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The
Aviation Sector
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The Aviation
Sub-Sector operates with an undefined strategy and vague
polices. The overall quality of its services is sub-standard
in comparison to more successful airlines in other countries.
Airlines, airports and associated facilities are managed
haphazardly. A core issue is the pricing of the services that
doesn't reflect the value of the services offered. This
underscore the lack of competitiveness in the sector and
failure to maximize revenue. The lack of aviation sub-sector
focus on customer satisfaction is acutely disappointing. In an
era where customer services orientation is the basis for
success, the absence customer-centered services in this sector
is an alarming phenomena. | |
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Aviation though, being the most capital-intensive business, is a
major contributor to the national exchequer. It, therefore, deserve
the most care and protection if positive impacts on the economy are
to be brought. |
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Group
Coordinators |
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1. |
Air Vice Marshal Zulifqar Ali Shah
Deputy Director General
Civil Aviation Authority, Pakistan |
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2. |
Mr. Abdul Rauf Tabani
Vice Chairman
Aero Asia International (Pvt.) Limited. Pakistan |
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April
20, 2001 |
Draft
Transport policy is submitted from review. Click
here to read.
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Civil Aviation
- The regulatory responsibility should be entrusted exclusively to the CAA while Airport Development Authority (ADA) should provide the aviation infrastructure and services.
- Major new airport projects planned for Lahore and Islamabad will entail additional financial burden for CAA, which is still saddled with the repayment on the Karachi Airport.
- Competition between PIA and other Pakistani private airlines on international routes need to be avoided.
- The landing and fuel charges need to be brought at par with the neighboring countries.
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Key
Issues Addressed
- Need for secondary and feeder airports and services growth in
response to economic demand rather than political demand.
- Too low domestic fares.
- Need for improvement of existing airports in line with the
traffic demand
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Recommended
Policies
- Encourage private sector participation in airport development.
- Deregulate fares to permit operators to set their own fare
structure.
- Increase the quality and capacity of operations on the primary
domestic routes.
- Permit second tier aviation for operating services on
secondary and feeder routes.
- Examine cargo handling facilities and procedures at Karachi
airport.
- Examine the appropriate institutional arrangement for GOP
supervision of civil aviation including transferring
responsibility of Civil Aviation Authority and Pakistan
International Airline from Ministry of Defense to Ministry of
Communications
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Civil Aviation
The passenger and cargo air traffic has been stagnant in the past 5-6 years and is unlikely to increase much in the near future. With de-regulation of the domestic sector and "selective open skies" policies adopted during the 90s, the national carrier, PIA is facing stiff competition, and has been intermittently accruing substantial losses.
Major international airlines have stopped routing through, and operations to Pakistan primarily due to high landing and fuel charges viz-a-viz neighboring airports, especially Dubai as well as grant of fifth and sixth freedom rights to a few international airlines.
Only 4 out of 40 airports under the Civil Aviation Authority (CAA) are self sustaining and CAA is currently running a deficit of around
Rs. 0.700 billion per year. Major new airport projects planned for Lahore and Islamabad will entail additional financial burden for
CAA, which is still saddled with the repayment on the Karachi Airport.
CAA also plays conflicting role of a regulator and service provider simultaneously, which is against the established norms and has been the source of many of the industry's ills. There is pressing need to separate the regulatory functions from service provider. The regulatory responsibility should be entrusted exclusively to the CAA while Airport Development Authority (ADA) should provide the aviation infrastructure and services.
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Undefined
Strategies and Policies
The sub-sector operates with an undefined strategy and unclear
policies. Although the aviation sector has been opened up private
sector participation as a matter of policy, there are other barriers
which keep the private sector participation limited and curtail the
participation of those who are engaged in the provision of aviation
services in the country. |
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Monopoly of PIA
The growing monopoly of the PIA has not served to improve the level
of service in the aviation sector. The overall quality of service,
being provided by the main public sector airline has deteriorated
over the years and in an age where customer service orientation is
judged as the basis for commercial success, the absence of
customer-centered service in the aviation sector is an alarming
phenomenon. |
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Poor Management
Airports and associated facilities are managed haphazardly. Most
local airports have low financial viability, and have severely
limited capacity for managing air services at major airports during
peak hours. There is need for secondary and feeder airports and the
need to service growth in response to economic demand rather than
political demand. |
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Customer Services
Customer services training is to basic, not regularly performed and
doesn't seems to be integral part of any employees carrier
progression. Customer feedback is not effectively collected or acted
upon. |
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Lack of Engineering Facilities
Engineering cost is not managed towards a target and are likely to
be excessive. Stores and supply management is weak, resulting in
unnecessary surplus and redundant inventory. Existing engineering
resources are under utilized.
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The civil aviation sector in Pakistan is currently at a cross road. For different reasons, the passenger and cargo traffic has been stagnant in the past 5-6 years and is unlikely to increase much in the coming years. With de-regulation of the domestic sector and "selective open skies" policies, the national carrier, PIA is facing stiff competition, and has been running major losses-last known loss in FY 97/98 was 9 bil Rs. Only 4 out of around 40 odd airports under the Civil Aviation Authority (CAA) are making any money-the net deficit cannot be ascertained as CAA is under Ministry of Defence. Major airport projects in Lahore and Islamabad are going to cause financial burden to the public exchequer. |
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April
2001 |
The World Bank, in conjunction with MOC, NTRC is organising
a Transport Workshope from 24 to 26 April, 2001. Find
more click here. |
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