INDIAN AIRSPACE CLOSURE: IMPACT ON PIA
Finding alternate routes over a number of national air spaces resulting in increased flying time and fuel consumption
By SYED M. ASLAM
Jan-07- 13, 2002
Pointing an accusing finger at Pakistan has long remained the favourite pastime of the Indian rulers. The Indian passion for jingoism seem to have increased in the recent past with the rise to power of the coalition government Bharati Jananta Party, many of whose partners are ultra-Hindu nationalists.
This time around India has seen it fit to hurl war threats at Pakistan by implicating it in the complexities of the terrorist attack on the Parliament in New Delhi on December 13. Fourteen days later the Indian cabinet's Security Committee decided, among other things, to stop Pakistan International Airlines to use its air space.
Pakistan's reaction to the decision was swift and reciprocal. The decision would hurt India more than it would hurt Pakistan — forcing its national flag carrier Air India to altogether scrap or find alternative routes for 111 flights. On the other hand, the decision disregarding all legalities also poses problems to financially troubled Pakistan International Airlines (PIA).
PIA, reeling from an operation loss of Rs 1.3 billion, pre-tax loss of Rs 2.39 billion and accumulated losses of Rs 10.9 billion during the half-year ended June 30, 2001 has suspended 12 weekly flights to India, six each to Mombai and New Delhi. In addition, it has to find alternate routes to 13 other destinations in the Far-East which it used to serve weekly. The closure of operations within India and finding alternate routes will cost people money in loss business, increased fuel costs due to flying longer routes and air space fee over new corridors. The fact that Indian carriers, Air India and Indian Airlines, would be more severely affected makes the blow a little less painful.
Mercifully, PIA's most profitable sectors — Middle East and UK — would not be affected by the decision as none of them make use of the Indian air space. While finding alternate routes over a number of national air spaces resulting in increased flying time and fuel consumption would render serving destinations in the Far East no more cost effective, the airline has downplayed the impact saying that it not result in big monetary losses. However, one should be cautious not to let the optimism go to his/her head, particularly those responsible for formulating the policies of the airline which has managed to reduce its losses but yet remains in red in the half-year ended June 30 last year.
According to Annual Report of the PIA for the year ended December 31, 2000, the latest available full year accounts, Asia excluding Middle East and Africa accounted for about 13 per cent or Rs 4.7 billion of the total traffic revenue of Rs 37 billion. PIA has suspended flights to a number of destinations in the Far East including Dhaka, Colombo, Singapore, Tokyo, Jakarta, Kathmandu, Kuala Lumpur. As stated above it has also wrapped up its twelve weekly flights to India.
PIA has found alternative routes to Hong Kong and Bangkok via Beijing and has announced to start trial flights on these destinations on January 7. The alternate route will increase flight time to these destinations by as much as 45 and 60 minutes. While decision to continue using the alternate route depends on the success of the trial flights, it obviously would cost PIA extra money which will add up if it choose to serve other destinations in the region closed in the wake of the Indian decision. Exactly how much extra would it cost the airline is not known, however, one thing is certain that it would not be as minimal as it want to make us believe.
It is more alarming when one looks at the airline's annual reports over the last six years. The annual accounts show that the airline's operating expenses have risen much more sharply compared to the operating revenues — the former has increased by a much narrow margin of 54 per cent from Rs 25.4 billion in 1995 to Rs 39.2 billion in 2000 compared to almost 75 per cent increase in the later from Rs 24 billion to Rs 42 billion during the same period.
While PIA would be the direct victim of the recent designs of India-led confrontation, the Civil Aviation Authority would be its an indirect victim. The Deputy Director General Operations, Air Vice Marshall Arshad Rasheed Sethi, told PAGE that CAA is bracing itself for a Rs 7 million loss per month in Aeronuatical charges. He said that though CAA would also loose non-aeronautical revenue, they would be minimal compared to the huge monthly revenue losses.
He informed PAGE that the revenue loss will come from the stoppage of use of the Pakistani air space by Air India and Indian Airlines. On an average, he added, Air India was using the Pakistani air space for 200 flights per month while some 90 Indian Airlines flights was using it prior to the closure of the national air space to the Indian airlines in response to the Indian decision.
He said that CAA is not much worried by any revenue loss due to the temporary closure of flights on many destinations in the Far East 'as it will find alternate routes and as its aircraft will keep flying and landing on civilian airports."
He said that he is encouraged by the resumption of operations by many foreign airlines which closed their operations after September 11 last year. "Prior to September 11, 18 foreign airlines were serving the country, which declined to 12 after September 11. At present the number of foreign airlines serving Pakistan has increased back to 18 and we hope that many more airlines will come back when they announce the traditional six-month summer schedule starting in March."