Pakistan Airline to Pledge New York, Paris Hotels to Raise Cash: Bloomberg

By Naween A. Mangi

Nov. 19 (Bloomberg) -- Pakistan International Airlines Corp., on course for a fourth straight annual loss, plans to raise 30 billion rupees ($379 million) by pledging two hotels as it struggles to raise funds amid the credit crunch.

``We are an organization no one wants to invest in,'' Managing Director Mohammad Aijaz Haroon said in an interview in his Karachi, Pakistan office yesterday. The airline's Roosevelt Hotel in New York and Hotel Scribe in Paris will be put into a new business, which state-owned companies will be invited to invest in, he added.

The nation's largest airline also plans to cut 5,000 jobs, or 28 percent of its workforce, by shifting workers to outsourcing companies after failing to get a cash injection Pakistan's cash-strapped government. The carrier, which is 88 percent state-owned, is also battling higher fuel costs and a travel slowdown caused by the global recession.

``There are no prospects for this airline,'' said Habib-ur- Rahman, who manages 4.5 billion rupees in stocks and bonds as chief executive of Karachi-based Atlas Asset Management Ltd. ``It's a drain on the national exchequer and the government should examine its viability and wind it up.''

PIA, as the carrier is also known, posted a loss of 38.4 billion rupees in the first nine months compared with 10.9 billion rupees a year earlier.

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