CAA TO CUT THEIR LOSSES
The international passenger traffic from Pakistan has decreased by 30 per cent during the last few months.
By SYED M. ASLAM
Feb-11 - 17, 2002
The decision to use the Karachi International Airport as a logistic transition point by the US for its operations in Afghanistan prompted many a loud headlines in the Pakistani press, particularly vernacular. Are the premises of the older part of the Airport been handed over to the US-led forces and the dreaded FBI? News of the US military and intelligence personnel staying at two hotels within the vicinity of the airport and the beefed up security in the area also gave media all sorts of ideas.
Is the Airport being handed over to the US? The Deputy Director General Operations of the Civil Aviation Authority, Air Vice Marshall Arshad Rasheed Sethi, told PAGE that the US is allowed to use the Airport purely on commercial basis like any other airline. However, the arrangement "is not government-to-government kind of operation but rather a purely commercial one where due billing process will be followed."
The use of the Airport will help us improve our revenues, both from aeronautical and non-aeronautical charges, which took a serious battering due to closure of operations by twelve of the total eighteen airlines serving Pakistan after September 11. The situation further worsened when India withdrew overflying right to the national carrier PIA resulting in a similar measure by Pakistan eroding CAAís revenue from use of national airspace by Indian Air Lines and Air India."
It may be mentioned here that Air India was using the Pakistani air space for some 200 flights each month while Indian Airlines was using it for 90 flights every month prior to the ban imposed by Pakistan in a tit-for-tat measure. CAA is losing Rs 7 million a month alone in route navigational charges as the two Indian airlines are not allowed to use the national air space since January 1.
Asked what amount of revenue CAA is expecting to generate from the US operations out of the Karachi Airport, Sethi said that it will depend on the frequency of the flights and the weight of the aircraft. "While it is not possible to make a calculated guess the CAA certainly will be generating a substantial amount of revenue, both aeronautical and non-aeronautical.
"The decision of the US to use the Karachi Airport will help CAA cut it losses due to the reasons listed above. The situation has already started to get better as many of the airlines which closed their operations after September 11 have resumed operations even if it is on reduced frequency."
While the situation is getting better, Air Vice Marshall Sethi told PAGE that CAA is losing a substantial revenue of $3 million a month, three-fourth of it in aeronautical charges alone the bulk of which comes from Route Navigational, or overflight, charges. "Prior to September 14, when Afghanistan closed its air space, the frequency of overflights using the national air space was an average of 270 overflights a day. The number of overflights dropped to as low as just 50-60 a day afterwards but has now risen to an average 100 a day. While we expect the situation to improve with the passage of time to ultimately resume the previous level we are certainly welcome the recent developments to help cut our losses."
While route navigational charges make up the biggest portion of the $ 3 million loss that the CAA is incurring at present, it is also losing a sizeable amount in another aeronautical-related revenue — the landing and housing charges. It is also losing a substantial revenue from such non-aeronautical charge as embarkation fee (which is collected by the government and is later reimbursed to the Authority) and the usage of facilities at the airport.
"CAA is losing between $ 1-1.5 million a month in route navigational charges, between $ 500,000 to $ 750,000 a month in landing and parking fee and between $ 200,000-250,000 a month in embarkation fee. Aeronautical-related revenue from Route Navigation and landing and parking make up about two-thirds or about $ 2 million of the total $ 3 million that the CAA is losing every month. On the other hand, non-aeronautical-related revenue like embarkation fee and usage of airport facilities is depriving the CAA a revenue of about $ 1 million a month."
Sethi attributed the substantial loss in aeronautical revenue, both from overflights and landing and parking, on the lesser frequency of flights by foreign airlines due primarily to a substantial drop in international passenger traffic. He attributed the drop in international passenger traffic from Pakistan to a single factor — the non-availability and issuance of visas and a much stricter travel restrictions to the Pakistanis at present. "The international passenger traffic from Pakistan has decreased by 30 per cent during the last few months."