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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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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
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. |
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