Pakistan Airlines' German CEO Barred From Leaving Country

  • Government to investigate a plane lease contract by airline
  • State-run carrier seeks to revive business by adding planes

Pakistan barred the first foreign national chief executive of the state-owned national airline from leaving the country as the government begins an investigation into a plane-lease contract.

Bernd Hildenbrand, the German head of Pakistan International Airlines Corp., has been put on a so-called exit control list and the nation’s anti-graft Federal Investigation Agency has been directed to probe the national carrier, Interior Ministry spokesman Sarfraz Hussain said by phone on Friday without giving details.

Bernd Hildenbrand

Photographer: Asim Hafeez/Bloomberg

The order comes as the nation looks to turnaround the carrier that hasn’t made a profit in more than a decade by adding planes and increasing flights on profitable routes. Hildenbrand has had a turbulent reign dealing with a plane crash in December that killed 48 people on board and labor unrest after the government attempted to sell a stake in the airline.

“It is the prerogative of any government to keep an eye on spending being done by entities owned by it, but one expects this to be done in a reasonable way,” Hildenbrand said by phone on Friday. “They don’t seem to have much understanding of the aviation leasing business so things can be explained to them. If they have doubts over my integrity they are welcome to interrogate me.”

Open Tenders

Officials at the German consulate in Karachi, Pakistan’s commercial capital, didn’t immediately comment when contacted. Hildenbrand, who is based in the city, said he only found out about his travel ban from press reports and that nobody in the government has approached him. He said that PIA’s tenders are open and that airline invites the media to report on them.

The investigation into the airline and its chief executive comes as the government of Prime Minister Nawaz Sharif is trying attract foreign investment and is shepherding about $55 billion in loans and financing from China to fund badly needed infrastructure projects. 

“Putting him on the exit control list is going a bit too far since he has not been proven guilty yet,” Shaukat Tarin, a former Pakistani finance minister, said by phone. “The message going abroad is we are yo-yos. That means we, on the one hand, implore people to come to invest in Pakistan and then mistreat them on the other.”

Sharif’s administration has also made stalled attempts to turn-around bloated state entities as part of a $6.6 billion International Monetary Fund reform program that ended in September.

‘Not Helpful’

PIA wants to increase its fleet to 50 over two years from 37, said Hildenbrand, who believes the graft probe will hinder the process.

“Of course what is happening right now is not helpful for us, this damages the name of PIA a lot,” Hildenbrand said. “We have to go through a tender process. We don’t know who will participate. Whatever we do is according to the rules.”

PIA’s shares rose 1.2 percent to 7.9 rupees at 3:40 p.m. local time in Karachi. The stock has declined 14 percent so far this year, compared with a 1.6 percent gain in the nation’s benchmark 100 share index.

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