The Pakistani government plans to divide PIA - Pakistan International Airlines (PK, Islamabad International) into two entities, one administrative and the other operational, in an effort to ease the severe financial condition of the state-owned carrier, the country’s transport minister Khawaja Saad Rafique said at a news conference in Lahore on June 4.

PIA cannot continue in its current form and changes are needed to improve its operations, he said. He did not elaborate on which parts of the company would be placed where, or whether the proposed move was an extension of earlier plans to restructure the heavily loss-making airline or to sell segments of the carrier.

However, he did speak about the Roosevelt Hotel in Manhattan, New York, which closed in October 2020 following huge losses and is owned by the airline through its investment arm PIA-Investment Limited. The hotel has been given on lease for three years to the New York City Health and Hospitals Corporation, he announced.

“The Roosevelt Hotel is an asset of Pakistan in America. We have given it and its 1,250 rooms on lease for a period of three years, and Pakistan will earn USD220 million through this lease. We have now utilised this precious asset to generate money,” he said, as quoted by the news channel ARY News and other outlets.

A “major issue” the government had been facing was to pay the salaries of the hotel’s employees. “Now, as a result of the agreement, 77 employees will serve there and the rest will be terminated,” Rafique said, adding that it was also decided that no employees from the Civil Aviation Authority would be employed at the property.

In addition, Rafique announced that the government had decided to outsource the operations of the three airports Islamabad International, Karachi International, and Lahore International to a foreign company with the aim of improving the services provided there. This does not mean selling them, he stressed. “An agreement has been signed with the International Financing Corporation (IFC), and numerous countries have expressed an interest in collaborating with it,” he said.