AVIATION: NEW AIRLINES

 


By Syed M. Aslam
Dec 08 - 14, 2003

The competition for passenger air traffic is about to heat up once again for the benefit of domestic travelers with the granting of licenses to two new commercial airlines by the Civil Aviation Authority. Once again because four private airlines Bhoja, Hajvery, Safe and Raji wrapped up their operations years ago leaving the market open to the remaining operators the national flag carrier Pakistan International Airlines (PIA) and two smaller private operators, Shaheen Air International and Aero Asia.

While sources in the aviation industry seem to underplay the impact of the closures of all private airlines except the remaining two by saying that it helped to balance out the sharp decline in the passenger air traffic in the wake of 9/11, the fact remains that it deprived the air travelers of choose in more ways then one. The absence of choice also resulted in increased fares by the three remaining airlines which could not had been possible if the private airlines were still operative today. In addition, what could justify the increase in airfares if the supply has really been in excess of the demand as claimed by the sources?

The interest shown by the two new private airlines granted licenses itself proves that a certain niche of the market is still available for new operators. It also shows that the slump in the aviation industry is over, or at least nearing its end.

AIRBLUE

Royal Airlines (Pvt) Limited became the first airline to get the Registered Public Transport license under the new aviation policy in October last year while airblue was the second airline to get the license. However, airblue is in the final phases to start its operations in mid next month while Royal Airlines, which has successfully being operating chartered flights on domestic as well as to Dubai for last two-and-half years, has yet to finalise the details of its commercial flights dometically.

High placed sources in airblue informed PAGE that it has purchased three A-320 aircraft directly from the Airbus company on dry lease meaning that the entire cockpit and cabin crew as well as maintenance of the aircraft would be done by the airline itself. The cockpit and the cabin crew is under training at present while the engineering and the technical staff has also receiving appropriate training at the Airbus facilities. The entire staff and workers of airblue would thus comprise only the nationals.

Sources also told PAGE that airblue would initially operate 15 flights on major sectors of the country daily including 3 Karachi-Lahore-Karachi flights, 3 Karachi-Islamabad-Karachi flights and one circular Karachi-Sukkur-Multan-Karachi. Each of the three A-320 aircraft in airblue's fleet has 126 economy and 20 business class seats. "We aim to offer a world-class service on aircrafts which are just 5 years old compared to aircrafts of our two competitors in the private sector, the average age of which is 15 year. We aim to compete with the PIA with primary focus on service and yet at the same time intend to offer attractive fares to price-conscious passengers on the one hand and greater flying options to schedule-conscious travelers. Our competitive fares are based on revenue management concept to allow our travelers best value for their money while for the schedule-conscious passengers we have decided to always have a back-up aircraft at Karachi. We would also offer heavy discounts for senior citizens, night coach, students and various other such discounts and have a very strong IT back-end to market it on the Internet."

Airblue, the second company to get the aviation license under the new aviation policy, is a public limited company formed in May this year under the Companies Ordinance 1984 an it will be listed on the Karachi Stock Exchange. It has a paid-up capital of Rs 100 million as required by the new aviation policy and has also met all other requirements. It is in the process of getting the Air Operator Certificate by the CAA and is ready which would allow it to commence domestic operations next month.

ROYAL AIRLINES

The Managing Director of Royal Airlines, the first airline to be granted the airline license under the new aviation policy in October last year, Capt. Aijaz Ali Faizi, said that the passenger operations would be an extension of the airlines' freight operations. "We acquired the scheduled chartered license about 3 years ago and been successfully operating on domestic routes Karachi, Lahore, Sukkur, Multan and Islamabad as well as to Dubai for the last two-and-half years with a fleet of 4 Russian aircraft two AN-12 with a 18 ton cargo capacity each and two AN-26 each with a cargo capacity of 5 ton. We were not only the first airline to get the airline license under the new aviation policy but is also the first, and the only airline, to operate dedicated freight services within the country. We have fulfilled all the prerequisites for the license including the minimum paid-up requirement of Rs 100 million plus ban and cash guarantee of Rs 10 million each. We have played an important role to promote exports because we do not only carry captive cargoes from almost also courier services here to Dubai but also ship many other items including fresh fruits & vegetables, seafood."

"We expect to commence passenger operations by end first quarter next year with focus on service, the primary factor that distinguishes one airline from another in a business where the operators fly more or less the same aircraft to same destinations within the same scheduled time."

The airblue will become the fourth airline to operate on domestic routes next month in a market 75 per cent of which is dominated by the PIA and the rest by the two private airlines at present. It is, and should be, expected that it would help provide choice to the domestic air travelers in more ways than one.