Thursday, April 9, 2015

IATA Says Pakistan Among Fastest Growing Domestic Air Travel Markets

IATA (International Air Transport Association) forecasts Pakistan domestic air travel will grow at least 9.5% per year, more than 2X faster than the world average annual growth rate of 4.1% over the next 20 years. The Indian and Brazilian domestic markets will grow at 6.9% and 5.4% respectively.

Source: CAA Via Express Tribune 

In a clear sign of Pakistan's rising middle class choosing air travel,  the number of domestic and international air travelers in Pakistan grew by 8% to 17.9 million in fiscal year 2013-14 compared to previous year, recording the fastest growth in passenger traffic in the last three years, according to data provided by the Civil Aviation Authority (CAA) and published by Pakistan's Express Tribune newspaper. Growth in air travel is pushing new airport upgrades and new construction to handle more passengers. Examples of new or upgraded airports include Islamabad, Multan and Sialkot.

Chinese domestic air travel market will surpass the US market to claim the number 1 spot by 2030, according to figures released by by IATA. Currently the ninth largest market, India will see a total of 367 million passengers by 2034, an extra 266 million annual passengers compared to today. It will overtake the United Kingdom (148 million extra passengers, total market 337 million) to become the 3rd largest market around 2031.

Pakistan International Airlines, the nation's state-owned carrier, is continuing to lose both market share and money in the midst of explosive growth in air travel. Pakistan's private carriers Shaheen, Air Blue and Indus Air and foreign carriers like Emirates and Saudia have benefited at the expense of PIA.

"It is an exciting prospect to think that in the next 20 years more than twice as many passengers as today will have the chance to fly. Air connectivity on this scale will help transform economic opportunities for millions of people," IATA chief Tony Tyler said in his comments on the report. In 20 years' time, "we can expect aviation to be supporting around 105 million jobs and USD six trillion in GDP," he said.

Sensing the opportunity, the government of Pakistan has recently announced a new national aviation policy, NAP 2015, to attract new investments in the aviation sector. It reduces or eliminates a number taxes and duties on investments.  Announcing the policy, Prime Minister Nawaz Sharif said: “The present taxes and duties on the aviation sector are unjustified, and a major hurdle in the growth of travel and cargo handling through air.”

The NAP 2015 offers a bilateral “Open Skies Policy” to other countries, based on reciprocity; a level playing field for domestic and national airlines, and the liberalized aviation sector by allowing markets to determine the price, quality, frequency and range of air services options; and taxes structured and simplified in line with the best international practices to promote transportation,  spur GDP growth and create jobs.

It's good to see that the aviation sector in Pakistan is finally beginning to get the attention it deserves as a growth market to increase investment, improve service to travelers and create new jobs.


Related Links:

Haq's Musings

Pakistan's Middle Class Grows to 55% of Population

Saving PIA, Education and Railway

E-Commerce Growth in Pakistan

Pakistan's Official GDP Figures Ignore Booming FMCG Sector

Musharraf Accelerated Human and Economic Development in Pakistan

Pakistan's Growing Middle Class

Pakistan's GDP Grossly Under-estimated; Shares Highly Undervalued

Fast Moving Consumer Goods Sector in Pakistan

3G-4G Roll-out in Pakistan



Mobile Money Revolution in Pakistan

41 comments:

Monis R. said...

This is very evident by just looking at the airport rush. Traveling through Lahore airport now feels like hajj! The motorcycle data proxy is a really good one for middle class growth also because a significant percentage upgrade to cars within five years. Need to dig that up.

Singh said...

It shows the absence of a robust railway network in a small country like Pakistan (geographically) which would have boosted the domestic economy !!!

Riaz Haq said...

Singh: "It shows the absence of a robust railway network in a small country like Pakistan (geographically) which would have boosted the domestic economy !!!"

Pakistan is geographically small? What a revelation. 1600 Km from Karachi to Peshawar is small? 1300 Km from Karachi to Lahore is small? 700 Km from Karachi to Quetta is small? How long would bus or train take to cover this distance? Do you think professionals and businessmen have a lot of spare time?

S. Qureshi said...


PM orders to upgrade Faisalabad Airport within 90 days in order to enable direct international flights to and from the city. Qatar Airways had announced to start a Faisalabad-Doha flight from July 17, 2015.
http://goo.gl/aVh0S6

Also, Ecnec approved Rs26.59B for new Gwadar Airport project.
http://goo.gl/bxZ9RY

S Qureshi said...

An international airport has been planned for Mirpur, Azad Kashmir. In August 2013 the national assembly and the prime minister approved confirmation of the airport. It was determined that the airport would be constructed in two years after funding had been made. http://goo.gl/3vSyfg

Pervez Ali Ahmed said...

Nice. But someone should ease the travel restrictions between India and Pakistan. I really want to go to Lahore to see the beautiful city.

Pervez Ali Ahmed said...

Has the railways improved? I do not know much about Pakistani railways. Some articles say that though Pakistani railways is nothing compared to our Indian Railways, their waterways are awesome.

Suhail H. said...

No doubt Pakistan's air travel would be growing much faster because railway and road travel is fast diminishing unlike other countries. Pakistan has no faster trains than 50 years ago, whereas all other countries referenced in your article would have modernized their railways.
Roads in Pakistan are increasingly dilapidated and with security issues people avoid long distance road travel, unlike other countries where road travel would be increasing.
In order for a realistic analysis, you should include growth figures of all travel options. As a thumb rule, whenever you see Pakistani figures well ahead of international, you need to pause, reflect and analyze critically rather than happily go ahead and publish.
Middle classes have no option but to adopt air travel, which is usually for their essential needs, and is increasingly getting hard pressed to make ends meet. The growth or plight of middle classes is a separate issue needing a different set of parameters.

Riaz Haq said...

Suhail: "No doubt Pakistan's air travel would be growing much faster because railway and road travel is fast diminishing unlike other countries."

Explosion of air travel is an indication that Pakistan is going through what the developed world went through a couple of decades ago with rapid expansion in middle class and deregulation of airline industry.

Air travel offers cheaper, faster and safer option for traveling long distances like Karachi-Lahore (1300 Km), Karachi-Islamabad (1500Km) At the same time, road network has been expanding rapidly and as are the bus services like Daewoo bus service for shorter distances and for those who have more time to travel.

All this is part of the trend in transportation: More efficient private sector (bus and air travel) doing what the public sector (trains) used to do everywhere around the world. Even the freight has moved off the trains to the roads and the skies with the growth of online commerce.

Daewoo alone owns a fleet of 380 buses that serves over 50 cities and 6 million passengers every year. It also employs over 4,000 workers, 12 percent of whom are women, and IFC’s investment will help Daewoo Express create more jobs as it expands its operations.

Niazi Express is another bus service that has a fleet of over 200 buses serving 20+ destinations.

Admi said...

I frequently travel by ICE (fastest train in Germany, express speed 300km/hr) and by air.
Hamburg to Munich 800km takes 6hrs. While flight takes only 1:15hr, and the airfare is not costlier very often.

Riaz Haq said...

World Bank and ICAO data shows domestic passenger traffic in Pakistan grew 20% over three years from 2010 (6.5 million) to 2013 (7.8 million).

http://data.worldbank.org/indicator/IS.AIR.PSGR

Majumdar said...

Prof sb,

The WB data table that you have quoted shows that India's air travel has gone up from 64 mio to 75 mio in the same period. Which means that India's air travel population is 9.5 X times Pakiland while population ratio is 7.0 times.

Regards

Riaz Haq said...

Majumdar: "Which means that India's air travel population is 9.5 X times Pakiland while population ratio is 7.0 times. "

Yes, that is today. The IATA forecast I have shared is for growth over next 20 years.

http://www.iata.org/pressroom/pr/Pages/2014-10-16-01.aspx

Bubba said...

Aviation sector handlers should look into the insane prices of domestic air travel ! No where in the world people pay 12k-17k for a 1 hr 45 minutes domestic flight but it's there in our beloved country

Riaz Haq said...

Bubba: "Aviation sector handlers should look into the insane prices of domestic air travel ! No where in the world people pay 12k-17k for a 1 hr 45 minutes domestic flight but it's there in our beloved country"


Not true. Americans routinely pay more than $150 for one and half hour domestic flights.

Bubba said...

for someone in the US earning 1500 USD/ month ; buying a 150$ ticket is relatively more easier than the one who is earning just 50k in pakistan to afford a 15k domestic flight ticket

Riaz Haq said...

Bubba: "for someone in the US earning 1500 USD/ month ; buying a 150$ ticket is relatively more easier than the one who is earning just 50k in pakistan to afford a 15k domestic flight ticket"

The biggest expense of operating airlines is fuel which costs the same. Labor is next and yes, it's cheaper in Pakistan....so the airlines in Pakistan can be more profitable and Pakistani private airlines (not PIA) do make good profits.

Majumdar said...

Prof sb,

Although fuel costs are the same there are some issues. First, in India taxes are much higher on ATF as it is perceived to be a "luxury" product, dunno whether it is true of Pakiland.

Second issue is that air infra if often poorer in India (again not sure whether applicable to Pakiland), so congestion leads to greater airtime for planes compared to the West which worsens fuel economy.

Perhaps you can throw some light on fuel taxation and congestion issues in pakiland.

Finally, in both countries capital costs are much higher.

Regards

Riaz Haq said...

Air Arabia announced today that the city of Multan in Pakistan will join its route network next month, bringing the total number of destinations in the country served by the region’s first and largest low-cost carrier to six.

Located on the banks of the Chenab River, Multan is home to more than three million people and is Pakistan’s fifth largest city. It is an important cultural and commercial centre with a strong economy largely based on industry and agriculture.

Multan joins Karachi, Peshawar, Sialkot, Lahor and Islamabad as Pakistani cities served by regular direct Air Arabia flights from Sharjah and Ras Al Khaimah International Airports.

Adel A. Ali, Group Chief Executive Officer of Air Arabia, said: “With a population of more than 180 million and within just a few hours flight time from the UAE, Pakistan has always been a promising market for Air Arabia. We have established a comprehensive network of destinations spanning the country and brought Air Arabia’s value for money proposition within easy reach of millions of people flying between the UAE and Pakistan. We look forward to further investing in increasing our reach in Pakistan by offering more destinations and flights in the near future.”

Starting May 1, 2015, Air Arabia will operate services to Multan on Sundays, Mondays, Wednesdays and Fridays. Flights will depart Sharjah International Airport at 04:45 and land in Pakistan at 08:20. Return flights will operate on the same days, leaving Multan International Airport at 09:00 before arriving in Sharjah at 10:50. Local Time.

2015 has witnessed a number of significant additions to the Air Arabia network. In January, it was the first low-cost airline from the Middle East and Africa to enter the Chinese market with the launch of services to Urumqi, the largest city in Western China. The carrier also added Isfahan and Sanandaj in Iran and Gizan in Saudi Arabia in the first quarter of the year, as well increased the frequency of services on a number of existing routes.

http://www.airarabia.com/en/multan-joins-air-arabia%E2%80%99s-expanding-pakistan-network#.VSm2qpTF_3o

Riaz Haq said...

The government sold its entire stake in the country’s largest private-sector bank for $1.02 billion Saturday, the biggest so far in a series of divestitures planned to help revive Pakistan’s economy.

The government approved a strike price of 168 Pakistani rupees, about $1.68, per share, for its 41.5% stake, or 609 million shares, in Habib Bank Ltd. on Saturday, compared with the floor price of 166 rupees, or $1.66, set at the start of book-building, which began Tuesday.

Pakistan’s privatization minister Mohammad Zubair said the stake was “heavily oversubscribed,” with offers worth $1.6 billion for 955 million shares, of which $1.2 billion was offered by foreign investors.

“This is by far the largest in Pakistan’s history, the demand that we got,” Mr. Zubair said. “It’s also the largest for any Asian frontier market country.”

Of the $1.02 billion raised, the finance ministry said $764 million was foreign investment.

“The bulk of this money, $764 million dollars [from international investors], will boost foreign exchange reserves, which will stabilize the currency further, which in turn will have a positive impact on inflation,” Mr. Zubair said.

Pakistan had $16.7 billion in total liquid foreign exchange reserves as of April 3, according to the central bank.

Prime Minister Nawaz Sharif’s government has made privatization and divestitures from as many as 31 state enterprises major components of its plan to boost Pakistan’s economy, especially its foreign exchange reserves. Mr. Sharif’s government has already sold shares in United Bank, Allied Bank and energy company Pakistan Petroleum Ltd. A plan to sell a portion of the government’s stake in the Oil and Gas Development Co. Ltd., the country’s largest oil and gas business, for $800 million was abandoned in November because of poor investor demand.

The sale of the government’s Habib Bank stake is Pakistan’s largest capital market transaction in a decade, officials said. The government is currently working on the privatization of Pakistan International Airlines, Pakistan Steel Mills and several power distribution companies, finance ministry and privatization commission officials said.

Brokers and analysts said interest in the Habib Bank shares was boosted by strong participation by foreign investors.

“The response was far better than earlier expected. Nobody expected that it could cross a billion dollars,” said Mohammed Sohail, chief executive of Topline Securities, a brokerage based in Karachi, Pakistan. “Investors globally are looking at Pakistan positively, especially because of the gradual economic recovery over the last two years.”

Habib Bank has Pakistan’s largest deposit base and the most extensive network of branches. It has operations in 29 countries, according to the bank’s website. The Aga Khan Fund for Economic Development bought a 51% stake in the bank when it was privatized in 2004.

http://www.wsj.com/articles/pakistan-gets-1-02-billion-for-habib-bank-stake-1428763658

Riaz Haq said...

THOSE in search of a thriving stockmarket, a stable currency and low inflation would not normally pitch up in Pakistan. It is more readily thought of as a pit of instability than as a source of opportunity. Yet Pakistan is enjoying a rare period of optimism about its economy.

The IMF reckons that the economy will grow by 4.7% next year, the fastest rate in eight years. Consumer prices rose by 2.5% in the year to March, the smallest increase for more than a decade. Twice already this year the central bank has lowered its benchmark interest rate. Some indicators are pointing to an upturn in spending. Compared with a year earlier, cement sales, which are a guide to how much construction is taking place, rose by 5.5% from July to March. Car sales rose by 22% over the same period.

A fall of two-fifths in the oil price is a huge slice of luck for a country such as Pakistan. It relies on imported fuel oil for two-fifths of its power supply and is prone to periodic balance-of-payments crises (see chart). The country’s import bill can easily overwhelm the foreign-exchange earnings from textile exports and the remittances that Pakistanis working in the Middle East and Europe send home. In 2013-14 Pakistan’s net import bill for oil came to $12.6 billion, or around 5% of GDP. But if oil prices stay low, Pakistan could save a total of $12 billion in the next three years, says the IMF. The money could be spent on things with more local content and give the economy a lift.

The government of Nawaz Sharif takes some credit for the economy’s new stability. It has stuck to an IMF programme agreed to in 2013, a few months after it came to power in Pakistan’s first-ever handover from one civilian government to another. Foreign-exchange reserves have more than doubled, to $17.7 billion. Electricity tariffs have been raised, and some unpaid bills collected, easing the cash burden on hard-pressed distribution companies. Tax receipts have risen, albeit from pitiful levels, in response to efforts to broaden the base and cut exemptions. The revenue agency has sent over 150,000 tax notices to non-payers. More retailers are being drawn into the indirect-tax net. A draft budget aims to bring the budget deficit below 4% of GDP in 2015-16, from a peak of over 8%.

A privatisation drive that stalled last June resumed in April, when the government sold its stake in Habib Bank, the country’s largest lender, for $1 billion. Three-quarters of bids came from foreign investors. Pakistan’s stockmarket has doubled in dollar terms since the start of 2012, thanks in large part to such foreign interest. Privatisations will only add to the market’s variety and appeal. Listed companies are highly profitable, although in part because they often face too little competition.

Visitors to Pakistan are surprised to discover good roads and a strong business culture. The country is mid-table in the World Bank’s ease-of-doing-business rankings, well above India. The infrastructure is solid enough to support big fast-food chains: McDonald’s, KFC, Pizza Hut and Subway have 187 outlets between them, more than in all of Sub-Saharan Africa’s “frontier” economies combined, says Daniel Salter, of Renaissance Capital, a stockbrokers.

The progress in providing economic stability is encouraging. But Pakistan needs sustained growth of 5-7% a year if it is markedly to cut poverty—at the last count, nearly a quarter of Pakistanis were below the poverty line. There are doubts to whether Mr Sharif has the strength and authority to implement deeper reforms. Despite a better electricity industry, power shortages remain a bugbear. Big firms in textiles, which account for over half of Pakistan’s exports, have long taken to generating their own electricity.


http://www.economist.com/news/asia/21650175-lower-oil-prices-prove-be-boon-fuel-injection

Riaz Haq said...

UAE’s budget carrier Air Arabia has added Pakistani city of Quetta to its list of destinations, making it the Sharjah-based carrier’s seventh destination in Pakistan.

“We now have seven of Pakistan's biggest cities covered with direct services from two airports in the UAE and we hope to add more in the future as part of our ongoing commitment to serve the country,” said Adel A. Ali, Group CEO of Air Arabia.

Quetta services will commence on Wednesday, June 17, 2015.

Quetta joins Karachi, Peshawar, Sialkot, Lahore, Islamabad and Multan as Pakistani cities served by direct Air Arabia flights from Sharjah and Ras Al Khaimah airports.

On May 21, another UAE carrier, Flydubai, announced direct flights to Quetta in Pakistan from June 11, 2015, with three flights a week.

http://www.emirates247.com/business/corporate/air-arabia-expands-pakistan-service-2015-05-31-1.592330

Riaz Haq said...

The UAE has updated air service agreement with Pakistan allowing open skies approach on new points in Pakistan including Quetta, Turbat, Gwadar, Panjgur as well as increased passenger capacity to Karachi, Faisalabad, Multan and Sialkot.

The two-day negotiations between both parties resulted in signing an updated air service agreement between Pakistan and the UAE. Saif Mohammed Al Suwaidi, director-general, General Civil Aviation Authority (GCAA), signed the agreement on behalf of UAE while Amjad Ali Toor, additional secretary for aviation division, signed on behalf of Pakistan. The signing ceremony was also attended by UAE ambassador to Pakistan Isa Basha Al Noaimi, Khaleej Times reported. Al Suwaidi stressed the importance of this updated agreement which will contribute to boost trade, tourism and investment between UAE and Pakistan.

During his visit, Al Suwaidi toured the new airport in Islamabad which will be inaugurated in the second half on 2016 with a capacity to handle 50 million passengers.

Ms Laila Ali bin Hareb Al Muhairi, assistant of director-general of strategy and international affair at GCAA, said that UAE ranks second internationally in term of open skies agreements.

“UAE is driven more than ever to continue its international collaboration in air transport and shall continue its far-reaching and sound advances toward opening and liberating skies with countries of the world,” she added.

http://www.dailytimes.com.pk/national/05-Jun-2015/uae-updates-air-service-agreement-with-pakistan

Riaz Haq said...

#UAE's Air Arabia set to expand flights to #Pakistan. New flights to #Quetta, #Faisalabad added. http://www.arabianbusiness.com/uae-s-air-arabia-set-expand-flights-pakistan-594938.html#.VXcoIF8jadx.twitter

UAE-based Air Arabia has named Faisalabad as the latest city to join its rapidly growing Pakistan route network.
When flights to the country's third largest city start in October, Faisalabad will join Islamabad, Karachi, Lahore, Multan, Peshawar, Quetta and Sialkot as Pakistani cities served from the UAE by the low-cost carrier.
Faisalabad is a city of more than two million people located in the province of Punjab. A major centre of industry and manufacturing, the city is estimated to contribute approximately one fifth of Pakistan's total GDP.
"Air Arabia has a long-standing commitment to serve the Pakistan market and we are proud to operate an exceptionally comprehensive route network covering the length and breadth of the country," said Adel A Ali, Group CEO of Air Arabia.

Riaz Haq said...

Having secured additional rights of operations from the Pakistani government, Dubai-based international airline, Emirates, is all set to deprive the domestic carriers, including Pakistan International Airlines, Shaheen Airlines and Air Blue, of their share in the industry.

Emirates, which started its operations in March 1985 after getting two planes from Pakistan International Airlines (PIA), now operates in 78 countries with 3,300 flights per week.

Recently, the Civil Aviation Authority (CAA) has given it additional rights to operate in Quetta, Panjgur, Turbat and Gwadar, diverting the local passengers from the national carriers to Emirates for direct flights to Dubai and other countries of the world.

“This is a big loss to the Pakistani airlines including Shaheen and PIA as the passengers of these cities were using services of national carriers. Three American airlines are fighting against Emirates’ operations in USA, but the Pakistani government was giving more and more rights to Emirates. This is not fair,” said a PIA official.

“On the other hand, the government has been trying to privatise PIA for the last several years. Is the government trying to sell off the country to foreigners or what? How are the domestic stakeholders supposed to flourish if the government keeps on facilitating international companies?” he questioned.

According to CAA, on June 5, 2015, Bilateral Air Services Agreement talks between Pakistan and United Arab Emirates were held in Islamabad. The talks were held in a friendly and cordial atmosphere regarding all outstanding issues.

Landmark changes in the new agreement include opening up four airports of Balochistan; Quetta, Panjgur, Turbat, and Gwadar, to five airlines of UAE for unlimited operations, a CAA official said, adding that this will facilitate the citizens of these districts to fly abroad directly from their hometowns.

However, the CAA official said that traffic rights to the airlines of UAE for Lahore, Islamabad and Peshawar have been frozen at the current level for the time being due to infrastructural constraints at these airports. For Karachi, the open skies arrangements between Dubai and Karachi concluded in 1998 remains intact.

“Pakistani airlines, on the other hand, will enjoy unlimited traffic rights from all airports of Pakistan to all airports of UAE. Our airlines would also be free to operate beyond UAE to any other country of the world,” he added.

“The additional services to Karachi and the introduction of Multan to our network will position Pakistan as Emirates’ fourth most highly served country worldwide with 80 return flights a week operating between Dubai and Pakistan,” said West Asia and Indian Ocean Commercial Operations Senior Vice President Ahmed Khoory.

Moreover, the three big US airlines – Delta Air Lines, United Continental Holdings and American Airlines Group – alleged that Emirates, Etihad, and Qatar airlines received more than $42 billion in “unfair subsidies” from the Gulf government. As a result, the Gulf carriers are able to take the US airlines’ market by offering cheap flight fares, which does not make economic sense.

However, the three Gulf airlines completely denied all the allegations. The US airlines also requested the United States government to review the Open Skies agreement, through which Gulf carriers operate in US.

Emirates President Tim Clark told reports on the sidelines of an International Air Transport Authority (IATA) meeting that the airline will submit a detailed report to the US government in response to US airlines’ accusation that it was one of the carriers receiving unfair subsidies from the Gulf government. Earlier last week, Etihad also submitted a 60-page report to the US government to counter the US airlines’ allegation.

http://www.pakistantoday.com.pk/2015/06/15/business/emirates-eating-up-local-carriers-birth-right/

Riaz Haq said...

#PIA starts A320 jet flights to #SKARDU in beautiful Gilgit-Baltistan #Pakistan http://www.dawn.com/news/1189453

In an attempt to promote tourism in country's scenic northern region, the Pakistan International Airlines (PIA) has included an A320 plane on its route to Skardu, the central valley of Gilgit-Baltistan region, said a press release issued by the airlines.

The A320 jet departed for its inaugural flight to Skardu from Islamabad airport.

"The flight carrying over 100 passengers departed from Islamabad and landed at Skardu Airport", the press release said.

The plane carried PIA's retro livery from the 1960s, a part of its 60th anniversary celebrations this year.

Previously smaller aircraft such as Fokkers, ATRs and B737s linked Islamabad with Skardu.

A ceremony was held at Skardu airport which was attended by Skardu residents to welcome the new A320 service.

According to the press release, the A320 has a much larger seating capacity and would cater to the needs of not only local population but also of tourists.

The scenic natural beauty and views of some of the world’s highest peaks attract many tourists to Skardu.

Special Assistant to Prime Minister on Aviation Shujaat Azeem, who was also among the passengers, remarked, "This will further facilitate tourism and economic improvement of the region towards realising the vision of the present government."

He said PIA will now operate daily flights between Skardu and Islamabad connecting the northern areas with the major cities of Pakistan

Riaz Haq said...

Qatar Airways announced that it has launched services in two more cities of Pakistan namely Sialkot and Faisalabad on consecutive days.

The airline started four weekly passenger services to Sialkot on July 16 and a day later announced that it would also commence three weekly flights to Faisalabad.

Read: Qatar Airways named Skytrax’s world’s best airline of 2015

Qatar Airways Cargo had already been operating a direct freight service to Sialkot since 2008 because of the high volume of products, especially textiles, being exported from the city.

Further, the airline has announced that in a few weeks Multan will also join its Pakistan network with three flights a week starting from August 2. Qatar Airways already has Karachi, Lahore, Islamabad, and Peshawar on its list of destinations.

“Qatar Airways has a long-standing commitment to serve Pakistan and we are delighted to operate an exceptionally comprehensive route network covering the length and breadth of the country,” said Qatar Airways Group Chief Executive Akbar Al Baker.

“There are a significant number of Pakistani expatriates who are working in Qatar and the GCC. The launch of these new destinations will enable us to quickly meet the growing demand of these travellers,” he added.

Read: Qatar Airways boss denies ‘subsidy’ claims

On the two new destinations, Sialkot and Faisalabad, the airline has decided to operate an Airbus A320 in a two-class configuration of up to 12 seats in Business Class and up to 132 in Economy Class.

Qatar Airways currently flies 45 times a week to four cities of Pakistan, with double daily flights to Karachi, Lahore and Islamabad, and three weekly flights to Peshawar. Karachi was the first city in Pakistan where the airline launched its services in 1995, followed by Peshawar in 1998, Lahore in 1999 and Islamabad in 2004.

The airline currently operates a modern fleet of 162 aircraft, and with four new destinations (Multan, Abha, Ras Al Khaimah and Durban) soon to be launched, it will increase its global portfolio to 154 destinations across Europe, Asia Pacific, the Middle East, Africa, North America and South America.

http://tribune.com.pk/story/924264/qatar-airways-launches-services-in-two-more-pakistani-cities/

Riaz Haq said...

After building privately-funded airport, #Sialkot exporters to launch privately-funded airline #Pakistan http://www.dawn.com/news/1198704

Local exporters have decided to launch a private airline with the collaboration of the Sialkot International Airport Limited (SIAL).

Sialkot Chamber of Commerce and Industry (SCCI) President Fazal Jilani told newsmen here on Wednesday that the airline – Sialkot International Airline – would be formally launched within the next two weeks.

He said it would be another mega project by the local businessmen after the establishment of the airport.

http://www.dawn.com/news/1198704

Riaz Haq said...

State-owned airline Pakistan International Airlines’ (PIA) privatization plans have been postponed until mid-2016, following what the government described as “legal obstacles in finalizing the transaction structure.”

In 2014, the Pakistan government agreed to a sell off parts of various strategic state-owned assets, including power corporations and steelmakers as well as PIA. The move to divest corporations was a condition of a $6.7 billion loan deal with the International Monetary Fund made in 2013.

Pakistan Minister of State for Privatization Mohammad Zubair said at the time of the agreement that the sale of PIA would commence in mid-2015. “The process is absolutely on and financial advisers are performing their job, [working on] the Pakistan International Airlines (PIA) sale,” he said.

In 2014, Pakistan’s Prime Minister Nawaz Sharif gave approval for the airline to take five new Boeing 777 aircraft, in addition to an agreement for 13 leased Airbus A320s, of which the fifth was delivered in June 2015.

“With newer versions of fuel-efficient aircraft, the employees will have to put in extra efforts for turning around the corporation [prior to sale],” PIA managing director Shahnawaz Rehman said.

But government intervention and factional delays have pushed the timeline back twice already, with the original deal for a restructuring prior to a 26% IPO sell-off still subject to internal opposition and political wrangling.

In the meantime, the airline is posting continuing losses—in the first quarter, it lost PKR2.1 billion ($206 million) taking its total losses to date to $2.1 billion.

http://atwonline.com/government-affairs/pakistan-international-airlines-privatization-plans-delayed-2016

Riaz Haq said...

Gerry’s Dnata, the largest ground handler in Pakistan, has ramped up its scale of operations in Pakistan with the commencement of its service at three new airports in Pakistan investing over $4 million.

Gerry’s Dnata is a joint venture between Dubai’s Dnata and Gerry’s group in Pakistan.

To support the growth of the aviation industry across Pakistan, Gerry’s Dnata has launched services at Multan International airport (MUX) on May 1, Quetta International (UET) on June 11 and Faisalabad International (LYP) on July 11 this year.

Across the country, Gerry’s Dnata expects to increase its staff count by 140 to accommodate the new services at these locations creating local job opportunities for Pakistanis.

“We have been supporting the aviation industry in Pakistan since 1993,” said Syed Haris Raza, Vice-President of Gerry’s Dnata.

“This expansion will help the industry continue to grow and meet the needs of the travel and cargo communities.”

“The aviation industry in Pakistan continues to grow, and as a trusted partner, our goal is to ensure the smooth handling of flights, passengers, and cargo across the country. Our new locations add cargo capacity, passenger handling capabilities and create new jobs—a good thing for the industry and the economy,” added Raza.

The new airport locations increase Gerry’s footprint to seven airports across Pakistan, including Karachi, Lahore, Islamabad, and Peshawar, and makes it the largest ground handler in Pakistan, now able to welcome over 3 million passengers in and out of these locations every year.


http://www.emirates247.com/business/corporate/dnata-arm-adds-3-new-airports-in-pakistan-to-hire-140-employees-2015-08-18-1.600646

Riaz Haq said...

BEIJING (Online) – Air China on Saturday announced it would launch four new Asian routes in October, connecting Beijing to more destinations in south and southeast Asia.

Flights linking Beijing and Karachi, Pakistan, will launch on Oct. 26 with three flights every week. It will stop in the country’s capital Islamabad.

The Beijing-Mumbai, India, route will be launched on Oct. 25, with four flights every week.

On the same day, flights will also begin connecting Beijing with Kuala Lumpur, Malaysia, with four flights every week.

On Oct. 27, another route linking Beijing with Colombo, Sri Lanka, will begin, with three flights every week.

http://en.dailypakistan.com.pk/business/air-china-to-launch-four-new-asian-routes/

Riaz Haq said...

#Bahrain's Gulf Air plans to launch two new #Pakistan routes. #Multan #Faisalabad http://www.arabianbusiness.com/bahrain-s-gulf-air-plans-launch-two-new-pakistan-routes-608437.html#.Vhc_Xg8NtYG.twitter …

The addition of direct services to the cities of Faisalabad and Multan are scheduled to launch in December, the airline said in a statement.
The airline will operate four weekly direct flights to Multan and three weekly services to Faisalabad, it added.
Ahmed Janahi, chief commercial officer, said: "We are committed to serving the Pakistan market, as we have done since our first entry in 1960.
"Accordingly, we are delighted to supplement our existing operations - catering to passenger demand from across the country.
"I would like to extend our thanks to the Pakistan authorities and Pakistan Civil Aviation Authority for facilitating and supporting this new development that I am confident will be well received by passengers."
The new launches will take the carrier's total number of Pakistan destinations to seven in addition to Karachi, Lahore, Islamabad, Peshawar and Sialkot.
Gulf Air flights to Multan, Pakistan's fifth largest city by population, and Faisalabad, a major industrial and manufacturing hub, will be operated by an Airbus A320 aircraft.
Gulf Air said in August that its year-on-year losses reduced by 30 percent in the first half of 2014.
The airline's revenues increased by 10 percent during the same period, its chairman said in a statement without giving specific figures.

Riaz Haq said...

#Pakistan Tells Pilots ‘Don’t Fly Drunk’. #Shaheen #Lahore #Crash http://on.wsj.com/20RykwE via @WSJIndia

Pakistani aviation authorities have warned domestic carriers to ensure their pilots aren’t flying drunk after the investigation of an accident last week discovered the captain of the flight had elevated blood-alcohol levels.

Amjad Ali Toor, the director-general of Pakistan’s Civil Aviation Authority, said in a statement Thursday that medical tests showed the pilot in command of a Shaheen Air International plane that skidded off a runway in Lahore had an “unacceptable” amount of alcohol in his blood.

There were no fatalities or serious injuries in the accident, which involved a Boeing 737 with 114 passengers and seven crew members aboard. Shaheen Air didn’t respond to repeated requests for comment. Neither the airline nor regulators publicly named the pilot.


Alcohol was banned in Muslim-majority Pakistan in 1977, with some exceptions for non-Muslims, but is still sold illegally by bootleggers across the country.

On Thursday, the aviation authority called an emergency meeting with representatives of all domestic airlines and asked them to conduct “snap medical tests” on their crews.

Aviation officials said they don’t know whether the captain’s alcohol consumption caused or contributed to the Shaheen accident, which is still under investigation. “It may have been one of the factors, but it [being drunk] is unacceptable and dangerous on its own,” said one official.

State-owned Pakistan International Airlines, the country’s largest carrier, said Friday that it adheres to global safety standards and that crews are examined regularly.

“PIA is the only airline in Pakistan which is IOSA-compliant,” said airline spokesman Aamir Memon, referring to the International Air Transport Association’s Operational Safety Audit benchmark.

A PIA pilot was sentenced to nine months in prison by a British court in 2013 for attempting to fly an aircraft from the United Kingdom to Pakistan with a blood-alcohol level above the limit allowed for pilots.

“This was one incident in five or ten years, he was punished,” said Mr. Memon. “We have zero tolerance for negligence.”

Riaz Haq said...

Gulf Air starts new #Pakistan flights to/from #Faisalabad, #Multan airports http://bit.ly/1RkMPq2

Bahrain national carrier, Gulf Air, said on Tuesday it recently started flights to Pakistani cities Multan and Faisalabad.

The two new flights increases Gulf Air’s services to Pakistan to seven. It also flies to Karachi, Lahore, Islamabad, Peshawar and Sialkot.

The flights to Multan and Faisalabad are operated by an Airbus A320, a narrow body single aisle aircraft, according to an emailed statement.

Multan is Pakistan’s 5th most populated city and Faisalabad is a major industrial and manufacturing hub.

Riaz Haq said...

#US First Lady Jackie Kennedy returned from #Pakistan to #US as a passenger on #Pakistan International Airline #PIA

http://www.npr.org/sections/parallels/2016/02/11/466280744/once-pakistans-pride-its-embattled-national-carrier-fights-to-survive …

Riaz Haq said...

#US First Lady Jackie Kennedy returned from #Pakistan to #US as a passenger on #Pakistan International Airline #PIA


The airline is now in debt and in crisis. It faces competition from private airlines. Staff unions are fighting government plans to sell off at least part of it.

On Feb. 2, two PIA employees were shot dead in Karachi during a demonstration against privatization. It's not clear who did it. The police used unusual force that day, including water cannons and teargas.

In a tent not far from the airport, a group of men mourns one of the two victims, a 57-year-old flight engineer named Saleem Akbar.

"When I received a call, I was really shocked and I don't understand what should I do," says his son, Fahad. "I never expected such things from the authorities. It was just a peaceful demonstration."

PIA workers nationwide responded to the killings by walking out en masse. For almost a week, PIA's fleet was grounded.

The strike was yet another reminder to Pakistanis of how far their airline's star has fallen. They used to boast about how PIA was the first Asian airline to operate jets and how it provided the planes that helped launch Emirates airline.

Ask Pakistanis what's gone wrong and they often reel off a list.

In part, says Khurram Husain of Pakistan's Dawn newspaper, it's "the inability of the government to manage what are essentially commercial enterprises. In part, political interference. In part, resistance to change from within due to excessive union activities and excessive bureaucratization."

Husain has been tracking the airline for years. He says at the heart of PIA's problems, there's a number.

"That number is the accumulated losses that the airline has managed to rack up by now," he says. "That number now stands at just under $3 billion, about half the national defense budget."

That huge $3 billion debt is paralyzing the airline, says Husain. "Just about the only thing that senior PIA management has been busy with is arranging for funds with which to make the next debt-service obligation," he says.

Pressure to overhaul PIA is coming from the International Monetary Fund, which has provided a big loan to Pakistan. The country's economy is blighted by many problems, from chronic power shortages to massive tax avoidance. The IMF thinks it's time to tackle loss-making state-run enterprises, like PIA.

Political commentator Hosain believes it's inevitable that the government will have to sell a big chunk of the airline. "PIA is hemorrhaging dollars," she says. "There's no way around it."

Many PIA staff hope that's wrong.

"The basic thing is the security of job. There is no security of job in privatization," says PIA accounts official Adnan Malik.

The Pakistani public may have fallen out of love with their airline. But Malik hasn't. "When you serve in airline, you feel love with them," he says. "You feel love for PIA. Yes. I love my country, I love PIA!"

http://www.npr.org/sections/parallels/2016/02/11/466280744/once-pakistans-pride-its-embattled-national-carrier-fights-to-survive …

Riaz Haq said...

#ADB to loan #Pakistan $600m for structural reforms to boost performance and financial stability of PSUs http://www.publicfinanceinternational.org/news/2016/06/adb-agrees-600m-fiscal-breathing-space-loan-pakistan … via @pfintl

“This assistance will give the government the ‘fiscal breathing space’ it needs to proceed with measures to create more sustainable business, delivering more efficient and cost-effective services to the Pakistani public, and will eventually free up public funds for vital social sector spending.”

At present, the Pakistan government owns 191 public sector enterprises employing around 420,000 workers. But according to the ADB, a fiscal consolidation drive to improve federal finances has prevented the government from making important reforms in this area, such as reducing pension liabilities.

ADB financing will be used to create a cost fund to “manage huge unfunded pensions and other retirement liabilities of workers”, which present a “serious threat” to Pakistan’s public sector, the bank said.

Power distribution companies and Pakistani Railways are also among the organisations that need “immediate financial support” to initiate reforms.

Pakistani Railways will receive support to strengthen auditing and accounting, and funding will also be used to improve the transparency of the public sector and strengthen corporate governance.

This funding is part of a coordinated donor packaged arranged by the Asian Development Bank, the International Monetary Fund and the World Bank. The programme consists of two batches of $300m and will run until 2018.

Riaz Haq said...

#Pakistan saw 23% growth in airline passengers in 2015; #Gwadar airport growth fastest at 73% #CPEC http://www.anna.aero/2015/09/02/pakistan-sees-a-rise-in-airline-seat-capacity-of-23/ … via @annaaero

Pakistan’s commercial airports have seen major growth in capacity in the past 12 months, as S15 seat capacity is showing a rise of 23%. Of all the airports in Pakistan, the one that is recording the greatest growth in capacity is Gwadar (13th largest in S15), which is showing an increase in capacity of 73%. A total of eight airports are recording a growth rate over the past 12 months that is greater than 60%, with four of these airports being in the top 12 (highlighted in light green). Only one airport is showing a decline in capacity when compared with S14, Skardu. The 14th largest airport in 2015 was the 11th biggest last year. However, the facility has witnessed a decline in seat capacity of 14% according to OAG Schedules Analyser. In the top 12, the airport order pretty much remains constant, with Multan (+64%), Quetta (+62%) and Faisalabad (+61%) all climbing one place as a result of all of them seeing a growth of over 60%. Turbat is a new airport to the top 12 (13th in S14) as a result of Skardu’s capacity decrease.

After seeing a rise in capacity of nearly 26%, the domestic market is the largest in Pakistan. The country market that is recording the best growth in the top 12 is Sri Lanka. The country pair is served by two routes to Colombo from Karachi and Lahore, with the latter only being launched in November last year with a twice-weekly service operated by Mihin Lanka. Services to Karachi have seen an increase in capacity of 11%, a sector flown by SriLankan Airlines. Of the country markets in the top 12, the only one to show a decline in capacity is Kuwait. In total there are three connections between Kuwait City and Pakistan for S15 (same as in S14), Lahore (-6%), Islamabad (+1%) and Sialkot (-23%). Surprisingly Karachi, the largest airport in Pakistan relating to seat capacity, does not have a direct service to Kuwait.

Over the past 12 months, Turkish Airlines has grown seat capacity out of Pakistan by 38%, beating the MEB3 carriers of Emirates (+13%), Qatar Airways (+28%) and Etihad Airways (+18%). What should also be noted is that Emirates’ sister airline, flydubai (highlighted in light green), has now overtaken Etihad Airways in relation to the monthly seat capacity on offer by both airlines in S15, helped by the carrier reporting a growth in capacity of 66%, and climbing from 12th spot in 2014 to eighth in 2015 in relation to Pakistan’s top 12 airlines. This has been helped in part by the airline recently launching services from Dubai to Faisalabad. Nonetheless the number one out of Pakistan remains the country’s national carrier, Pakistan International Airlines. The airline has reported a growth in capacity when compared to the same time period of last year of 25%. None of the airlines in the top 12 are reporting seat capacity reductions in S15. However, Air Indus is showing a consistent pattern with 0% growth and offering the same amount of seats as S14, but growth from Airblue means that the airline drops to fifth in S15 from fourth in last year.

Riaz Haq said...

Geneva – The International Air Transport Association (IATA) released its updated passenger growth forecast, projecting that passenger numbers are expected to reach 7 billion by 2034 with a 3.8% average annual growth in demand (2014 baseline year). That is more than double the 3.3 billion who flew in 2014 and exactly twice as many as the 3.5 billion expected in 2015.

Previously, IATA forecast 7.4 billion passengers in 2034 based on a 4.1% average annual growth rate. The revised result reflects negative developments in the global economy that are expected to dampen demand for air transport, especially slower economic growth projections for China.
The five fastest-increasing markets in terms of additional passengers per year over the forecast period will be China (758 million new passengers for a total of 1.196 billion), the US (523 million new passengers for a total of 1.156 billion), India (275 million new passengers for a total of 378 million), Indonesia (132 million new passengers for a total of 219 million) and Brazil (104 million new passengers for a total of 202 million).

Seven of the ten fastest-growing markets in percentage terms will be in Africa. The top ten will be: Malawi, Rwanda, Sierra Leone, Central African Republic, Serbia, Tanzania, Uganda, Papua New Guinea, Ethiopia and Vietnam. Each of these markets is expected to grow by 7-8% each year on average over the next 20 years, doubling in size each decade.
In terms of routes, Asian, South American and African destinations will see the fastest growth, reflecting economic and demographic growth in those markets. Indonesia-East Timor will be the fastest growing route, at 13.9%, followed by India-Hong Kong (10.4%), Within Honduras (10.3%), Within Pakistan (9.9%) and UAE-Ethiopia (9.5%)
“The demand for air transport continues to grow. There is much work to be done to prepare for the 7 billion passengers expected to take the skies in 2034,” said Tony Tyler, IATA’s Director General and CEO.
“Economic and political events over the last year have impacted some of the fundamentals for growth. As a result, we expect some 400 million fewer people to be traveling in 2034 than we did at this time last year. Air transport is a critical part of the global economy. And policy-makers should take note of its sensitivity. The economic impact of 400 million fewer travelers is significant. Each is a lost opportunity to explore, create social and cultural value, and generate economic and employment opportunities. It is important that we don’t create additional headwinds with excessive taxation, onerous regulation or infrastructure deficiencies,” said Tyler.

http://www.iata.org/pressroom/pr/Pages/2015-11-26-01.aspx

Riaz Haq said...

Middle East’s Largest Air #Cargo Handler to Invest $18M to Double Capacity in #Pakistan By Dec 2017 - https://goo.gl/bptPzF via @PKKHTweet

Gerry’s dnata, a 50/50 joint venture between Gerry’s and dnata, has announced its plans to invest $18 million in Pakistan.

The joint-venture, created in 1993, operates in as many as seven airports in Pakistan. Its main domain is handling cargo and luggage of 12 international airlines at Pakistan’s airports.

The company is aiming to double its working capacity by December 2017. For that purpose, they have invested $18 million. The amount will be utilized in buying ground service equipment as well as increasing storage capacity.

“We have placed Pakistan’s biggest order for ground service equipment worth $7 million and are investing another $11 million to double storage capacity of our warehouse at Karachi airport,” said Syed Haris Raza, Gerry’s dnata vice president.

Haris Raza estimates the cargo traded by air in Pakistan to about 10 percent of the total cargo. He also said that around 500,000 tons of cargo is transported by air freight in and out of the country, every year.

The Saudi Arabian Airlines, which operates over 40 flights a week to and from Pakistan, recently decided to outsource its ground handling services to Gerry’s dnata. The investment was made after taking that into consideration.

Riaz Haq said...

#Boeing offers its wide-body #Boeing787 Dreamliner against #Boeing777 to #Pakistan International Airlines

http://www.thecountrycaller.com/19807-the-boeing-company-ba-offers-787-against-pre-booked-777-is-it-to-balance-the-backlog/

Yesterday, Boeing Co (NYSE:BA) made a switch over attempt, where it offered 787 Dreamliner family wide-body planes against 777-300 model. The offer was made to Pakistan International Airlines (PIA)

In his letter to Pakistan Prime Minister, Muhammad Nawaz Sharif, Boeing Company’s Vice Chairman Ray Conner expressed his inclination towards enhanced cooperation for PIA’s improved performance. Meanwhile, he offered 787 Dreamliner passenger aircraft instead of 777, which was agreed in the previous contract signed in 2006.
PIA – Boeing Relationship
The business relationship between the two companies extends way back in 1961, when PIA placed four planes order for Boeing 707 and Boeing 720. So far, the airline had ordered 11 planes order for Boeing 707/720 family, six planes order for Boeing 737 family, two planes order for Boeing 747 family, four planes order for Boeing DC-10, whereas 13 planes order for Boeing 777 family.
This accumulates to the total of 36 planes of different models, out of which 31 planes are duly delivered by the aircraft manufacturer. For the remaining five 777-300ER model planes, the aforementioned offer was made. The order was initially placed in 2002, which is still undelivered.

Boeing 777 vs 787
According to the company’s official specification, Boeing 777-300ER has 396 passengers capacity; whereas it has the capability to travel 13,650 kilometers distance in one go. Its maximum allowed takeoff weight is 351,530 kilogram. Its official market price as of August 2016 is $339.6 million.
On the other hand, Boeing 787-10 Dreamliner has 330 passengers capacity, having the capability to travel 11,910 kilometer distance in one go. Its maximum takeoff weight was not disclosed, since it is still in the completion mode and is expected to be released later this year. Its official market price as of August 2016 is $306.1 million.
Boeing 787 Excess Inventory Issue
Last week, Boeing CFO Greg Smith attended Jefferies Industrials Conference. In this conference, he disclosed that the company is intended to reduce Boeing 777 family production to halt Boeing 787 family, if both these wide-body aircraft keep depicting lower demand. It is pertinent to note that as of August 2, 2016, the aircraft manufacturer had claimed collective $1.7 billion in after-tax duties against excess Boeing 787 inventory and sluggish Boeing 747 sales, in its 2QFY16 financial results.

It is hereby apparent that PIA had paid more amount to Boeing against which it gets offer of lesser value plane, after 14 years. Furthermore, through 777-300ER, PIA could offer more passengers’ commutation against 787-10 Dreamliner. Besides this, 787-10 Dreamliner delivery will take another couple of years, as it is slated to start deliveries from 2018 onwards.