Pakistan national airline staff end strike -pilots

February 11, 2011

KARACHI, Feb 11 (Reuters) – The staff of Pakistan’s national airlines on Friday ended a strike, which had grounded all flights, after their demands were met, said Sohail Baluch, chief of the Pakistan Airline Pilots’ Association (PALPA).

The strike, which has cost Pakistan International Airlines (PIA) (PIAa.KA) more than 1 billion rupees ($11.8 million), began on Tuesday in protestest over a proposed codeshare agreement with Turkish Airlines THYAP.IS.

Strikers were also demanding the removal of PIA’s managing director, Aijaz Haroon, a pilot considered a close friend of President Asif Ali Zardari, and immediate reinstatement of staff recently suspended or dismissed.

“We are ending our strike from midnight. All our demands have been met,” said Baluch.

PIA was not available to comment.

Under the proposed deal with Turkish Airlines, which is yet to be approved by the government and regulators, PIA would relinquish some of its lucrative European and U.S routes.

This includes flights to Germany, Spain, Italy, France, the Netherlands, Chicago and New York.

According to a joint action committee of PIA employees, handing over these profitable routes will deprive the national airline of billions of rupees in revenue.

Like many state businesses in Pakistan, PIA has been hit hard by mounting debts and mismanagement. Analysts say any move on the part of the government to further subsidise PIA or other ailing national institutions will not bode well with international donors.

PIA reported losses of 11.7 billion rupees ($137.5 million) in the nine months to Sept. 30, 2010, when its cumulative losses stood at 83.7 billion rupees.

In November 2010, PIA asked the government to write off losses and debt of about $1.7 billion to save it from bankruptcy, a tough ask for the government which relies heavily on foreign aid, and an International Monetary Fund loan programme that, among its many conditions, calls on the government to reduce subsidies and spending. (Editing by Michael Georgy and Erica Billingham – Reuters)

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