PIA's decision to enlist the help of the US-owned Sabre Group was a brave move in Pakistan's politically fickle environment. The airline contends that its decision, endorsed at the highest political level, is central to turning the national carrier around and one which it is convinced will pay large dividends in the long term.
Under the three-year turnaround consultancy agreement concluded in March last year, Sabre will work with PIA in on fleet planning, revenue management, sales, customer service, loyalty programmes, baggage handling, human resources, operations and maintenance. Assisting Sabre will be British Airways' Speedwing division.
"Our agreement is to go through every function of the carrier within three years and bring them up to an industry 'best practice'," says Sabre airline consulting senior director Shane Batt.
Its target is to achieve "-a $570 million improvement on top of a negative beginning, with the goal of getting to a 5% profit margin this year, 7.5% in 2000 and 10-15% in 2001 and sustaining it from there on", he adds.
TEAM of Consultants
To this end, the company has seconded to PIA a team of 18 international consultants from Australia, Cyprus, Ireland, Russia, the UK and the USA, who will be making "strong recommendations". Sabre will be paid on the basis of measured improvement to the airline's bottom line, to be reviewed each quarter. "If the improvements don't occur, we don't get paid," explains Batt, adding: "We're not in the business to lose money."
A second separate facet to Sabre's involvement with PIA is the take-over of the carrier's outdated IT operation. The 15-year agreement will involve a complete overhaul of the carrier's data-processing software and hardware, which dates back to the mid-1970s. The carrier's IT personnel will be offered positions with the new company, tentatively referred to as Sabre Pakistan.
"We're going to put them into 1999 technology within about nine months," states Batt. "The airline has a significant Year 2000 compliance issue and so we're having to get things into a high gear to ensure their critical systems are changed out during in 1999 in ways that allow them to operate successfully."
Source: Flight International
