Business

Disgruntled: Association fastens seat belt amid Gulf penetration

Local airlines’ pilots join hands to protest open sky policy.

Saad Hasan August 19, 2015

A date for the huddle has yet not been decided but, in the meanwhile, industry executives have been asked to give their feedback. STOCK PHOTO

KARACHI: Fearing job losses due to the increasing penetration of Gulf airlines in Pakistan, the leading association of pilots has started to approach domestic airlines and other aviation businesses to put up a fight.

Pakistan Air Line Pilots’ Association (Palpa) has invited 13 organisations including Pakistan International Airlines (PIA), Shaheen Air, Airblue, Air Indus, Schon Air and flying clubs to come together for consultations, according to a letter written on August 13.

A date for the huddle has yet not been decided but, in the meanwhile, industry executives have been asked to give their feedback.

The Aviation Policy 2015, the brainchild of Aviation Advisor Shujaat Azeem’s team, has opened up the country’s airspace further for foreign airlines especially those owned by UAE states, officials said.

“Middle East airlines have been allowed to operate to Faisalabad, Multan and Sialkot. They have been given almost unrestricted access to Karachi, Lahore and Islamabad,” a disgruntled PIA official said.

Up till now, domestic airlines led by PIA, had been able to restrict the number of flights given to foreign airlines on the northern routes, including Lahore, Islamabad and Peshawar.

But from June 2015, the Middle East-based carriers have been allocated more frequencies - in some cases double the previous capacity.

PIA has for decades argued that these airlines have been enjoying access to wider markets year after year but Pakistani airlines have not been allowed any concession.

“The so-called reciprocal agreements with UAE and other Gulf countries leave us at a disadvantage. Those are city states and we get rights to just a specific market or city. In return they get the entire Pakistan,” another official said.

In addition to more flights, these foreign airlines have also been permitted to use any kind of jet, which means they can sell as many seats as they want.

A senior pilot of the airline remarked that competition has been made tough for PIA at a time when the national carrier is borrowing heavily to lease jets.

“Let’s just hope they have a plan because right now all we see is confusion.”

The aviation policy has also barred Pakistani airlines from using any aircraft, which is more than 12 years old. The move has already pitted Air Indus against the Civil Aviation Authority in the shape of proceedings in the Sindh High Court.

Published in The Express Tribune, August 19^th, 2015.

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COMMENTS (6)

Obaid | 9 years ago | Reply @shaikhmustafa: I think the private companies lack capital to expand their businesses and that is why they haven't done so. It's funny how you say the ME airlines have state support and it's a good thing while PIA has state support but it's a bad thing? The ME airlines are just better managed. Admit it. We haven't had a census in years so different people will give different numbers for the country's population. The 220 million number you are quoting is the highest I've seen yet!

Umair | 9 years ago | Reply Its survival for the fittest!! If these guys are soo good then they should work hard instead of lobbing..

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SF | 9 years ago | Reply ME airlines have placed order of 100s of aircrafts and they are also competing amongst themselves by offering new products and services. Privatisation and competition are in the interest of passengers and also for "competent" professionals. PIA accumulated losses has surpassed USD 1.2 billion and is funded by government by taking expensive loans. The nation will repay those loans. As a nation we do not support this practice! Why should we pay for the inefficiency of state owned white elephants representing themselves as a "national asset."

wasim ahmed | 9 years ago | Reply These pilots don't want expat Pakistani's to use get service and rates... they want to black mail govt.. they already sunk PIA due to this kind of behavior. I request govt to don't bend infront of these blackmailers... they want us to suffer for their benefits.. we want good service and more options to fly in and out of country...

Raheel | 9 years ago | Reply It is important to understand that you cannot simply cry your way to restrict good competition and force the consumers to accept a substandard level of local service and frail air crafts. It is the lack of good practices and minimum standards that you see domestic airlines flying obsolete and dated planes with Flintstones flying equipment and these simply result in tragedies. If your are wondering, these airlines are Indus Air, Shaheen and late Bhoja. Some of these still use Boeing 737-200 series. Are you serious! Proper funding is required, probably foreign investment and expertise to help fix this ailing and plagued industry with the help of fresh young blood. Experienced professionals working in this field need to pull their sock up and provide a proper level of service to internationally acceptable levels and work with proper professionalism.

shaikhmustafa | 9 years ago | Reply The damage sadly has been done already. Pakistan's aviation authorities just don't seem to understand that a liberalized aviation policy will just not cut it for Pakistan. We are a country of 220 million people and carriage of these passengers to and from Pakistan is a right of the airlines of Pakistan. Competition is always good but it should be checked. We must take a leaf out of the EU countries which have always been very protective of their indigenous airlines. This is not to say that any undue support should be granted to PIA or the other Pakistani carriers, the point is that there should a limit on how many flights foreign carriers are allowed to operate into our country. The govt. must decide whether it plans on developing the Pakistani airline industry or simply wants to let it sink into oblivion. People very conveniently park all the blame at PIA's door step without understanding the dynamics of the aviation business. PIA has had its fair share of self created problems but being in the public sector it has its limitations, there is only so much it can do. Had everything been PIA's fault then who has stopped the private sector from growing over the last 25 years since the time the first private airline was launched in Pakistan. Imagine a country of 220 million has at any given day not more than 35 operable airplanes for all three airlines put together i.e. PIA, Shaheen and Airblue. That explains the state of affairs the indigenous airline industry is into right now. It is the job of the regulatory authorities like the Pakistan CAA to develop an atmosphere which helps the overall industry grow, creating an environment which generates more employment opportunities, thereby generating more revenue, The CAA of Pakistan sadly just cares about its own well being, looking to award more rights to foreign carriers so that they can earn more by virtue of landing fees and other related aeronautical charges which run into the billions. Even countries like Canada, Germany, italy have put a lid on the Gulf carriers. These gulf carriers work on a totally different business model. You see when the state, airports and the airlines are all working under the same umbrella as is in the case with the UAE carriers then you will see Goliaths like emirates, qatar airways and etihad eating away other countries' airline business. CAA is a regulatory authority , it must do a cost benefit analysis of its policies. Why has private pakistan airlines not been able to sustain any long haul operations to UK,USA or any other point beyond the KSA and gulf, is PIA at fault for that too? Its the regulatory framework which has been designed in such a way that the foreign carriers benefit from it and the local carriers despite having the rights and the traffic cannot execute it on commercial grounds. The gulf carriers especially emirates as CEO of Air canada once said quote " Emirates is in the business of manufacturing seats" this tells you what their aim is, to take over the global airline business by leveraging upon their country's relations with other countries. UAE governments are know to lobby very effectively for their national airlines. Just imagine pakistan has declared Karachi an open skies city for entire emirate of Dubai. This means that any airline of Dubai which at the moment are Emirates and Fly dubai can operate any number of flights to KHI. Later if they have 20 airlines based in Dubai just imagine what will happen to KHI, there will be more flights between KHI and DXB than any other city pair any where in the world. The reason why the banking industry in pakistan grew was because of the state bank of Pakistan which formulated policies which helped the industry to grow. Unless the aeronautical authorities of Pakistan do something to arrest this dive the pakistan airline business is in now, nothing good will happen.

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