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Greater role to the private sector

International Airlines grabbing a major share out of the growing market in Pakistan

 May 21 - Jun 03, 2001

The opening of the newly built terminal at Lahore Airport in the first half of the coming financial year is expected to open new chapters in the aviation business of the northern part of Pakistan.

The policy of the government to assign a greater role to the private sector to achieve the economic goals set by the present government may also reflect in the aviation business in Pakistan in the days to come.

Altaf Hussain, Federal Minister for Privatization has already indicated to put the national carrier into the private hands sometimes next year. Ahmed Saeed, Khurshid Anwer, newly inducted Managing Director and Chief Operating Officers respectively have however accepted an uphill task to bring the national carrier back on the track in financial and administrative terms. Currently, the company faces financial liabilities running in billions of rupees, the national airline however has the capacity to overcome its financial problems especially having the privilege of protected business on various profitable routes.

On the foreign airlines front, whatever the reasons may be, many of the International Airlines which had quit their operations from Pakistan are willing to resume their suspended flight operations specially on Lahore or Islamabad and Northern part of the country.

The new terminal almost ready to open its smooth strips and its prestigious building complex may help bring those International Airlines who had quit their operations, back to Pakistan.

Most of the European Airlines, it may noted had ceased to operate from Pakistan mainly due to what they said the higher cost of fuel and landing charges and cut throat competition affecting their profitability. However there were some other reasons which led to this extreme decisions. The biased and subjective attitude of foreign media which had blown out of proportion the law and order situation in Pakistan which was one of the major reasons for departure of most of the foreign airlines.

Those airlines remained unmoved of the propaganda against Pakistan are still doing business in Pakistan. This country having a growing aviation market with an average growth rate of 12 per cent both in passenger and cargo traffic is a source of attraction of many other International Airlines which have expanded their flight operations from Pakistan and claiming a large share of the market.

Prominent among those airlines which have expanded their business operations in Pakistan are Swiss Air, newly arrived Cathay Pacific and existing foreign airlines such as Saudi Airline, Emirates Airlines.

On the other hand, the government has already addressed those issues, which were stated to be the source of concerns for the International Airlines. These problems were including higher price of aviation fuel, airport and handling charges adversely affecting the commercial viability of the airlines operating from Pakistan. The present government has not only rationalized the airport handling charges but price of jet fuel (JP-4) has also been substantially reduced.

Recently, Hong-Kong based Cathay Pacific Airways has announced yet another package from Karachi to Los Angeles and San Francisco in the USA. The new package offered by Cathay starts from May 15 and would be valid till December 31, 2001. They have taken this decision at a time when several International carriers as already stated have called off their operations from Karachi.

The latest move on the part of Cathay is indicative of the confidence it has in the growth potential in the Pakistan market. Cathay is operating three times a week from Karachi via Hong Kong; the passengers will be entitled to three free coupons for any destination of their choice in the US. One night stopover is also available on a return trip, the new package offers.

Cathay Pacific Airways, which started its thrice-weekly service to Karachi via Bangkok from September 2000, has done well during the eight months of its operations to Karachi. The load factor, which remained around 35 per cent during this period, touched over 50 per cent last month, which was very satisfying for the airline.

The traffic growth and revenue yield by the airline from the very next month of its operation to Karachi i.e. October last year was on a breakeven point and now it has started making profit.

The service between Karachi and USA would be operated through Airbus Industrie A330-300 with an enhanced cabin featuring greater legroom. The aircraft is designed to carry 44 passengers in the Business Class and 267 passengers in the Economy Class.

The service should be highly popular not only among the business travellers but also for the holidaymakers and the Pakistani students. By operating thrice a week service on the route Cathay claims of confirming its commitments for providing quality service to the people of Pakistan.

Cathay feels that there is a tremendous demand on this route and will become one of the most popular services in Cathay's network because of commercial viability in nature.