The future of the global air travel industry is bright and kicking in terms of strong growth due to an ever increasing clientele. Keeping in view the ongoing progress, it is estimated that the number of air-borne passengers will double by 2015 as compared numbers of 2005. For airlines, the future will hold many challenges to stay ahead in the race. But serious contenders will obviously turn these challenges into opportunities. Successful airlines will be those that continue to tackle their costs and improve their products and services, thereby ensuring a robust presence on the horizons of key world aviation markets.
It is commonly assumed that to meet the requirements of their increasingly discerning customers, some airlines have to invest heavily in the quality of service they provide, both on ground and in air. Ticket-free travel, new interactive entertainment systems, extra-luggage allocation, holiday packages, free hotel accommodation and more comfortable seating are just some of the marketing tactics being introduced to attract new passengers and maintain an existing customer base. Interactive and appealing slogans such as ‘Service with a smile’ and ‘The customer is always right,’ along with the high degree of warmth displayed by the staff all around the world are testimony to the fact that the industry is very much vibrant and proactive to the tricks of the trade.
Business travel has also experienced immense growth as companies’ functions become increasingly international in terms of their investments, supply, production chains and customers.
Faisalabad-Karachi scenario: Keeping in mind all assets and liabilities of air travel, lets have a bird’s eye view of Pakistan’s national carrier, PIA, that seems least concerned with regards to its slogan, ‘Great people to fly with’. Numerous stories highlight a careless attitude shown by PIA, but their flight schedule between Faisalabad and Karachi is a case in point. As per the current schedule, the total number of weekly flights has been reduced from 14 to 9 (one flight daily Saturday to Thursday and three flights on Friday). There is a daily flight arriving from Karachi at 11.00 a.m. that returns the financial center in the afternoon. Consequently, a businessman who wished to visit Karachi shall have to arrive there a day in advance. Moreover, as there is no flight from Karachi to Faisalabad after 9.30 a.m., he has to wait for the next day to board a return flight. Under these circumstances, those who need to travel to Karachi for a few hours in the morning are required to stay in Karachi for two nights which is very aggravating for anyone, in terms of lost time and expenses.
This has created a problematic situation for many who travel to and return from abroad. As an alternative, a lot of Faisalabad passengers prefer the Lahore-Karachi air route to avoid an illogical itinerary from Faisalabad. In the past, there were a total of 14 flights from Faisalabad to Karachi per week that comprised a morning and an evening flight every day. It was possible for a trader or a businessman to go to Karachi in the morning and return back the same day in the evening after spending his working day in Karachi to settle his business and official deals.
“Business community of Faisalabad, which since a long time has had strong reservations about Pakistan International Airlines Faisalabad-Karachi flight schedule, has now been forced to conduct an open protest against the national career’s policy that doesn’t seem to show any sympathy for its clients.” These are the comments by Zafar Iqbal Sarwar who is the Chairman of the Adhoc Committee on PIA, set-up under the aegis of Faisalabad Chamber of Commerce and Industry (FCCI) that reveals the dismal state of affairs running between the airline and the Faisalabad business community. But this statement is just the tip of the iceberg, showing strong dissatisfaction to the services of PIA. FCCI officials have written piles of letters to the authorities at every level including the Defence Secretary with a simple request to restore the old flight schedule but there has not been a response from any quarter.The community has given up all hopes now.
“We urge PIA to give a serious consideration to the demands of the business community of the third largest city of Pakistan that stands second in terms of revenue generation for the national exchequer”, said Sarwar. “The business community of Faisalabad is fed up with the repeated assurances of Pakistan International Airlines (PIA) authorities that they will restore the old flight schedule between Faisalabad and Karachi but there has been no result so far,” he said.
This is just a single example of how PIA authorities are dumping their clients’ feedback into the dustbin. This might be considered as a tiny leak in the ‘PIA vessel’ but the small leak often sinks giant ships. Now let us see the general impact of the ‘Damn Care’ policy on the organisation itself.
PIA’s financial and institutional dilemma: Accumulated losses of Pakistan International Airlines (PIA) have crossed the mark of Rs92 billion in 2010, sources said while commenting on the airlines audited accounts for the year ended December 31, 2010.
Sources said that PIA’s downhill slide into heavy losses continued during 2010 as the national carrier added an additional loss after a tax of Rs10 billion to it accumulated losses, raising it to Rs92 billion. (The figures of the losses incurred during last six months are not available as yet). They added that the external auditors in their report to the Board of Directors stated that the corporation incurred a loss of Rs20.78 billion during 2010 raising the accumulated losses to Rs92.32 billion and as of December 31, 2010 the corporation’s current liabilities exceed its current assets by Rs59.097 billion.
According to a research study, an institutional decline for PIA began when Shaukat Aziz, the then Prime Minister appointed his friends Tariq Kirmani and Zafar Khan to head the airline and the debacle did not stop till Aijaz Haroon brought it to the point of bankruptcy through his clumsy contribution to the already deteriorating organisation. During the three-year tenure of Captain Aijaz Haroon as Managing Director, the airline incurred a phenomenal loss of over Rs62 billion, double than the accumulated loss of its 55-year old history.
Sources added that IATA airlines had one of the best years in 2010 and many airlines had overcome their financial problems particularly due to reasonable fuel prices, yet PIA drifted into a deeper financial crisis due to its high cost of flying.
This reflects the incompetence, pilferage, corruption and mediocrity of the management that runs an airline with a load seat factor of over 75 per cent, which under no circumstances is an under load. PIA fare charges are comparable to those in the international market. For instance, Delta Airlines with a comparable load seat factor has just declared a profit of over $900 million as on Sept 2010. On some routes, including their operations to Saudi Arabia, the airline charges an enormously high fare, which is much more than what is being charged by the global market or other regional carriers except that of Saudi Arabia itself, which seems to have formed a cartel with PIA against the interest of the Pakistani pilgrims.
