot fit [it] into one, or even three financial years because there is not enough depth in the budget to allow that to adjust the amount,” he said.

The government has tasked the current management with focusing on maintaining operational profitability, so that the debt does not continue to rise.

Last year PIA saw a 42 percent increase in gross profits – the first time in eight years. The national carrier had incurred a loss of Pakistani rupees 19.7 billion ($118m) in 2018.

Meanwhile, the Pakistani government is considering selling two hotels owned by the airline – the Roosevelt Hotel in New York City and the Sofitel Le Scribe Paris Opera in Paris – to generate much-needed revenue.

Follow Alia Chughtai on Twitter: @AliaChughtai.