Why is PIA Losing Money Amid Air Travel Boom in Pakistan?

What is behind the domestic and international aviation boom in India and Pakistan? Why is Pakistan doing better than India in terms of international passenger growth while badly lagging in domestic air travel?

Passenger Aircraft at Karachi International Airport

What has happened to the global airline industry since the passage of the US Deregulation Act of 1978? Why did many big airlines of yesteryears die in spite of huge growth of air travel? How did so many upstart low-cost carriers succeed while state-owned airlines failed?

Why are the domestic air fares in Pakistan three times higher than those in India for similar distances? Why does state-owned PIA control two-thirds of Pakistan's domestic market? Why isn't there more competition on domestic routes in Pakistan?

Why are state-owned airlines, including PIA and Air India, losing a lot of money, requiring massive taxpayer subsidies and still performing poorly? Why aren't these airlines run more efficiently? Are PIA jobs used for political patronage? Why does PIA fly so many empty seats rather than cut fares to expand market?

Viewpoint From Overseas host Faraz Darvesh discusses these questions with Misbah Azam and Riaz Haq (www.riazhaq.com)

https://youtu.be/hh99nMnueBA

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Pakistan $20 Billion Tourism Industry Booming

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Comment by Riaz Haq on June 24, 2019 at 10:02am

Some questions about public policymaking in Pakistan
By Shahid Javed Burki

https://tribune.com.pk/story/1998843/6-questions-public-policymakin...

Serious public policy work was put on track by president Ayub Khan soon after he took over the country in October 1958. He developed the Planning Commission into a well-endowed policymaking institution. Told that Pakistan did not have the skills that were needed to staff such an institution, he turned to the United States for help. That came in the form of advisers mostly from the Harvard Development Service who were appointed in the Planning Commission in Karachi and in the Planning and Development Departments in East and West Pakistan.

When Ayub Khan surrendered his office in 1969, the Planning Commission began to wither. A series of blows were delivered to the planning process by the government headed by Zulfikar Ali Bhutto, who ably led Pakistan to recover from the loss of East Pakistan in December 1971 but destroyed much of what Ayub Khan had done for the country. Bhutto, an arrogant man, had much greater confidence in his ability to develop the country on his own and bring about social change than base his moves on institutional advice. He had no use for the Planning Commission.

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What follows is a brief discussions relating to some of the questions asked above. Taking all of them in detail would take up a more than one newspaper article.

One, our leaders must recognise that a negative narrative prevails about Pakistan in the foreign press. Whenever a story appears about Pakistan in the western media, its content and tone are negative. This situation can only be remedied if the current leadership comes forward and presents to the world a believable plan of action that would restore people’s confidence in their future as well the future of their country. As economists emphasise all the time, confidence is an important driver of growth, confidence leads to increase in domestic and as well as foreign investment.

Two, there is an urgent need to strength the Federal Board of Revenue. Those who don’t pay taxes or pay only nominal amounts must be made to fear the revenue collector. It is that fear that has made the Internal Revenue Service the most feared part of the United States government. In America, April 15, the day taxes are due, is by far the most important day on the calendar.

Third, we need to focus on three sectors as the future determinants of economic growth and social change: they are high value-added agriculture, small- and medium-scale industries and modern services. Development of the human resource would be an important part of this strategy. CPEC could play an important part in this endeavour.

Fourth, our policymakers need to recognise that Pakistan is no longer a rural place but an urban country. No single urban policy would serve the purpose. We will need separate policies for the metropolitan areas, peripheral areas of large cites, medium-sized cities and small towns.

Fifth, the government must get closer to the people and this requires the formation of a multi-tiered system of local government on the lines of Ayub Khan’s system of ‘basic democracies’.

And sixth, working with Afghanistan, we should use the local system of government to bring economic and social development to these areas. It is only then that we will be able to prevent the tribal youth from being attracted to extremist causes.

Comment by Riaz Haq on January 4, 2020 at 10:43am

#Pakistan's private airline start-up AirSial to lease trio of A320s from AerCap to fly #Karachi, #Lahore and #Islamabad routes. https://www.flightglobal.com/fleets/pakistani-start-up-airsial-to-l...

AerCap has disclosed an agreement to provide Pakistani start-up carrier AirSial with three used Airbus A320s.

The A320s will become AirSial’s first aircraft upon delivery in the second quarter of 2020.

AerCap is described by its chief executive Aengus Kelly as “the biggest aircraft lessor in the fast-growing Pakistani aviation sector”.

Cirium fleets data shows that AerCap manages two Boeing 777-200s operated by flag carrier Pakistan International Airlines and leased several aircraft to Shaheen Air International before it ceased operations in February. The Irish lessor has also supplied aircraft to Airblue.

Kelly states: “With the rapid growth in air traffic in Pakistan as well as air liberalisation, AirSial is well positioned to take advantage of this opportunity.”

The airline’s chairman Fazal Jilani has thanked AerCap for “not only recognising the potential of the Pakistan aviation market but also showing their firm belief in the Sialkot business community”, referencing the city in which AirSial is based.

“We at AirSial, along with AerCap, will take our new partnership to the highest of standards and together make AirSial ‘The Pride of Pakistan’,” Jilani vows.

AirSial has been founded by the Sialkot Chamber of Commerce, the start-up’s LinkedIn profile indicates.

It also declares the airline’s intent to “to fly high by offering an exceptional blend of flying experience – rooted firmly in best safety and operational practices, with an attitude enthused with the pride of our culture, warm hospitality and service standards par excellence”.

Comment by Riaz Haq on September 16, 2020 at 7:42am

#BritishAirways compete with #Virgin Atlantic for flights/passengers to/from #Pakistan. BA plans to add a 2nd route to Pakistan, 4 times a week from #London Heathrow to #Lahore as Virgin Atlantic starts service #Manchester-#Lahore. #tourism #economy #PTI https://ukaviation.news/ba-to-take-on-virgin-in-pakistan/

British Airways (BA/BAW) has announced that it plans to added a second route to Pakistan, from London Heathrow to Lahore.

The move comes just days after Virgin Atlantic announced that it was launching services to Islamabad and Lahore from London and Manchester.

The British Airways flight will operate 4 times-per-week using a Boeing 787 Dreamliner.

BA director of network and alliances, Neil Chernoff, said: ““Our new flights will give us the opportunity to open up more of Pakistan to travelers from the UK, so they can experience its delights and rich culture,”

Adding: “We also think this will be hugely popular with the British Pakistani community, giving them more convenient options to visit family and friends.”

The first flight will operate on 12th October, a month before Virgin’s operations begin.

Comment by Riaz Haq on December 4, 2020 at 8:57pm

UK aviation firm acquires stakes in Pakistan

https://www.dawn.com/news/1594125


A UK-based global aviation services specialist Menzies Aviation on Friday announced the acquisition of a 51 per cent shareholding in Royal Airport Services (RAS).

An aviation services business based in Pakistan, RAS has been operating in the country since 2007 and has a strong position in local markets, a press release said. It has been providing a range of aviation services including ground and cargo handling, airline ticketing and cargo sales across Pakistan. RAS handles both domestic and international carriers across eight airports, with revenue in excess of $20 million in 2019, the press release added.

The deal offers Menzies Aviation the opportunity to enter the growing Pakistan aviation services market as the acquisition creates a strong platform for the company. It [acquisition] represents clear delivery against the company’s strategic objectives of increasing depth of service capability and expanding its geographical footprint, the statement added.

“We are delighted to be partnered with Royal Airport Services. The acquisition is in line with our global strategy to offer our service portfolio to new markets and we believe that a presence in Pakistan will provide a strong platform for further regional growth opportunities,” Menzies Aviation’s Executive Chairman Philipp Joeinig said.

Comment by Riaz Haq on December 7, 2020 at 4:11pm

#Pakistan’s Air Sial to launch. It's Pak's 3rd private airline after Airblue & Serene Air. It's a brainchild of members of the Sialkot Chamber of Commerce and Industry which owns #Sialkot International Airport – Pak's first privately-owned public airport https://gn24.ae/ae6cca80e286000

Pakistan’s industrial city of Sialkot, famous for producing the world’s finest quality football and sports goods, will soon have a new reputation – AirSial, its own private airline. Pakistan’s third private airline, AirSial, launched by Sialkot’s business community, is all set to launch operations this month. Prime Minister Imran Khan is expected to formally launch the new airline on December 9 in Sialkot.

Pakistani startup airline AirSial this week received its second aircraft, Airbus A320, at Sialkot Airport. The airline’s initial operations will rely on three Airbus A320-200s, which the airline has leased from AerCap, Dublin-based aircraft leasing giant. It will initially begin operations with regular flights between Karachi, Islamabad, Lahore, Sialkot and Peshawar. The airline hopes to embark on the international journey in two years with the Middle East as the first region and UAE the most preferred choice for airline’s first overseas service, aviation experts say.

AirSial that aims to “become the leading airline of the region” is the brainchild of members of the Sialkot Chamber of Commerce and Industry after the successful launch of Sialkot International Airport – the first privately-owned public airport. The airport project, completed in 2007 at a cost of approximately Rs4 billion, was funded by 360 members of the business community. Sialkot city industrialists set a unique precedent to set up an airport to boost trade and business activities and support the city’s exporters and the business community.

Ameen Ahsan, CEO of AirSial, envisages the airline to become an “important multiplier of economic activity” in Pakistan’s national economy. The airline that will give a boost to the aviation sector supports PM Imran Khan’s vision to create jobs, strengthen the economy and contribute to foreign exchange, he said.

Comment by Riaz Haq on March 2, 2021 at 4:19pm

#Pakistan To Have 3 New Domestic Airlines: Q-Airlines, Fly Jinnah and Jet Green, in addition to AirBlue, AirSial and SereneAir. New additions will be a huge boost to Pakistan’s domestic #aviation market with cheaper fares and more seats, https://simpleflying.com/pakistan-new-domestic-airlines/ via @simple_flying

Pakistan’s domestic market is set to receive a significant boost as the country prepares to launch three new airlines. Two of these startups have completed the necessary administrative processes, while the third remains under scrutiny. Subject to a successful first year, the carriers may also go on to operate international services.

Initially limited to domestic operations
As reported earlier by Gulf Today, three airline startups are currently swapping paperwork with the Pakistan Civil Aviation Authority (PCAA). Should they be granted permission to commence scheduled commercial operations, this would double the country’s number of private airlines.

This would be a huge boost to Pakistan’s domestic market. According to ARY News, two of the three airlines have already completed the PCAA’s administrative processes. The names of these startups are Q-Airlines and Fly Jinnah.

Having completed these processes, these two proposed airlines will have their documents forwarded to the government’s Aviation Division. If the federal cabinet grants them approval, they will then be issued with licenses to commence operations. The PCAA requires new airlines to spend their first year operating solely domestic flights with a fleet of three aircraft.


The third new carrier is known as Jet Green Airlines. This startup is a little further behind in the bureaucratic process, and remains under scrutiny from the PCAA. It will hope that its documents will be forwarded to the Aviation Division with minimal further delay, to avoid being left behind by its competitors, which may take to the skies first. After the provisional year-long domestic period, the airlines may be granted permission to operate internationally.

Pakistan already has a further three private airlines up and running. These are as follows.

airblue – Founded in 2003 and commenced operations in June 2004. Operates a 10-aircraft fleet of Airbus A320 family planes. As well as its core network within Pakistan, airblue also has focus cities in Saudi Arabia and the UAE.
SereneAir – Founded in May 2016 and commenced operations in January 2017. Its small fleet (1x Airbus A330, 4x Boeing 737) serves an eight-destination domestic network.
AirSial – Despite being founded in October 2017, AirSial only commenced operations in December. As such, it is still in its year-long probationary period. It currently operates a fleet of just three A320 aircraft between five domestic destinations.

Comment by Riaz Haq on March 10, 2021 at 9:57am

Pakistan - Air transport, passengers carried

https://www.indexmundi.com/facts/pakistan/indicator/IS.AIR.PSGR#:~:....

The value for Air transport, passengers carried in Pakistan was 6,880,637 as of 2018. As the graph below shows, over the past 48 years this indicator reached a maximum value of 9,628,354 in 2016 and a minimum value of 625,200 in 1972.

Definition: Air passengers carried include both domestic and international aircraft passengers of air carriers registered in the country.

Source: International Civil Aviation Organization, Civil Aviation Statistics of the World and ICAO staff estimates.

Comment by Riaz Haq on July 15, 2021 at 5:48pm

#Pakistan's Alvir Airways gets operating license, eyes ERJ (#Brazil-made Embraer regional jets).
It plans to operate from 3 hubs (#Karachi, #Lahore, & #Islamabad) to 3 destinations (#Gwadar, #Skardu, & #Turbat) - to promote #tourism & regional air access. https://www.ch-aviation.com/portal/news/105836-pakistans-alvir-airw...

Pakistani startup Alvir Airways (Karachi Int'l) has been granted a Tourism Promotion and Regional Integration (TPRI) operating license by the Pakistan Civil Aviation Authority (PCAA), according to a statement issued by the regulator.

Under the National Aviation Policy of 2019, the license is valid for five years until June 2026, read the statement issued by PCAA spokesman Saad Bin Ayub.

According to the PCAA, Alvir Airways intends to acquire two unspecified Embraer jets for the startup of operations and will add more of the type in time.

The airline plans to operate from three hubs in Pakistan, namely Karachi Int'l, Lahore Int'l, and Islamabad Quaid-e-Azam Int'l to three destinations - Gwadar, Skardu, and Turbat - to promote tourism and regional air access. Alvir Airways will be pitched against PIA - Pakistan International Airlines (PK, Islamabad Quaid-e-Azam Int'l) which currently holds 100% of the market share in terms of weekly seat capacity at Gwadar, Skardu, and Turbat, according to the ch-aviation capacities module. PIA serves Skardu twice weekly from Faisalabad, daily from Islamabad, 3x weekly from each of Karachi and Lahore, and weekly from Sialkot, the ch-aviation schedules module reveals. PIA also serves Gwadar 4x weekly from Karachi; and Turbat weekly from Islamabad and thrice-weekly from Karachi.

The PCAA said Alvir Airways was granted the license in line with a vision by Prime Minister Imran Khan to promote tourism and regional connectivity. It was presented by PCAA Director-General Khaqan Murtaza and other dignitaries to Alvin Airways Chief Executive Officer Tehseen Awan, Managing Director Syeda Huma Batool, and Chief Operating Officer Shahzaib Mahmood at the regulator's head-office in Karachi on July 12, 2021.

Speaking at the event, Awan said that Alvir Airways would start domestic flights in the first phase before purchasing more aircraft. He said the company aimed to provide employment in the aviation sector and become a major player in the Pakistan aviation industry.

The company has begun recruiting staff on its website, which, however at this stage, gives no further insight into its corporate set-up.

Neither the company, nor Awan were immediately available for comment. Awan currently holds the position of managing director of Vetworld, an animal health company, according to his LinkedIn profile.

Comment by Riaz Haq on July 15, 2021 at 8:24pm

What is a Regional Aircraft and what are the opportunities?
The regional aircraft market continues to be a key growth sector within commercial aviation, contributing significantly to efficiencies in the airline networks and ensuring safe and seamless mobility, while respecting environmental obligations.


https://www.cleansky.eu/regional-aircraft

Regional carriers typically operate aircraft, such as regional jets and turboprops, with a seating capacity ranging from 20 to 130 seats, on short to medium-haul routes. By the end of 2015 the regional aviation world fleet comprised of about 9000 units (4350 turboprop and 4650 regional jet) representing more than 33% of the worldwide commercial fleet and performing over 40% of total commercial flights (and 25% of total flight hours).

In the recent past the annual worldwide traffic served by regional aviation exceeded 700 billion ASK (Available Seat Kilometres). Only in Europe were regional carriers able to offer more than 120 billion ASKs to passengers, with an average distance of 320 NM (about 600 km) and more than 200 million people flew on regional aircraft within the European network.

Regional aviation demonstrated its strongest traffic growth over the last two decades. In the next 20 years regional air traffic is expected to triple at an average yearly rate of 6% (compared to a 5% rate in total commercial aviation), generating a market demand of about 9000 new regional aircraft (with a market value of about € 360 billion, averaging € 18 billion per year).

The regional market is currently led by non-European players, with the exception of turboprop manufacturer ATR (a 50/50 Joint Venture between Leonardo and Airbus Group). For Europe‘s aeronautical industry there‘s a clear and urgent need to invest in developing new technologies in order to recover global leadership.

The integration of innovative and affordable technologies in future aircraft platforms is a key success factor for manufacturers as it increases the appeal and customer benefits, providing a better inflight experience for passengers. Furthermore, airlines derive significant economic advantages from operating modern aircraft which are more efficient, eco-friendly, easier and cost-efficient to manage and maintain, saving money through the reduction of operating costs.

New and improved technologies positively impact all these elements, contributing to a reduction in operating costs through lower fuel burn, reduced maintenance costs, reduced navigation and airport fees as a result of structural weight savings due to innovative aircraft configurations and the use of lighter materials.

All these benefits and economic advantages will be even more evident for regional turboprop aircraft that are typically less expensive to operate than regional jets. Technological enhancements also appeal to passengers who can enjoy a better inflight experience thanks to improved comfort and lower cabin noise levels, and this means less noise in and around airports too.

Clearly, investment in developing new technologies represents a fundamental differentiator for European aeronautic manufacturers in order to maintain or even to increase their competitive advantage against non-European players. Over the coming years, Europe‘s technological leadership will gain an increasingly relevant role and will contribute to a substantial market-share increase in the regional aircraft segment with consequent job creation.

In a future characterised by extensive use of innovative technologies, regional aviation‘s potential market will increase to more than 10,000 units over the 2025-2050 timeframe, and the market-share of a new European regional turboprop program will rise to 30-40% - doubling what it is today.

Comment by Riaz Haq on September 3, 2021 at 7:35am

#Pakistan's Lakson Group, Air Arabia to start a new low-cost #airline. Fly Jinnah will operate as a joint venture using low-cost model of Air Arabia. It'll promote travel & #tourism sector and contribute to the country’s #economic growth and #job creation. https://www.reuters.com/world/middle-east/pakistans-lakson-group-ai...

Pakistan's Lakson Group and Middle Eastern budget carrier Air Arabia (AIRA.DU) said on Friday they would launch a low-cost airline serving domestic and international routes from Pakistan.

The new carrier, Fly Jinnah, will operate as a joint venture between the pair, they said in a statement, adopting the low-cost model operated by Air Arabia.

The statement said the new airline would help Pakistan’s travel and tourism sector and contribute to the country’s economic growth and job creation.

Air Arabia operates from Sharjah and Ras Al Khaimah in the United Arab Emirates, and has similar joint ventures in Abu Dhabi, Egypt, Morocco and Armenia. Its shares are listed on the Dubai Financial Market.

The airline has been pushing ahead to expand in the wake of the coronavirus outbreak last year as low-cost carriers bet on a post-pandemic surge in travel.

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