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| Passenger Aircraft at Karachi International Airport |
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
Related Links:
Haq's Musings
South Asia Investor Review
Pakistan Air Travel Market
Pakistan $20 Billion Tourism Industry Booming
Saving PIA, Railways and Education in Pakistan
Pakistan: Political Patronage Trumps Public Policy
Riaz Haq's Youtube Channel
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India tried to sell its national airline. It got zero bids
http://money.cnn.com/2018/05/31/investing/air-india-privatization-fails/index.html
India has failed to find a buyer for its ailing national airline.
Selling Air India was one of the government's economic priorities for this year, and the failure of the auction will dampen hopes that it could privatize other state-owned companies.
Bidding for the national carrier closed Thursday without a single prospective buyer coming forward.
"As informed by the transaction adviser, no response has been received for the expression of interest floated for the strategic disinvestment of Air India," the Indian Ministry of Civil Aviation said on its official Twitter account.
The government put Air India on the auction block last year, and was offering bidders the chance to buy 76%. It wants to scale back taxpayer support for an airline that has lost money for years.
The auction deadline had already been extended in the hope that a buyer may come forward. The future of the indebted carrier is now very uncertain.
"Further course of action will be decided appropriately," the ministry said in its tweet.
Air India declined to comment, referring the matter to the ministry. Aviation ministry officials did not respond to requests for comment.
Despite its losses, and growing competition from budget carriers such as SpiceJet and IndiGo, Air India is still a major player in an aviation market that is projected to be the world's third biggest by 2026.
With a population of 216 million, Pakistan is the world’s fifth-largest country, sandwiched in size between Indonesia and Brazil. It is also large geographically, with an area bigger than Turkey.
Since 2014, Pakistan’s GDP growth has averaged 4.7%, dragged down by less than 2% last year. The country’s average was the second-lowest in South Asia, with only Sri Lanka achieving lower growth. Bangladesh (7.2%) and India (7.0%) performed strongly.
In 2019, total seats to, from, and within Pakistan amounted to 24.1 million, up by 53% – or 7.4 million – over 2010, data from OAG indicates.
https://www.anna.aero/2020/07/31/pakistans-international-seats-68-since-2010-domestic-seats-population-lower-than-bangladesh/
Despite 7.4 million seats added since 2010, Pakistan’s capacity was down nearly 8% YOY in 2019, with a loss of two million seats.
This decline was the result of a myriad of things, including the country’s struggling economic performance, PIA’s ongoing major problems, and the end of Shaheen Air in late 2018.
Shaheen Air was Pakistan’s third-largest operator in 2018, down from number-two in 2017, mainly as it ceased operating before the end of the year.
The rise of SereneAir, which launched in 2017, has not been sufficient, with this carrier operating nine domestic routes with a fleet of just four B737-800s.
Last year was in many ways extraordinary, so perhaps not too much attention should be paid to it.
Pakistan’s international market increased by 68% between 2010 and 2019, with over eight million seats added.
Pakistan’s own airlines were flat in 2019 versus 2010, with their share falling from 52% to 31% – the lowest in many years.
This decline, eliminating the growth from 2014-2017, was partly from Shaheen Air’s cessation. In 2018, over seven in ten of Shaheen Air’s seats were deployed internationally, mainly to the core Pakistan markets of the UAE and Saudi Arabia.
Nor was it assisted by PIA’s international seats falling by over 800,000 – hopefully partly from it attempting to focus on profitable and marginal routes that could be improved.
PIA’s ban from the EU this year will obviously not help, with one-quarter of the operator’s international capacity to/from Europe. It has just been announced that its UK services will resume in August.
Meanwhile, foreign airlines have inevitably strengthened their offerings, with their seats growing by 137% since 2010 – up over eight million. Foreign airlines were solely responsible for the country’s international growth in this period, with Saudia, Emirates, Qatar Airways, flydubai, and Air Arabia growing the most.
Saudia, which was already Pakistan’s leading airline at the start of the decade, added the most seats of all foreign airlines, cementing its position. Saudia had 14 routes to five Pakistani airports last year; with 555,000 seats, Jeddah – Lahore was its top route.
Like South Asia generally, Pakistan is the bread-and-butter of the MEB3: Emirates, Qatar Airways, and Etihad.
Collectively, the MEB3 had 4.8 million seats to/from Pakistan last year, up by nearly three million since 2010.
Perhaps surprisingly, the MEB3 had ‘only’ 24% of total international seats last year, while their share of capacity by foreign airlines was unchanged at 35%. This was from reducing capacity in more recent years.
#Pakistan #Airline With 14,000 Staff for 30 Planes to Cut Half Its Workforce. Even before #Covid restrictions, #PIA was banned from key markets including the #US and #Europe. And it missed out on peak travel periods like the annual #Hajj pilgrimage. https://www.bloomberg.com/news/articles/2021-04-27/half-of-jobs-to-be-cut-as-pakistan-s-airline-fights-to-survive
Even airlines in good financial health have been left reeling because of the coronavirus, which has caused dozens to collapse and thousands of job losses globally. In its latest outlook last week, the International Air Transport Association said carriers worldwide will lose about $48 billion in 2021 as virus flareups and mutations extend the timeline for a restart of global air travel.
PIA had 30 aircraft as of Sept. 30, including 12 Boeing Co. 777s and 11 Airbus SE A320s. Hussain didn’t specify what changes would be made to the fleet, which also includes ATR aircraft, but he said the size would be “kept under 30” and include more fuel-efficient planes. PIA will no longer serve destinations such as Tokyo and Manila, Hussain said.
Pakistan vowed to cut jobs and sell non-core assets after a series of bailouts, including one of 3.2 billion rupees in June so the airline could meet interest payments. About 2,000 employees have taken voluntary redundancy already, according to the airline. Meanwhile, non-core operations such as catering and engineering will be outsourced, said Hussain, a former central bank governor.
Other assets are also being assessed, including the Roosevelt Hotel in New York, which the airline acquired during its loftier days as a symbol of Pakistani prestige. The hotel was closed last year and may be sold or redeveloped.
#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-airways-granted-an-ol-eyes-erjs
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.
A new runway at Faisalabad International Airport will be completed by October this year, enabling Boeing 777 aircraft to land, said Airport Manager Muhammad Anwar Zia.
Addressing Faisalabad Chamber of Commerce and Industry (FCCI) here on Thursday, he added that the air cargo complex was also under construction and 75% of the work was expected to be completed before the runway becomes operational.
Zia expressed satisfaction over the available passenger load and air cargo and said that 102 domestic and international flights were successfully operating from Faisalabad airport.
Zia expressed satisfaction over the available passenger load and air cargo and said that 102 domestic and international flights were successfully operating from Faisalabad airport.
He said the old runway could only accommodate small planes, which prompted authorities to construct a new runway for wide-bodied aircraft, in view of the projected increase of passengers and air cargo from the city and its catchment areas.
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The new runway will be completed by October this year, enabling Boeing 777 to land at Faisalabad International Airport.
This was stated by airport manager Muhammad Anwar Zia at a meeting with FCCI officials on Thursday.
He said the air cargo complex was also under construction and 75 per cent of the work would be completed before the runway becomes operational.
He expressed satisfaction over the available passenger load and air cargo and said the airport was in a deficit of Rs220 million when he was posted here.
“It is now earning a profit of Rs2 billion,” he said and added that presently 102 domestic and international flights are operating from this airport facility in a month. He said that only small planes could land on the old runway, prompting authorities to construct a new runway.
He said a study was conducted to evaluate the passenger load before contacting international airlines. At that time the available passenger load was only 70,000 which jumped to 500,000 and is now expected to cross the mark of 800,000 within the next few years. He said that in a similar pattern, we must calculate the available tonnage of air cargo so that the airlines could be convinced to launch a dedicated air cargo service from this port.
He asked the FCCI to share data on air cargo so that a comprehensive study could be finalised. Four planes can be parked at a time and more facilities will also be arranged after calculating the passengers and air cargo shipments, he said.
https://www.dawn.com/news/1696356/faisalabad-airport-to-get-new-runway
Revving up in low gear: The paradoxes in India's transport sector
https://www.business-standard.com/article/opinion/revving-up-with-brakes-on-the-paradoxes-in-india-s-transport-sector-122070800816_1.html
No Indian airline makes money, railways' passenger traffic is stagnant, and roads have a revenue imbalance problem, but investments in all three are like never before, notes T N Ninan
India’s transport sector offers a strange mosaic of stagnant traffic trends, poor or negative returns, and yet unprecedented levels of investment for the future. After years of vast sums being ploughed into all forms of transport, the next two or three years could see the results of that investment in the form of transformational change in the air, on highways and expressways, and in the railways. Here’s hoping.
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