Why the PIA-Turkish Airlines deal is a good idea

Published: February 28, 2011
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The agreement will transform PIA into a “super connector,”
that will connect a growing mass of intercontinental air travellers.

The agreement will transform PIA into a “super connector,” that will connect a growing mass of intercontinental air travellers.

KARACHI: If Pakistan International Airlines (PIA) is able to secure a codeshare agreement with Turkish Airlines (THY), it would be the best thing that has ever happened in the history of Pakistani aviation since the advent of long-haul flights eliminated Karachi’s status as a global stopover city.

The agreement, which has not gone beyond an initial discussion at this point, would transform PIA from a beleaguered, loss-making, state-owned enterprise into one half of a team of airlines that would join a league known as “super connectors,” airlines based out of global hubs that will connect that growing mass of intercontinental air travellers.

The contours of the agreement currently being discussed are as follows: PIA would give up its passenger routes in Europe and North America to Turkish Airlines while reorienting its fleet to expand its coverage of East Asia and Australia, for which Turkish Airlines would then give up its routes and passengers.

The gain for travellers

As may be immediately evident, were this deal to go through, it would be an immediate boon to Pakistani air travellers, offering them a far wider array of options, both in terms of destinations and flexibility of timings. Turkish Airlines offers 523 flights a week to European destinations from Istanbul and 184 flights to destinations in North and South America. PIA offers less than 100 flights a week to all of these regions combined.

Turkish Airlines currently only operates out of Karachi. And while the details have yet to be discussed, it is likely that the company would add its services to Pakistani travellers, both in terms of the frequency of flights – likely to be more than one a day – as well as the number of airports, which will probably include Lahore, Islamabad and Peshawar in addition to existing services from Karachi.

Imagine being able to fly every day from four Pakistani airports to any one of 41 destinations in Europe and 15 destinations in the Americas.

There are other benefits as well. For those of you contemplating Canadian immigration, consider where you would rather have your stopover between Pakistan and Toronto: Istanbul or Dubai?

For those concerned about visas, Pakistani citizens can now get a visa on arrival in Turkey, provided they have a visa to travel to the United States or the European Union. There are no transit visas for short stopovers.

The gain for the airlines

It is not just Pakistani travellers who will benefit from the alliance. The airlines would effectively become one large super-connector, with two hubs in Karachi and Istanbul, located perfectly to take advantage of the growing traffic between Europe and East Asia. In effect, Turkish Airlines would handle the western end of the route-map and PIA would handle the eastern end, by redeploying its long distance aircraft towards East Asia and Australia.

There are currently only a handful of super-connectors, most of them based out of the Middle East. One of the biggest is Emirates Airlines, whose importance to the global travel industry far exceeds the importance of its hub, Dubai, to the world of global commerce. Qatar Airways and Etihad are rapidly expanding their fleets to compete with Emirates.

According to The Economist, “the Gulf is a natural ‘pinch point’. From there, the long-range jets that began to come into service in the late 1990s can reach any city on Earth. It is also within a few hours’ flight of billions of people in Asia and Africa previously neglected by the airline industry.”

Neither Pakistan nor Turkey is in the Gulf, but they are both close enough to be able to create the same effect if they combine forces, which is precisely what Turkish Airlines had in mind when the first proposed the alliance. In short, if both airlines play their cards right, they could be handling significant numbers of travellers who are neither Turkish nor Pakistani and going to neither country as their final destination.

While the numbers are not yet in, it is likely that both airlines would be able to take a significant chunk of the nearly $20 billion in revenues that the three Middle Eastern super connectors currently earn. Turkish Airlines generated $4 billion in revenues in 2009 and PIA generated an even smaller $1.2 billion.

Why the pilots oppose the deal

The commercial logic of the deal, therefore, seems to rest largely on solid foundations. The only people who seem to oppose it are the pilots’ union, who fear a loss of the perks that they have gotten used to when they fly to North America and Europe. They will, of course, keep flying to destinations in East Asia and Australia for which their compensation is likely to be very similar, but apparently they do not seem to like flying there quite as much.

There is a chance, of course, that the deal might still go through. But PIA just lost the most energetic champion of the alliance in the dismissal of managing director Ijaz Haroon. One can only hope that his successor will keep the talks alive and pursue them to completion.

The writer can be contacted at [email protected]

Published in The Express Tribune, February 28th, 2011.

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Reader Comments (26)

  • Ahmed Khan
    Feb 28, 2011 - 11:45AM

    It is a good effort that Mr. Tirmizi have brought this issue to the general public, the issue which resulted losses of million of rupees to the national carrier during the last strike and protests by the PIA employees. It is fact that behind all this protests, the PIA Pilots were involved. The media should investigate the matter more and disclose more facts to the people of Pakistan so that they could know what the pilots and other crew of PIA want actually.Recommend

  • Maria
    Feb 28, 2011 - 11:55AM

    Well written article outlining the benefits to PIA and to Pakistani passengers. I think the PIA unions are just being selfish and I too hope that the new management can rework the merger deal.Recommend

  • Billoo Bhaya
    Feb 28, 2011 - 12:49PM

    You are flogging a dead horse. The deal is already dead. Recommend

  • Tayyeb Afridi
    Feb 28, 2011 - 1:07PM

    It was my thrust to know the reason of pilots protest. I always wanted that this deal should be made public by then Managing Director as issue was much politicized. Ironically, it was kept in secret till the flights were suspended. the media intervention just gave us one perspective that flights were suspended just because of deal made by MD. what was the deal? no body had time to explain and discuss. The way the issue was reported in media,had sent message to public that MD had been punishing PIA staff. If their benefits were not curtailed then as to why they protested.Recommend

  • wahab
    Feb 28, 2011 - 2:12PM

    I dont agree. Why do u want to snatch the privilege from PIA passengers of direct flights to EUROPE? Also not many people go to East Asia from Pakistan. Most of the travellers are from Europe and USA.

    Secondly a contract could have been on route sharing basis rather than giving up all the roots.

    PIA may have only few planes now, but if we give routes we are giving up chances of buying more planes some times later if we prosper inshallah.. The deal was like the one where we gave our rivers to India thinking that they only cause flooding.. no matter how much we repent, we cant get them back nowRecommend

  • muhammad zahid
    Feb 28, 2011 - 2:24PM

    instead of these deals we should adopt what turkey’s founder ataturk did.We should have a secular constitution,have a state where all citizens are equal ,not like our current state where our constitution discriminates horribly against non muslims by birth as it disallows a non muslim to be the president or prime minister.
    What blatant & horrific discrimination this is,we persecute the nonmuslim baby while it is still inside the mother’s belly by ensuring that he/she is born unequal to his fellow citizens.

    Ataturk was a great visionary who knew giving religion a say in the affairs of the state leads to the disastrous situation we find our country in today.Recommend

  • AA
    Feb 28, 2011 - 2:29PM

    Does this still mean that ex-PIA Chairman’s family members still get free first class for life ?? Recommend

  • Feb 28, 2011 - 4:03PM

    This is all well and good, but if this agreement was such a good idea, then why wasnt the MOU or a similar document that was signed made public? Why was it not put to a debate in parliament? Further, you are assuming that the number of customers that PIA will loose on its flights to Europe and North America, will be compensated by additional passengers for South Asia and East Asia. Its not going to happen, customers originating in the West are not going to choose Karachi as a transit point, when they can opt for Middle Eastern airports, thats just a fact.

    Finally, regardless of what partnership deals PIA signs, it still doesn’t resolve any of its internal problems. It is just delaying that inevitable and PIA will implode. Better to first solve PIA’s internal problems, and join a multi airline agreements such as Star Alliance or One World.Recommend

  • Meekal Ahmed
    Feb 28, 2011 - 4:19PM

    @AA:
    There is no first-class in PIA.

    I had written positively about this deal but on reading others started to change my mind.

    The deal must tell us how this will help PIA return to profitability. That’s the bottom line.

    PIA pilot’s objected because for their long-haul operations, pilot’s get a special allowance of $600. That was stated by the previous Chairman. Recommend

  • Uzair Javaid
    Feb 28, 2011 - 6:19PM

    This article is very well written where the author jotted down all the points, one thing i noticed that there was not a single negative point all across the article. I would take this article as much pro Mr-ex MD.Ijaz Haroon. I have learnt in my personal capacity that Mrs. Haroon runs a catering business here in England that caters to only PIA for its flights further to Americas or back to Pakistan. I would wonder giving up your route for Glasgow led Emirates take additional flight to Glasgow. I met a person who landed on the last flight that PIA had on its route to Glasgow from Pakistan. He said the plane was packed, why did PIA shut down this route! I would still think code sharing no matter how beneficial it may yet be for PIA, but you must not still give up the routes that brought a very handsome amount of money to you ie: Milan, Geneva, Dublin and Amsterdam. I would fly by PIA not because it offers me great hospitality and environment but because primarily its my National airlines in monetary troubles and secondly that it takes me directly to my destination without any stopovers.Recommend

  • Zeeshan A Khairi
    Mar 1, 2011 - 1:48AM

    Since when did Capt Aijaz Haroon changed his name to Farooq Tirmizi?Recommend

  • salim
    Mar 1, 2011 - 10:41AM

    Not convincing enough.Recommend

  • Nabeel
    Mar 1, 2011 - 11:37AM

    I don’t know why the article writer has forgotten one thing that people DON’T LIKE to take via routes and prefer direct router and now if they have to take via router they will prefer Emirates and Etihad Airways. There are two reasons. One is that standard of Turkish Airline is no better than the standard of PIA. SO dragging oneself to have a via router with same service of quality and also stay in any of Turkish airport while again having delayed PIA flight from Turkey to Pakistan will further “damage” it. If you think properly and give me a reason what is creating so much loss to PIA. The answer would be corruption in Pakistan and specially in PIA department, delayed flights, no particular timing causing huge fine at the Airport where they have to land or take off, even huge budget allotment yet dreadful service.

    Getting contract with Turkish Airways is just an opportunity for the Corrupt officers and ministers to get more commission and cutting the government budget alloted to PIA to their own pocket rather than investing it for the betterment of PIA. Furthermore this can create more jobless when those flight flying to different destinations in Europe will be grounded for ever.

    Only people who are just Party worker for no good to current government will like this move, rest will just bear it and will move to Emirates and Etihad or any airline from Gulf region for easy and competitive services they offer.Recommend

  • Billoo Bhaya
    Mar 1, 2011 - 1:02PM

    @Zeeshan A Khairi:
    Well said Dude. A group of people are hell bent on destroying PIA’s franchise for their personal greed. Even Tribune is giving them space to advertise their BS after the Govt. has reached an agreement with PIA employees. Even PIA’s accounting department was against the deal. Now like snake in the grass these people are resurfacing as saviours of the airline. When someone says something is too good to be true, there is always one ripping off the other. Recommend

  • Billoo Bhaya
    Mar 1, 2011 - 1:40PM

    @TightDhoti:
    Well said my friend. I love your honesty and integrity in saying what is right and the truth. Keep it up.Recommend

  • Sharjeel Jawaid
    Mar 1, 2011 - 4:09PM

    Why does the writer not suggest doinjg away with the National Carrier altogather and allow one airline each from the western and eastern hemisphere to operate out of Pakistani Airports! [If giving up the western hemisphere is such a good idea.]Recommend

  • mohammad iqbal
    Mar 1, 2011 - 5:51PM

    I am also connected to aviation industry since two decades as a logistic partner. Mr. Tirmizi( dont know who he is) while defending the so far failed PIA/TURKISH deal, put the whole blame on the pilots. This is not to be. It is the Turkish airlines which is going to benefit by taking away our western bound passengers in return to a meagre number of east bound passengers offered to PIA. Our western bound passengers will be too happy to interline with Turkish( already 50% pakistani passendgers use Turkish for their UK travel because of the excess baggage tricks) But the eastbound passengers originaing Istanbul will think twice passing thru pakistani airports, keeping in view of our shattered/battered image. It simply like this. Will prefer going to New York via Tripoli or Dubai. The answer lies there. So, in a nutshell, this PIA-TURKISH deal documents have more than the apparent statistics, and some hidden material could be discovered if access to the facts is grantedRecommend

  • Riaz
    Mar 1, 2011 - 7:17PM

    This is a totally bogus premise. PIA needs good manager or need to be privatized if it is survive. It is totally bogus to leave the most lucrative routes where PIA has better prospects for more passengers then picking routes where there is a lot of competition and on those routes PIA is not likely to survive.
    Most Pakistani travel on PIA because it is a national carrier despite it poor reputation and knowing fully well the risk involved in flying horrible planes with horrible service and those passengers will not benefit Turkish Airlines another barefoot pedestrian of an airline.
    Hence this is another scheme of Zardari conduits milk the already empty dirty coffers of the exchequer. Recommend

  • Billoo Bhaya
    Mar 1, 2011 - 11:47PM

    @mohammad iqbal:
    Well said my friend.Recommend

  • My Opinion
    Mar 2, 2011 - 12:00AM

    Traitor at work.Recommend

  • Air Commodore(R) Arif Moinuddin
    Mar 2, 2011 - 12:35AM

    To make PIA a profit making organization, all decisions to revamp the airline should be purely based on merit and business acumen. Perks and previliges have to be in line with annul profitability. The new managing director of PIA is dynamic and with a vision for development. Lets give him the space and time to prove his worth.

    The only precaution is that there would be PIA employees of old school who would try their utmost to fail him.

    My advice to the MD. Get a totally new and dedicated team of managers with focused business sense.

    PIA is our national pride. lets keep the Pakistan flag flying high

    May Allah bless Pakistan.Recommend

  • Nadeem Ahmed
    Mar 2, 2011 - 4:20AM

    I have been travelling between Toronto and Lahore/Karachi/Islamabad for the last fifteen years and I have used almost all airlines which operate between these cities. I have also used direct flights and many times have made two to three stops in between. Pakistanis residing in Europe and North America prefer direct, non stop flights especially when they are travelling with their families. If PIA/Turkish Airlines can operate few direct flights from North America and Europe, then there is no harm in having such business deal, otherwise its a very bad news for Pakistanis living in North America and Europe.Recommend

  • Syed
    Mar 2, 2011 - 10:09PM

    Finally some one in Pakistani press that got the facts right !
    I really hope this agreement gets signed! Recommend

  • Harry Isaac
    Mar 2, 2011 - 10:40PM

    The main beneficiaries of this deal would have been the Turkish. PIA would be giving up its most profitable routes of North America and Europe. It will also add an unnecessary stop over in Istanbul instead of flying direct. Secondly, as part of the “route sharing” deal, PIA was to fly Turkish passengers to East Asia and Australia. Consider this, how many passengers do you think fly from Turkey to East Asia? East Asian destinations are becoming popular amongst Pakistanis as a cheap destination and also because there are no visa issues for Pakistanis. The Turkish don’t have the same problem and they have a myriad of European destinations to choose from. Hence, looking at the bigger picture, PIA would have lost a lot of profitable routes in exchange for lifting very few Turkish passengers to East Asia and Australia.Recommend

  • Mar 4, 2011 - 4:13AM

    This cannot be true as it will bring Pakistanis and PIA benefits! I am sure Pakistan cannot be this forward thinking? Recommend

  • isfandyar
    Mar 7, 2011 - 3:03AM

    So what is the update!!!
    I’m tired of being treated like a dog in UAE.
    Oh actually no lm tired being treated like those that
    Want to make the blasphemy law Islamic ( salman, shabaz) I’n Dubai!!

    Please give updateRecommend

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