ISLAMABAD: Pakistan International Airlines (PIA) is planning to lay off 3,000 employees through a voluntary retirement scheme this year to reduce its annual losses by Rs4.5 billion ($28.26 million), a top official said on Wednesday.
The Pakistani government on Tuesday approved the national flag carrier's voluntary separation scheme (VSS) to remove the employees from service. PIA management is now seeking about Rs12.7 billion from the government to compensate them.
"This will result in 4.5 billion rupees savings per annum," Abdullah Hafeez Khan, PIA’s general manager for corporate communications, told Arab News.
"This means we will be paying back to the government in two and half or three years," he said, adding that between 2,500 and 3,000 employees will be laid off through the scheme.
“Hopefully, we should start the process by early next month,” he said. "The biggest advantage (of the scheme) is that this will help us cut annual expenditure, save resources, improve the airline’s culture and productivity."
Explaining the VSS process, Kahn said that all employees will be given 14 days to accept the retirement offer.
“If employees don’t want to avail it, they are more than welcome to stay.”
The most highly skilled workers will be interviewed if they choose to accept the scheme, Khan said.
“We will ensure the process doesn’t lead to a brain drain.”
The loss-ridden national flag carrier has been struggling to stay afloat after a significant cut in the number of its domestic and international flights following the coronavirus outbreak. With around $4 billion accumulated losses, PIA is currently operating a fleet of only 30 aircraft that are maintained and operated by some 14,000 staff.
In recent years, the government has tried several measures to cut down PIA’s annual losses and approved bailout packages to keep it financially afloat.
PIA is a state-run entity that has incurred billions of rupees of losses for the last several years. Laying off extra employees was always on cards, though no previous administration could implement the plan due to political pressure and backlash from employee unions.