September 4, 2018 / 11:33 AM / a month ago

CEO of Pakistan's national airline steps down on order of top court

ISLAMABAD (Reuters) - The chief executive of Pakistan’s loss-making national airline on Tuesday stepped down on the order of the Supreme Court, which has ruled his appointment was made in violation of the rules and regulations.

The court order was the latest blow to Pakistan International Airlines (PIA), which was reported last year to be losing up to $30 million per month, as well as the latest sign of the Supreme Court taking a hands-on approach to government-run businesses.

PIA named Musharraf Rasool Cyan as its chief executive late last year, entrusting him with turning around the national carrier’s fortunes.

Cyan, who the PIA had described as a “professional technocrat”, was tasked by the outgoing government of Prime Minister Shahid Khaqan Abbasi to improve the carrier’s reputation, which was dented by allegations of financial mismanagement.

A three-member panel headed by Chief Justice of Pakistan Saqib Nisar ruled on Monday that Cyan neither met the criteria for the job, nor had any aviation experience.

The PIA’s counsel Naeem Bukhari argued aviation experience wasn’t mandatory for the job, which the court rejected.

One of the three judges remarked that Cyan’s appointed was illegal because he got the job due to his links with an adviser to the former prime minister.

The PIA’s spokesman, Mashhood Tajwar, told Reuters by phone that the “court decision has been implemented in letter and spirit.” He said Cyan had relinquished his duties.

Tajwar said the airlines’ board of governors would find an interim CEO until a permanent replacement was made.

Cyan’s appointment followed the removal of the PIA’s German chief executive Bernd Hildenbrand, who was ousted in April last year after authorities launched a corruption investigation into the leasing of planes from a Sri Lankan carrier.

In an interview with Reuters in March 2017, Hildenbrand said PIA was losing about 3.1 billion rupees ($30 million) per month, while Gulf-based rivals such as Etihad Airlines and Emirates Airlines were eating into its market share.

Reporting by Asif Shahzad; Editing by Mark Potter

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