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PIA Decides To Retire 3,500 Employees Through Voluntary Separation Scheme (VSS)

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Now Reading: PIA Decides To Retire 3,500 Employees Through Voluntary Separation Scheme (VSS)

Following in the footsteps of Pakistan Steel Mills (PSM), Pakistan International Airlines (PIA) has reportedly decided to retire 3500 employees via the Voluntary Separation Scheme (VSS). The reports come from sources close to the Minister of Aviation.

The Economic Coordination Committee (ECC) of the Cabinet will get the employees’ retrenchment plan submitted to it from aviation officials for approval. According to sources, the Aviation Division briefed ECC on the matter of Pakistan International Airlines Corporation Limited (PIACL). They brought up a meeting that was held on 30th December of 2017 where it was decided that the government will pick up PIACL’s debt up to a mark for five years. The payment for that would be made directly to the lenders.

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Following through with that decision, the finance division of the government had allocated Rs. 24.5 billion in the budget of fiscal year 2019-2020 for payment of said debt. As per the sources, the Aviation Division has also said that a summary for the ECC was initiated regarding the government’s support which was required by PIACL for mark-up and VSS on July 9, 2019. Though, the ECC postponed its decision to after the 2019 Hajj.

It was further informed that a shortfall of Rs 3.2 billion existed in the government allotted budget to mark-up PIACL’s debts. A short summary for the mark-up of financial year 2019-20 is as follows:

(i) Funds allocated for FY2019-20 – Rs 24.5 billion
(ii) Actual utilized funds up to February, 2020 + WE (0.6)- Rs 20.59 billion
(iii) To be disbursed by March – Rs 1.556 billion.
This makes it so that an amount of Rs 2.35 billion is still in balance. Moreover, the projected claim for 4th quarter of FY2019-20 is Rs 5.5 billion. Thus, the additional budget required for it is 3.2 billion rupees.

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The sources have further stated that to meet the markup against the government’s guaranteed loans, the Aviation Division has requested the ECC additional funds of 3.2 billion rupees.

The Aviation Division also said that PIA has planned to offer VSS to 3500 employees. This move will cost approximately 9.7 billion rupees. All the details are being formulated under consultation with an expert legal counsel on the matter. So, the detailed outline, procedure and cadres to be offered VSS would most likely be completed on 30th June,2020. The plan would then be presented to the ECC of the Cabinet for consideration and hopefully, approval accordingly.

 

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