Open skies policy: As five new airlines plan to enter Pakistan, PIA stands to lose

[Clutch]

How? I have given you a perfect example of privatisation. Efficient public sector will always be more beneficial than privatisation.

"Efficient public sector"... That itself is an oxymoron. No such thing as an efficient public sector... Especially in a capatist open market with intense competition.

 

[Big Tank]

Askari Airline?

@Imran Khan

 

[313ghazi]

"Efficient public sector"... That itself is an oxymoron. No such thing as an efficient public sector... Especially in a capatist open market with intense competition.

Yes there is actually. Some Rail lines in the UK that were put back into public ownership after failed privatisation and the commuters loved it. Cheap fares, reliable service, all run with no burden on the taxpayer

https://www.theguardian.com/uk-news/2013/oct/26/east-coast-mainline-why-privatise

There are loads of examples in the UK and around the world.

https://weownit.org.uk/why-public-ownership/success-stories

 

[bananarepublic]

To those who support the sale of PIA.

Government schools in Pakistan are a failure too. There are many ghost schools where people are taking salaries but neither teacher, nor student has ever been seen. Should we privatise them?

State hospitals in Pakistan are a failure. The awam already takes out loans to seek private treatment. Should we therefore privatise what remains of the health infrastructure?

Pakistan railways is costing the tax payer money whilst providing a poor service. Should we privatise the railway service and infrastructure?

WADPA and K-electric fail to provide energy regularly to the country. Should we privatise the energy market?

---

Britain has done all of these things (apart from the health and education). Today we pay the most for energy in the whole of europe. A train ticket from Manchester to London costs £300. You can get flights to Dubai for the same price. A partly state owned German company privately operates the buses in most UK cities. If 3 of you are travelling it's cheaper to get a taxi than to get the bus.

Fix the public sector, don't sell it. Once it is out of public hands, watch how everyone bend you over.

Actually many government schools in Punjab have been privatized and are being run by private NGOs.

 

[313ghazi]

Actually many government schools in Punjab have been privatized and are being run by private NGOs.

What is your opinion about that?

 

[bananarepublic]

What is your opinion about that?

Mmm. With the current conditions of the education system in Punjab i.e deserted school this could be a step in those deserted schools to be utilized. We should remember that improve education is one step at a time.
Buy i stil have doubts as most of these schools are being run by foriegn NGOs and most foreign NGOs are dysfunctional in their field of work.

 

[Viking 63]

RIP = PIA, thank god for that !!

 

[!eon]

PIA has been in the dumps for longer than yesterday. It has been in a decline since the early 1990s. It is too late in the game to try to save it. Time to hit the reset button and sell the white elephant.

Whole country needs a reset button
Make it a US state or Chinese province, whoever places higher bid

 

[Clutch]

So if privatising one failed service is the answer, then why not everything?

Yes!... Especially privitise the enterprises that compete with the open martek

Whole country needs a reset button
Make it a US state or Chinese province, whoever places higher bid

Sure... But starting with PIA is still a start.

 

[Nike]

Open skies policy: As five new airlines plan to enter Pakistan, PIA stands to lose

New carriers will enter country’s market in next one year, fly mainly to far-off areas
By USMAN HANIF
Jan.29,2018
KARACHI: Five new airlines are expected to venture into Pakistan’s aviation industry in the next one year in the latest sign of intensifying competition in the backdrop of an open skies policy, which may bring down passenger fares, but will pose fresh challenges to the financially struggling Pakistan International Airlines (PIA).

Askari Air, Air Siyal, Go Green, Liberty Air and Afeef Zara Airways are going to enter Pakistan’s air space in a bid to take a slice of the growing air travel market.

“Air traffic of the country has swelled 40% over the past five years to 20 million passengers,” Standard Chartered Pakistan Chief Executive Officer Shahzad Dada said at the recent launch of the Emirates Standard Chartered Credit Card.

PIA online booking system revived after hours of suspension

The current rate of growth in Pakistan’s aviation industry is expected to be around 9% per annum which could continue till 2020, according to a forecast of the International Air Transport Association (IATA) – a trade body of world’s airlines.

“These numbers tell us the open skies policy has proved favourable for the country and its people,” remarked Muhammad Afsar Malik, former additional director of the Civil Aviation Authority (CAA), who was believed to have played a key role in framing the National Aviation Policy 2015.

Most of the upcoming carriers will target low-profit, far-off destinations like Gwadar, Turbat, Panjgur, Khuzdar, Dalbandin, Zhob, Rawalakot, Skardu, Chitral, Gilgit, Bannu, Parachinar and Muzaffarabad.

Of these, Gwadar, Gilgit-Baltistan and Turbat could generate immediate profits because of their tourism potential and work on China-Pakistan Economic Corridor (CPEC) projects.

For these remote regions, the new carriers will bring airplanes suitable for small airports.

National flag carrier PIA has thus far taken advantage of these routes as it is the only player catering to air travel needs of these areas. PIA, which once helped Emirates airline of the UAE by giving two aircraft with crew, is now beset with financial trouble with losses going beyond Rs300 billion.

According to Malik, Pakistan’s domestic air traffic has grown 10%, which is six percentage points higher than the 4% expansion in international air traffic.

Although Pakistan’s market size is increasing, the share of domestic airlines is contracting. They carried 42% of the passengers in financial year 2016-17 as opposed to the 58% flown by international airlines.

“Airlines are in the race to attract customers through fare reduction; had the market not been free, the air ticket you got for Rs10,000 would have cost around Rs30,000,” said Malik. “Competition is good for public service.”

However, PIA does not seem to be buying the idea.

“Private airlines, especially foreign carriers, have mainly resorted to price cuts, instead of going more towards customer satisfaction in terms of comfort and improved services,” commented PIA spokesperson in an email response to a query.

Separately, a Shaheen Air spokesman said in an email “about every player in the aviation chain including airports, airplane manufacturers, jet engine makers, travel agents and service companies turn in healthy profits. Yet, it is one of the enduring ironies that companies that actually move passengers from one place to another, which are a crucial link in the chain, struggle to achieve break even.”

He suggested that the government should revisit its open skies policy as foreign carriers could enter Pakistan’s market without any restriction. “Authorities should devise a new concept called a fair skies policy whereby local carriers along with foreign ones have a fair share in the market,” he said.

The industry did not oppose market liberalisation, but it should be designed in such a way that industry players were not hurt as they were already operating at a low profit margin of less than 3%, he said. “The industry, including PIA, is producing a combined net loss annually.”

UAE’s Emirates and Etihad Airways as well as Qatar Airways among other Gulf carriers are giving a tough time to Pakistan’s domestic airlines, which believe it is hard to compete with these foreign carriers since they are state-funded or operated.

“Even American air carriers are complaining against the Middle Eastern airlines, but the point is that the customer is getting benefits and the market is growing; all depends on the lens through which you see the situation,” remarked Malik.

Defending the open skies policy, he pointed out that the entire world was following the policy and cited the example of Europe that started opening its aviation market in 1978 and got due results. Multan is a good example to gauge the policy outcome since its traffic growth has become five times higher compared to what was before the introduction of the open skies policy.

At least, six foreign airlines are flying to Multan. Now, local businessmen do not need to travel to other cities to take a flight and perishable goods are easily exported.

Airlines’ fleet

PIA, which once had 48 aircraft in its fleet, saw the number shrink to only 18 later. Now again, the fleet has gone up to 35.

“PIA is not an airline, instead it is an employment bureau for political parties which place their workers there to win votes,” remarked Yahya Polani, ex-chairman of the Travel Agents Association of Pakistan.

Shaheen Air and airblue have about 22 aircraft each, but they have only about 2,000 staff members compared to PIA’s more than 15,000.

PIA has a ratio of 450 employees per aircraft while Emirates has 150 employees per aircraft. “Who is going to win; so the open skies policy is the need of the hour,” said Polani.

Over 600 PIA flights disrupted in two weeks due to smog

Thailand, Turkey, Malaysia and Dubai have a combined population of 250 million and have more than 1,000 aircraft in total while Pakistan has a populace of around 210 million, but its airlines have a total fleet of only about 80 aircraft.

“It is obvious that we will face big challenges when these foreign airlines enter our market, but the good thing is that intense competition is customer-friendly, which is the goal,” Polani said. He suggested that Pakistan could grow its air traffic with the help of tourism as Malaysia earned $28-$30 billion by drawing tourists, Thailand hosted 33 million foreigners and earned $48 billion and Indonesia hosted 1.5 million tourists.

Pakistan does not even attract one million tourists, though the country has great places of attraction.

The writer is a staff correspondent





Published in The Express Tribune, January 29th, 2018.

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Indonesia got more than 14 million foreign tourist in 2014

 

[DJ_Viper]

Open skies policy: As five new airlines plan to enter Pakistan, PIA stands to lose

Good businesses don't lose. They "compete". This only means that if the PIA wants to remain in business, they have to take better care of their customers and have newer / better equipment in place, with better fare cost. Good for Pakistani consumer to have options.

 

[AZADPAKISTAN2009]

Pakistani State controled assets have been underperforming or been stale , because of neglect during Nawaz Sharif's goverment time.

Under Musharaf's time these assets were back to almost normal capacity

Between 2009-2018 these assets again were left in ruble becasue these entities are heavily audited and people can't take a "CUT" or bribe

Just bad management

Nawaz Sharif himself is not a Honest broker because he has always resented state control over industrial sector , and has always attempted to either fail these assets till state authorities agree to see it to his political collegues


Opening airways to third party airlines again has no planning involved all the moves are setup to permenently cripple PIA

 

[kaykay]

Ain't employees are way way more? Here in India we have an airlines called IndiGo with 150+ aircrafts but employees are around 13000-14000 only.

 

[Lucky Breeze]

Government should stay away from doing business, its just a call for corruption and mismanagement. And its good that other companies are starting their business. Competition in business is always good for consumers, forced monopoly always deter the consumer rights.

Well,
Musharraf time was good. I miss CD stars of baybus kalyan, pani garam badan narm,
Democracy atay he real estate or ab CNG station ka charm bhi khatam ho gya. Really dark times are on us.

Ain't employees are way way more? Here in India we have an airlines called IndiGo with 150+ aircrafts but employees are around 13000-14000 only.

Yes, previous government recruit too many people on political bases in all state owned corporations.

 

[Rank]

A country where Toyota, Honda and Suzuki every year paying bhatta to govt for not allowing any other vehie manufacturer in the country, 5 more airlines are coming amazing... clearly evident who own these airlines and why they’re coming..