The Competition Commission of Pakistan (CCP) has released the draft report titled “Competition in the Skies: Pakistan’s Civil Aviation Market Assessment”, a comprehensive, evidence-based study evaluating nearly two decades of data (2006–2025) along with extensive stakeholder consultations.
The study provides a detailed competition assessment of Pakistan’s civil aviation sector and the challenges it faces. To address these challenges, the study calls for a National Civil Aviation Roadmap and a phased Reform & Stabilization Plan to build a resilient, investment-ready ecosystem.
This plan would integrate air travel, tourism, financing, and commercial services while ensuring regulatory clarity, competitive neutrality, financial sustainability, and strategic policy coordination.
Key priorities include modernization of Karachi and Lahore terminals and secondary airports such as Skardu and Gilgit, implementation of e-gates, digital slot allocation, a unified aviation data hub, and real-time IBMS reconciliation, guided by demand-based and fiscally prudent planning.
During the review period, Pakistan’s civil aviation sector served nearly 340 million passengers, with annual traffic increasing from 12.8 million in 2006–07 to 24.3 million in 2024–25, representing an 89 percent growth. This reflects a moderate overall compound annual growth rate (CAGR) of approximately 3.42 percent over 19 years.
However, the growth was almost entirely driven by the international segment (CAGR ~5.46 percent), while domestic traffic remained nearly stagnant (CAGR ~0.19 percent). Although passenger volumes have expanded, the sector’s structural depth and competitive strength have not kept pace, particularly in relation to Pakistan’s population growth and long-term economic potential.
The report concludes that Pakistan has lacked a unified national aviation vision, treating civil aviation primarily as an administrative function rather than a strategic economic sector. The CCP stated: “Civil aviation cannot be governed in silos.”
The study highlights several structural gaps, including the absence of an integrated national aviation strategy, fragmented governance, and policy inconsistency across regulatory, fiscal, and financial institutions. Other challenges include domestic market stagnation relative to international growth, frequent airline exits, financial fragility among local carriers, weak aviation-specific financing frameworks, underutilized airports, increasing reliance on Gulf-based carriers, and competitive asymmetry arising from regional macroeconomic differences and state-backed players.
The report stresses that civil aviation is crucial for economic connectivity, trade, and mobility. Regional tensions and restricted airspace in Pakistan and neighboring hubs further underscore the country’s vulnerability, highlighting the need for a strategically strong and self-reliant domestic civil aviation sector instead of overdependence on foreign carriers.
The report also recommends aviation- and tourism-specific financing and insurance, predictable foreign exchange and fee policies, tax rationalization, self-sustaining airport commercial operations with strategic private participation, evidence-based bilateral engagement, domestic capacity building, promotion of low-cost carriers, SME participation, ancillary services, and development of local maintenance, repair, and overhaul (MRO) facilities to restore competitive balance and strengthen the domestic aviation ecosystem.
The report emphasizes that competitive neutrality is essential, historical privileges should be reassessed, market entry must remain open, and strategic oversight of critical aviation assets must be retained.
Collectively, these measures aim to transition Pakistan’s aviation sector from mere volume growth to structurally resilient, competition-driven development.