Growing Competition in Aviation Industry is Posing Threat to PIA

The growing competition in the aviation industry is posing a threat to the national flag carrier, Pakistan International Airlines (PIA) Corporation Limited.

According to the documents available with ProPakistani, the Federal Cabinet, in the last month, approved the issuance of a Regular Public Transport (Airline) Licence to M/s Q Airways (Pvt) Limited for two years up to 21 January 2024, to conduct Regular Public Transport (RPT) operations in Pakistan.

Recently, the Aviation Division has written a letter to the company with regard to obtaining an Air Operator’s Certificate per the Air Navigation Order, within a period of two years commencing from the date of government’s approval (February 1, 2022, to January 33, 2024) to commence RPT operations and in this regard, coordinate with Airworthiness & Flight Standards Directorates, HOCAA, for further guidance.

In addition, M/s Q Airways (Pvt) Limited would be required to submit an amount equal to three billing cycles before the commencement of RPT operations as security against Civil Aviation Authority’s (CAA) dues. However, if the amount of their billing cycles is less, the security deposit already held with Pakistan Civil Aviation Authority (PCAA) shall prevail/override the amount of three billing cycles. This amount will be based on the submitted schedule operations to this Directorate. The revision in the conditions of the RPT license is in process, and after the approval of the Competent Authority, the same will be conveyed for retrospective implementation and compliance.

It is pertinent to mention here that PIA was among the 15 loss-making state-owned enterprises as its losses recorded Rs. 47.761 billion in 2017-18.

The single dominant factor that poses the biggest risk is the government’s ability given available fiscal space. to allow PIA to clean up its balance sheet by assuming the debt and liabilities. In case, this risk is not mitigated, the restructuring plan would fail to accomplish the ultimate goal of financial sustainability and operational autonomy.

On the other hand, the growing competition with British Airways and Virgin Atlantic on remunerative routes in the United Kingdom and with Air Blue, Air Sial, and other domestic airlines would impose additional obligations on PIA to improve its service, in-flight entertainment, fare discounts, and cargo rates rationalization.



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