commonly known as PIA, is the flag carrier airline of Pakistan. The airline, with its head office on the grounds of Jinnah International Airport in Karachi, operates scheduled services to 24 domestic destinations and 39 international destinations in 25 countries across Asia, Europe and North America. Its main bases are at Karachi, Lahore and Islamabad/Rawalpindi. PIA has been ranked as a 3-star airline by Skytrax, the world's official airline and airport reviewer.
The airline's secondary bases include Peshawar, Faisalabad, Quetta, Sialkot and Multan, from which it connects the metropolitan cities with the main bases, the Middle East and the Far East. The airline is owned by the Government of Pakistan (87%) and other shareholders (13%). It employed 18,043 people as of May 2008.
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Pakistan International Airlines Corporation (Urdu: پاکستان بین الاقوامی ایئر لائنز), commonly known as PIA, is the flag carrier airline of Pakistan.[2] The airline, with its head office on the grounds of Jinnah International Airport in Karachi,[3] operates scheduled services to 24 domestic destinations and 39 international destinations in 25 countries across Asia, Europe and North America.[4] Its main bases are at Karachi, Lahore and Islamabad/Rawalpindi. PIA has been ranked as a 3-star airline by Skytrax, the world's official airline and airport reviewer.[5]
The airline's secondary bases include Peshawar, Faisalabad, Quetta, Sialkot and Multan, from which it connects the metropolitan cities with the main bases, the Middle East and the Far East. The airline is owned by the Government of Pakistan (87%) and other shareholders (13%). It employed 18,043 people as of May 2008.[citation needed]
History
'Pakistan International Airlines', or 'PIA' for short, can trace its beginnings to the days when Pakistan was not a nation, rather a region of British India. In 1946 Muhammed Ali Jinnah realised the need for an airline network for the forming country and called upon the help of an industrialist Mirza Ahmad Ispahani to develop a flag carrier for the nation. Meanwhile, an airline called 'Orient Airways', registered in Calcutta, was formed on 23 October 1946. In February 1947, the airline brought three DC-3 airplanes from a company in Texas, and in May of that year the airline was granted a licence to fly. Services were started in June from Kolkata to Sittwe and Yangon. This was the first post-war airline flight by a South Asian registered airline company.[citation needed] Two months after this service began, Pakistan was formed. Orient Airways began relief flights to the new nation and, soon after, it moved its operations to Karachi, where it began flights to Dhaka on 7 June 1954. In addition, the first two domestic routes in Pakistan were established, from Karachi to Lahore to Peshawar, and from Karachi to Quetta to Lahore.
The Government of Pakistan, realizing the operation was failing economically, proposed that Orient Airways merge into a new national airline. On 11 March 1955, Orient Airways merged with the government's proposed airline, becoming 'Pakistan International Airlines Corporation'. During the same year the airline opened its first international service, from Karachi to London Heathrow Airport[6] via Cairo International Airport and Leonardo da Vinci Airport in Fiumicino, Italy, using three newly-acquired Lockheed L-1049C Super Constellations. The DC-3s continued operating the domestic services in Pakistan. In May 1956, PIA ordered two further Super Lockheed Constellations of the latest L-1049H version and five Vickers Viscount 815. In 1959, Malik Nur Khan was named Managing Director.
In March 1960, PIA became the first Asian airline to use jet aircraft when Boeing 707 services were introduced. [7] The aircraft were wet leased from Pan American and in 1961 services were begun to John F. Kennedy International Airport in New York City. In 1962, orders were placed for Boeing 720s, Fokker F27s and Sikorsky helicopters. One of PIA's Boeing 720s broke a world record that year, when it flew from London to Karachi non-stop in 6 hours and 43 minutes and 51 seconds[7] during its delivery flight[citation needed]from Seattle, piloted by PIA's senior Captain Abdullah Baig, a record unbroken to this day.[7] During 1962, services to East Pakistan (now Bangladesh) were proving to be difficult, therefore PIA placed their Sikorsky S-61 helicopters on these routes until 1966 when conditions improved. In 1964 PIA became the first airline from a non-communist country to fly to the People's Republic of China.[7] As the Indo-Pakistani War of 1965 broke out, PIA helped the Pakistani Armed Forces with logistics and transport. In 1966, the Viscounts were phased out, substituted by four Hawker Siddeley Tridents. However, as growth surpassed the need for these aircraft, they were later sold to Civil Aviation Administration of China.
The 1970s saw the resumption of transatlantic flights and new destinations. It once again aided the Pakistan Army by transporting soldiers to East Pakistan in the Indo-Pakistani War of 1971[8] and lost a couple of its aircraft to Indian Air Force fighters.[9] In 1972 it applied to operate to Libya and an agreement was signed with Yugoslav airline JAT. In 1973, McDonnell Douglas DC-10s arrived and were used by the airline before they were replaced by Boeing 707-300s. In 1974 air freight services started, as well as a cargo service to New York City under the name, 'Pakistan International Cargo'. In 1975, PIA introduced new uniforms for air hostesses. These uniforms were chosen through an open competition, the winning entry was a design by Sir Hardy Amies who was designer to Her Majesty Queen Elizabeth II.
In 1976, leased Boeing 747-200Bs came into service. In 1979, the airline bought their first Boeing 747-200BM aircraft. Also in 1978 the airline provided help to Somali Airlines, Air Malta and Yemenia and established a hotel management service in the United Arab Emirates. PIA leased two of its own Boeing 720s to Air Malta during the 70s.
The 1980s began with the opening of a cargo centre in Karachi and the delivery of a new aircraft, Airbus A300B4-203. In 1981, a duty-free sales service was inaugurated. During 1982, the first C and D checks were carried out on the fleet in Karachi. In 1984, domestic night coach fare service was introduced to offer lower prices for low-income passengers. In 1985 the PIA Planetarium tourist attraction was inaugurated in Karachi and later in Lahore. In the same year, five Boeing 737-300s joined the fleet making PIA the first Asian operator of such a type. Two former PIA Boeing 720Bs now form part of the Planetarium's exhibition at Karachi and Lahore. In late 1987 and early 1988, flights were introduced to Malé and to Toronto Pearson International Airport, respectively. In 1989, the first women pilots started their career on passenger airplanes.
During June 1991, PIA received the first of six Airbus A310-300 aircraft on from Airbus Industrie. In 1992, flights started to Tashkent and in 1993, to Zürich, Switzerland. In addition, PIA became a user of the Sabre, Galileo and Amadeus global distribution systems. During 1994, PIA added Jakarta, Fujairah, Baku and Al-Ain to its destinations. Air Safari flights were launched in the same year using Boeing 737–300 aircraft over the Karakoram mountains. In 1995, PIA received a Boeing 747 flight simulation system and a used Air France A300 aircraft was bought. In 1996 the airline leased Tupolev Tu-154 aircraft, and re-opened services to Beirut.
PIA only used the Tupolev Tu-154 for a short time to deal with the demand during the summer of 1996. In 1999, PIA leased five Boeing 747–300 aircraft from Cathay Pacific to replace its aging Boeing 747-200M fleet. The aircraft wore a new livery with a handwork Pashmina tail on white body and large Pakistan titles on the front fuselage. The livery was applied to some of the fleet during the 90s but due to copyright problems the livery was dropped. The Boeing 747-300s remained in the new look but with a plain green tail with PIA titles. The other aircraft in the fleet were repainted in the 1990s livery.
Expansion
n July 2002, PIA purchased six Boeing 747-300 aircraft from Cathay Pacific, five of which were already on lease with PIA. The sixth arrived shortly after and PIA operated it mainly on its North American and European routes. In October 2002, after a period of ten years without any new order, the airline purchased eight Boeing 777 aircraft from The Boeing Company, including three 777-200ER (Extended Range), two 777-200LR (Longer Range) and three 777-300ER versions. PIA was the launch customer that revived the Boeing 777-200LR project that, until then, only had three orders by EVA Air. The first two Boeing 777-200LR produced were test aircraft used by Boeing, before they were delivered to PIA. One of these Boeing 777-200LR was displayed at the Paris Airshow during 2005.
During 2004, PIA took delivery of its first Boeing 777-200ER aircraft in January. On delivery of the first three Boeing 777-200ERs the airline introduced a new aircraft livery, which was later applied to the majority of the fleet. PIA also acquired six half life Airbus A310-300/ET from the Airbus management on a ten year lease agreement. On 3 November 2005 PIA signed an agreement with the aircraft manufacturer, ATR to purchase seven ATR42-500. The aircraft were purchased to replace the aging F-27 aircraft. The seven ATR aircraft were delivered between 2006 and 2007.[citation needed] On 6 December 2005, PIA leased an additional new Boeing 777-200ER from the International Lease Finance Corporation (ILFC). The aircraft had the same specifications as the previous Boeing 777-200ER that PIA operated. The aircraft was delivered in January 2007 on ten year lease to the airline.
On 25 February 2006 Boeing delivered its first 777-200LR Worldliner to PIA, where it flew from Everett to Islamabad via Manchester, England. PIA started non-stop flights from Toronto to Karachi, Islamabad and Lahore from 3 March 2006 taking advantage of Boeing 777-200LR's long range capability. PIA planned non-stop flights to New York City and other US cities with sizable Pakistani population centres, but was not given permission due to security reasons. On 31 May 2006, PIA took delivery of its first ATR aircraft from Toulouse, France. On 23 December 2006, PIA took delivery of its first Boeing 777-300ER. After the arrival of a second ATR 42–500, PIA has ceased using military Lockheed C-130 Hercules for passenger services in the north of Pakistan. The military planes were being used after the Fokker F27 fleet was grounded due to a fatal crash in July 2006.
On 5 March 2007, the European Commission, following an on-site visit,[11][12] banned all but eight planes of PIA's 44-plane fleet from flying to Europe citing safety concerns. PIA was included in the List of air carriers banned in the European Union.[13] The remaining eight, namely the fleet of Boeing 777s, has been exempted from the ban.[14] PIA claims that this is discriminatory and the bans are not justifiable[citation needed]. On 26 March 2007, Tariq Saeed Kirmani resigned after severe pressure from higher authorities because of the EU ban[citation needed]. Zafar Khan was appointed as the new chairman of Pakistan International Airlines. A team from the European Union visited Karachi in July 2007, to check the condition of the planes and review the ban. On 5 July 2007, the EU lifted the restriction on 11 aircraft that PIA could fly into Europe, of which five were Boeing 747-300s and six Airbus A310-300s[citation needed] On 29 November 2007, The EU completely lifted the ban on PIA.[15] In the same year, PIA signed a lease deal for seven new Airbus A320-200 from Kuwait based leasing company ALAFCO, the factory built aircraft were to be delivered between 2009 and 2010, however the deal however was cancelled in 2008.
During April 2009, the management decided to launch a long-term ‘Business Plan of PIA’ including purchase of new aircraft with details of the plan being finalised.[16]
Corporate management
Structure
Pakistan International Airlines Corporation (PIAC) is majority owned by the Government of Pakistan (87%) while the remainder (13%) by private shareholders. The airline falls under the direction of the Ministry of Defence chaired by its current chairman, Ahmad Mukhtar. The airline is managed by managing director, as well as the Board of Directors. The Board consists of nine independent non-executive members and has four sub-committees, being an Audit Committee, Brand and Advertising Committee, Finance Committee and Human Resource Committee each with its own charter and chairman. The MD leads the executive management of staff who control the running of the airline. The airline's main headquarters are located in Karachi whilst smaller sub head offices are located in several cities within Pakistan.
[edit]Privatisation
PIA offices in Lahore
In the late 1990s, the Government of Pakistan considered selling the airline to the private sector due to the persistent losses suffered by the airline.[citation needed] The Government announced the privatisation plans but they were never implemented. Several steps towards outsourcing of non-core business have been initiated. Catering units (starting with Karachi Flight Kitchen), ground handling (starting with ramp services) and engineering, are to be gradually carved out of the airline and operated as independent companies. During 1997, Pakistan called in a team from International Finance (IFC), the consulting arm of the World Bank, to advise on restructuring and privatisation of Pakistan International Airlines (PIA) however no agreement was reached.[17] The government has many times planned the privatization of the State owned. however as of yet no reasonable agreement or solution has been found. On 18 February 2009 the carrier was dropped from the privatisation list.[18]
[edit]Financial performance
The following table gives the key financial results for the 2009 financial year along with those for the past five years.[19] The airline reported a reduction of post tax losses of 83% in 2009 (compared to 2008) based on a reduction in fuel cost, comparatively stable exchange rate for the Pakistan Ruppee and higher revenues. The exchange losses due to declining Ruppee rate were reported to be PKR 6.71 billion in 2009 compared to a whopping PKR 24.12 billion in 2008.
The airline also faces other challenges to its profitability such as staffing levels and overall management challenges. An employee count of 17,944 for a fleet of 40 aircraft [19] is clearly an area that needs to be reviewed.
Revenues [19]
Year Revenues (Rs. Million) Profit/(Loss) (Rs. Million) Employees (Ave.)
2009 94,564 (5,822) 17,944
2008 88,863 (36,139) 18,036
2007 70,481 (13,399) 18,149
2006 70,587 (12,763) 18,282
2005 64,074 (4,412) 19,263
2004 57,788 2,307 19,634
The current year interim results (half yearly report for 2010) [20] do not show any improvement in profitability. The after tax losses reported for the first six months of 2010 are PKR 6.90 billion as compared to PKR 5.39 billion for the first six months of 2009. Revenue, however, did increase to PKR 49.31 billion for the first half of 2010 compared with PKR 41.92 billion for the first half of 2009.
Passenger traffic has been more or less static over the last five years hovering around the five and a half million mark with a load factor of around 70%.
Passenger Traffic [19]
Year Revenue Passengers (Million) Passenger Load Factor Average Passenger Stage Distance (Statute KM)
2009 5.535 70% 2,510
2008 5.617 71% 2,479
2007 5.415 67% 2,527
2006 5.732 69% 2,639
2005 5.499 70% 2,638
2004 5.120 66% 2,641
It is interesting to look at the annual revenue breakdown for 2009: 89.4% is from passenger traffic with just 5.3% from cargo. The remaining 5.3% is from excess baggage charges, charter, engineering and other services.
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