Instead, all three organisations will now be under the Aviation Division, which will be headed by the Adviser to the PM on Aviation Affairs. CREATIVE COMMONS
The Pakistan Muslim League-Nawaz (PML-N) government has started to bring in sweeping reforms and as some insiders had always maintained one of the first sectors to get its attention is aviation.
A new division has been created to look after the aviation industry, which up till now had been closely controlled by the Ministry of Defence, highlighting the interest of Prime Minister Nawaz Sharif who is largely credited for the country’s open skies policy.
“This appears to be a very good decision. We had to do away with bureaucratic hurdles to move swiftly with plans and requests like issuing licences to more airlines,” said an aviation industry official. “But let’s hope this doesn’t turn into some game where only a few people are favoured.”
The Aviation Division will be headed by Shujaat Azeem, who has been appointed as the Adviser to the Prime Minister on Aviation Affairs recently, along with other cabinet members.
Civil Aviation Authority (CAA), Pakistan International Airlines (PIA) and the Airport Security Force (ASF) will come under the new division.
The move is particularly beneficial for CAA, which had become a dummy organisation over the years.
“From appointments to issuing flying permits and awarding frequencies to airlines, everything was being controlled by the defence ministry. That had greatly compromised our position,” said a senior CAA official.
Over the last five years, some of the leading carriers including British Airways, Lufthansa, Singapore Airlines and Malaysia Airlines have stopped flying to Pakistan.
“We have to come up with policies and incentives to attract more airlines. That requires the will to take decisions based on commercial interests. Things would move very slowly at the ministry when it came to this,” said the official.
On the domestic front, at least four airlines including Indus Air, Rayyan Air, Vision Air and Fly Pakistan Air had been vying to start operations for quite some time. “Here again the ministry had the final word on all the affairs, leading to delays.”
Since its establishment in December 1982, the CAA has seen around 30 organisational heads.
About the adviser
Captain (retd) Shujaat Azeem is the brother of seasoned politician Senator Tariq Azeem. Shujaat is also CEO of Royal Airport Service, which provides ground handling facility to airlines.
A former pilot for assassinated Lebanese Prime Minister Rafiq Hariri, Shujaat is considered close to PML-N chief Nawaz Sharif. He reportedly played a crucial role in establishing links between the Sharif family and the Saudi royal family.
Shujaat has other business interests including a housing colony Sukh Chayn Gardens on the outskirts of Lahore.
Challenges
Bogged down by financial losses, PIA has become a bone of contention for successive governments. World’s highest employee to aircraft ratio, fiscal leakages and excessive interference of unions in management affairs has made it a difficult-to-run state-owned organisation.
With the Ministry of Defence as its parent, proposals to privatise it were shot down as some people in the government see it as a ‘strategic asset’.
But the real challenge for the adviser will be to help bring back the business, which PIA has lost to Middle-East based carriers. “They are flying more and more flights to all the cities and taking away our passengers. Why can’t the government give us the money to buy more planes and help us fight to get back the traffic,” said an airline official.
Considering the close links PML-N enjoys with Arab states, it remains to be seen if the new adviser can stop the onslaught of their airlines.
A CAA spokesperson said he was not aware of the development. Ministry of Defence spokesperson was not available for comments.
Published in The Express Tribune, June 11th, 2013.
Like Business on Facebook to stay informed and join in the conversation.
COMMENTS (45)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
1721377568-0/BeFunky-collage-(18)1721377568-0-165x106.webp "article")
I have been reading with interest the opinions expressed above and being an aviation professional all my life and being actively involved in the setting up of the first few private airlines of Pakistan I will like to share my views on it. Open Skies was one of the most far reaching decisions taken by the previous Nawaz Government, except its full potential could not be utilized because it was scuttled by the governments that followed resulting in causing damage to PIA instead of the planned benefits it would have brought. It may be mentioned that two of the most successful airlines of the world, Emirates and SIngapore Airlines reached the pinnacle in a total open skies environment and in the face of open competition with the mightiest and the smallest carriers in the world. These airlines had no bilateral protection of traffic rights or fare regulation. On the other hand some of the most protected airlines like Saudia, Egypt Air, PIA, Air India are languishing at the bottom of the table in terms of profitability, service etc. The only way out for the aviation industry in Pakistan is to totally deregulate it, even allowing following carriers to hold significant interests in the domestic carriers like India has started doing. In fact, Saudi Arabia after using all its resources and efforts to prop up Saudia or the local carriers has given up on state protection and has gone even further to allow foreign carriers to operate on domestic routes. I will even go to the extent of saying that if nothing works in resurrecting PIA there is the Swiss model. When Swissair started losing heavily a country like Switzerland preferred to close it down and launch a lean and efficient new carrier "Swiss" clear of liabilities which is now developing well. I sincerely wish that the Prime Minister and his team will take a pragmatic view of the situation free of political considerations and vested interests to develop the aviation sector.
The Airlines stopped flying into Pakistan are: 1- Air France 2. British Airways 3. Japan Airlines 4. Al-itallia 5.Singapore Airlines 6.Nepal Airlines 7. KLM-Dutche Airlines 8. Lufthansa German Airlines9. Phillipine Airlines. 10. Libyan Airlines 11. Egypt Airlines 12. Swiss Air 13. Sudan Airways. 14.Kenya Airways. 15.Iraqi Airways. 16. Aerofloat/ Azabajan airlines.17. Syrian Airlines 18.Jordanian Airlines. 19. Indian Airlines 20. SriLankan Airlines.21. Scandinavian (SAS) Airlines
mainly because of the sick & inefficient govt officials motivated by their corrupt practices..
It's a revolutionary decision by NS govt. MoD is not the right owner of these institutions, its civil aviation not air force. PIA is on the verge of bankruptcy. I am in aviation industry and hope that this will have positive effect in the long term! Only option is Open Skies! Its the way to go! protectionism just ruins PIA! it has to be competitive to survive! Lets just hope that deserving people are appointed the heads who can do what needs to be done!
Fleet planning.Now it is a known fact that this decade z a decade of aviation industry, the airlines r growing very fast all over the world and new airlines r emerging in every country,we have already lost 3 precious year just discussing different bussiness plans which r based on our personel whims nd wishes not based on market opertunities,here r some suggestion on fleet acquisation. 1-We immidiatly need narrow body fuel efficient air-crafts, mix bucket of Boeing737-800 and Air Bus320,these aircrafts should be hired on wetlease for one year as immidiate crises can be averted. 2- After one year the same or equivalent air crafts should be inducted on dry lease. 3- New agreements with Boeing and Airbus should be concluded for 15 new air-craft,which will be expected to be inducted in 2018, when existing fleet of B777 vl be in aging phase. 4-For hijj operation chinese market should be explored to get cheapest aircrafts on short term lease for successful hajj operation. In whole proceess the interference of transperency international should be minimised because they dont have any expertise of airline bussiness obligations,now v r n do r die situation further delay n decisions could be disasterious for all of us.
wow World’s highest employee to aircraft ratio !
PIA has long way to go - needs to benchmark itself with other success stories / intenational airlines; improve on the safety, service, attitude and punctuality.
Our airports also need to be upgraded. Toilets even in international flights area are at times not clean.
Immigration, security staff and drug agencies also need to improve on their attitude and efficency to treat passengers with respect.
Ticket cost and taxes in different names - those hefty taxes paid as part of cost of travelling make the by air travel more unattractive to me as an Active Tax Payer
Former disqualified Prime Minister Yousaf Raza Gillani had been sentenced to jail because of illegal recruitments in PIA during his tenure as Speaker National Assembly (1993-96).
In a speech after his taking oath as PM, Mr Gillani claimed "if giving recruitments to people is a crime, the we will always continue to repeat this crime!"
Due to overstaffing during PPP regimes PIA has archived the record of highest employees-to-aircrafts ratio in the world when a few thousand jiyala parasites survive on the taxes of millions of Pakistani taxpayers.
@ PTI Trolls Most of the PTI trolls are still living in Utopia as they have absolutely no idea or concept of Governance. They survive only on cricketing and betting. It's been over 12 days when KPK Assembly was summoned to let Pervez Khattak take oath and then Khattak got his 3 female relatives elected on reserved seats. But PTI and it's coalition allies are still wheeling-dealing on ministries and the formation of government is still a far cry in KPK! On the other hand, the PMLN governments in the Centre and Punjab have been formed and have started functioning. Airline industry revolution was founded in Pakistan by PMLN during early 1990s through open skies policy and the establishment of private sector airlines offering affordable travel to millions of Pakistanis. During 1997-99, Shahid Khaqan Abbasi had turned around PIA when it started making profits. Imran Khan was just a cricketer till then! But the likes of Dictator and his NRO-beneficiary have brought PIA down to its knees. We hope that PMLN will revive the national flag carrier!
Pakistan Govt should give one 'Point' to any foreign carrier as PIA is given One in there country, Like PIA got Dubai, Emirates should either get KHI, LHE or ISB. PIA got three Points in UK, ie London, Manchester and Birmingham, so can British Airways has option for Three in Pakistan, there choice. This way Pakistani Airlines will get more business and more destinations. Somebody is going to get rich when buying equipments for PIA. Tam Tam ke baat hai.
Thank You Imran Khan, because you are on opposition this has happened. And shame on you Nawaz Sharif, you are in opposition in KP and even the cabinet has not been formed as yet !
Soon we'll be hearing news of PIA being privitised and like MCB it'll be done at throw away price but no suo mottos this time :)
@John the Baptist: @fahd:
NS implemented this policy during his first two terms, you know, when IK got together with Hamid Gul to bring down BB's second government and threaten Abdul Sattar Edhi after which he had to leave the country. This policy goes that far back. Really shouldn't talk about stuff you don't know the first thing about.
It is nice step by PML-N government to create a new division to look after the affairs of Civil Aviation Authority (CAA), Pakistan International Airlines (PIA) and the Airport Security Force (ASF). Hope that it will benefit PIA and CAA particularly. "Open Horizon" policy is good and can play a major role in uplift of aviation services in Pakistan.
So it begins. Nepotism and unfair appointments lead PIA to this point in the first place. Although in principle separating these divisions from defense is a good thing.
People cry about over employment in Pia but they dont know that the salaries for all employees of PIA account for about 12% of the total expenses where as fuel expense is as high as 60% whereas the industry norm is 30% . PIA needs newer planes , average age of PIA fleet is around 25 years. Even if you reduce half the workforce in PIA it wont do any good unless PIA get rid of all the A310s and B743 Jumbos
@Affan: I think you will be satisfied once the entire aviation sector is put under control Army Chief of Pakistan. Because most of the people think that it is the only functioning asset. Sorry Sir you are wrong they have hurt your country the most
remove the federal taxes and duties for 5 years.. terminate the useless and overcrowded staff.... PIA will grow again.
@jibran: And look where MCB stands today. One of the biggest lenders.
I guess he will do the same to PIA as he did to the Muslim Commercial Bank.
This is old wine in a new bottle. ASF, CAA and PIA used to be under regulatory control of Aviation Division in Ministry of Defence in 1980s and were looked after by two Joint Secretaries. Aviation Div was abolished somewhere in 1990s for austerity reasons. Now they're reverting to same old redundant policy, so what's new in this?
Excellent decision
@Pro Bono Publico: hahaha, you guys have already wasted around 30 days in KPK, let alone implementing so called policies, your party hasn't even been able to form the cabinet!
@Billoo Bhaya: Sir, let's face it. We Pakistanis want to remain in the backwaters of development and competition. Biradari and sifarish has brought us to where we are today, which is an undeniable fact. How many employees want to work? How many are there for the joyride? All of them have some political cushion on which they are sitting comfortably. Employees cost per plane is the highest in PIA, with the result PIA is struggling to stand up and be counted.
Establishing the Aviation Division is a good move and will Inshallah, restrict the bureaucratic snags that lead to delay and dwindling market presence. Yes, what they will have to be look into microscopically, are the character, financial worth, and operating history of the applicants. Getting served bed tea in the morning is what we are continuing with every day. We must get up early, offer Fajr Salat and then make our own tea. Thanx and have a nice day. Salams
Actually, the reason why this is done is to ensure that no one can do to Nawaz Sharif what he did to General Musharraf in '99 - force him to relinquish his position while he is still in mid-air. With the aviation industry in the hands of the Defence Ministry, there was a high likelihood of 'aviation retaliation'.
The fact that the aviation industry is in bad shape is also a contributing factor to this change, but I'm not sure that it was the sole motivator for this change. Given the appointee's close nature to Nawaz Sharif, it is clear he doesn't want to take things for granted and leave the aviation industry in the hands of the Ministry of Defence.
PIA needs good management to resurrect itself. Just depending on buying more planes will not improve PIA's performance. The appointments in PIA are all political, so there needs to be an overhauling of the management organization. Saying that PIA will improve with more planes is just an excuse for more corruption in the procurement process.
@John the Baptist: nawaz sharif should change circular tires of his car because imran khan's car also has circular tires and NS is copying him. if its hot in june for IK it must be cold for NS otherwise NS is copying IK
Thanks to Imran Khan . I hope Nawaz Sharif takes more and more from PTI manifesto in order to improve the current system.
actually it was part of the 19th amendement on ministry re structuring and not a PTI policy lolz
@John the Baptist: Indeed PTI has announced this policy. Nawaz copied it, but see the conflict of interest in the new Aviation head.
PIA is should be run like a business entity and make it mean and lean organization. We have seen time after time when the political parties dump their supporters who may not be even qualified for some very unimportant jobs but were given some lucrative posts in PIA. Unions has to understand that if they will not cooperate with the revamping then they should be looking for other jobs, the whole world is there for their picking. The revamping not only includes new air crafts but cut the the employees aircraft ratio to the level of other successful air lines.Fire all those employees who are incompetent and not suitable for air line jobs specially the political hacks, they surely could do some thing else with their lives instead of leaching the airline. I know one person personally in NewYork who was givin this cushy job in PIA New York office by PPP, I would have not hired him for being a dog catcher of a town let alone give him that important position. And above all see to it that no one uses this airline like their property , pay as you go, no favors and upgrading the class.
Good Bye PIA, We Will Miss You Dearly.
Thank You Imran Khan and PTI!!! they were the first to bring up this issue and now the pmln has sensibly adopted it. I hope they also abolish ministry of railways like pti had promised. Imran khan is still in government despite being in opposition!!
@Billoo Bhaya:
without competition there will be no incentive for the PIA to improve. it'll keep losing billions and being ok with it.
@Henry:
Why just foreigners? What has Pakistani people done to be served alcohol should they desire? Isn't that what customer service is all about?
Thanks for implementing the PTI agenda.
great start.everything should be market based.if PIA dies because of its stupidity & wasteful management,so be it !!
Open skies has caused Pakistan to loose millions in foreign exchange with ME carriers taking away dollars and has prevented airlines like Shaheen and Airblue to expand and hire more Pakistanis. Why dont they allow Arabs to take over businesses the Sharifs own?
Does the term conflict of interest mean anything to anyone nowadays? Why would a person who owns a company dealing in Airport Services be given this portfolio. Guess Royal Airport Services will be Royal Airlines by the end of this tenure with all the major routes.
@Billoo Bhaya: What you are advocating is called protectionism. Instead of protecting inefficient state owned organizations like PIA we need to bring in private sector management and reform PIA with the aim of turning it around and eventually privatizing it within a few years.
@Billoo Bhaya: India used to have a similar approach by thinking that Open Skies will hurt Air India. At some point though it was realized that civil aviation policy should be for benefit of the whole country not just one company. .
When India had not gone for open skies, a lot of the workers - particularly in middle east were chained to Air India and had to pay artificially high prices to get to India. It also made flying to India more expensive for tourists making our tourism industry less competitive. Open skies policy has indeed hurt Air India but it has helped India which is more important.
Pakistani civil aviation policies too should consider benefit of Pakistan as a country rather than just PIA.
If nawaz sharif wants to save PIA he should allow alcohol to be srved to foerigners on international,flights.
If it happens like this, then I am sure PIA which is a 3 star airline will may at the end achieve 5 star rank INSHALLAH.
What is the name of new division which will be directing/supervising CAA, PIA and ASF?
Open skies did more damage to PIA than all the mismanagement that has occurred since. We need to curtail the onslaught of ME Flag Carriers flying into every city of ours and make it a more reciprocal and equivalent airline relationship. But I doubt if that is what PMLN will do.
Well done Nawaz Sharif!