ISLAMABAD: The Senate Standing Committee on Aviation on Tuesday sought a detailed briefing from the Pakistan International Airlines Company Limited (PIACL) Board of Directors on the airline’s financial sustainability plan and future course of action to transform the national flag carrier into a profit-making entity.
The committee meeting, chaired by Senator Mushahidullah Khan, was earlier briefed by PIACL Chief Executive Officer (CEO) Air Marshal Arshad Malik on reports about closure of the airliner’s Roosevelt Hotel in New York, besides financial constraints and capacity issues being faced by the airline.
He clarified that the PIA was not going to sell the hotel, “but it will be closed down from December 31 for renovation purposes”.
“The Privatization Commission had been approached to hire a financial consultant through an international tender so that a future course of action, considering all the available options, could be devised,” The PIA CEO stated. “The decision to determine whether necessary renovation or repair work will be carried out or the existing building will have to be demolished for reconstruction will be taken later.”
Arshad Malik informed that Roosevelt Hotel, a 19-storey building located at a prime location, was acquired by PIA (through a partnership) in 1978 from its profits and as part of the airline’s diversification strategy.
In 1999, he said, the airline acquired 100pc shareholding at $36.5 million from its resources and without any aid from the government.
He said the property had more than 1,000 rooms, having an area of 43,313 square feet, adding that it was run by the world’s premier hotel management company, Interstate Hotel and Resorts USA.
“The current market value of the hotel, as assessed by M/s Deloitte, is $662 million based on the highest and best use.”
The PIA CEO said the financial position of the hotel had been in the ‘red’ for quite some time, mainly due to debt servicing, unionization, and dilapidated condition of building, rooms and public area, which needed immediate upgrade and major repairs.
He said the declining business of the hotel further aggravated due to the coronavirus pandemic, which could increase the loss to $6 million per year.
Meanwhile, the committee also took up a harassment case of PIA and listened to both the parties.
Senator Sherry Rehman was of the view that the accused of harassment, who was posted as HR manager in PIA, should be repatriated to his parent department with a recommendation to hold a fresh inquiry against the officer.
“It is a classic textbook case of harassment and the officer needs to be removed from his post and sent back to its original organization,” she observed.
Senator Nauman Wazir Khattak suggested to further look into the case by arranging a special sitting of the committee members, besides giving another hearing to the complainant and accused.
Among others, the meeting was attended by Senators Manzoor Ahmed Kakar, Syed Muzafar Hussain Shah, Shaheen Khalid Butt and Sajjad Hussain Turi, senior officials of the Aviation Division and PIACL.