Pakistan International Airlines (PIA) has suffered massive financial losses over the past decade due to systematic mismanagement and fraudulent practices, according to a report by the Auditor General of Pakistan.
The audit, covering 2007 to 2017, reveals irregularities worth billions of rupees. These include inflated aircraft lease agreements, dummy bookings, and procurement of spare parts through intermediaries rather than open markets.
As per a report by Express News, the national carrier sustained damages from fraudulent practices in leasing and purchasing aircraft, booking seats, and managing ticket refunds. In a prominent example, 8,800 tickets were reportedly refunded approximately 45,000 times between 2011 and 2017, with many tickets being refunded multiple times. “The internal audit firm, despite its strong reputation, failed to identify these frauds,” noted the report.
The audit holds PIA’s engineering department responsible, identifying instances where planes were acquired at inflated costs or procured despite being deemed unfit for operation in other jurisdictions.
Additionally, the report highlighted the questionable practices of travel agencies, which allegedly booked dummy seats, preventing their sale and resulting in partially vacant flights. This practice reportedly allowed some travel agents to falsely mark flights as full, only for the seats to remain unsold up to an hour before departure.
Former PIA Auditor General Ishtiaq Rizvi told Express News that attempts to expose fraud were thwarted by his reassignment. Rizvi alleged that some PIA officers owned companies or acted as covert agents for firms benefiting from kickbacks. He further disclosed that aircraft parts were unnecessarily replaced multiple times, sourced from specific companies instead of through competitive procurement from the open market.
He added that measures like “golden handshakes” to reduce staffing by over 3,500 employees have not curbed PIA’s losses, suggesting instead that if recovery efforts targeted those responsible and skilled officers were appointed, the airline could regain stability within two years.
PIA’s woes have been further compounded by the premature retirement of aircraft like the Boeing 777s, which, despite a typical lifespan of over 30 years, were reportedly grounded after only 10-14 years of use without accountability.
The findings add to calls for stringent reforms within PIA to recover losses and restore profitability amid the airline’s prolonged financial crisis.
