PIA'S REVENUE TO INCREASE BY 10 PER CENT

Restoration of air links with India

By AMANULLAH BASHAR
Apr 26 - May 09, 2004

Normalization of air link with India, PIA is expected to add another 10 percent into its revenue passengers. Being a huge market the annual turnover from flight operations to India may added some Rs300 million to its earnings, it is learnt.

PIA which has succeeded in coming out of financial crisis during last couple of years is expected to earn unprecedented profits worth Rs4 billion at the end of the current financial year, informed sources said. Comparing with the profits of Rs3.7 billion posted by PIA during previous year on Dec. 30, 2003, the projected profits for the current year are estimated at Rs4 billion. We are anticipating a profit of almost Rs1.75 billion for the first quarter of 2004.

Pakistan International Airlines Corporation (PIAC), currently operating on 38 destinations is planning to increase its flight operations to 50 destinations around the world.

Sources in PIA said that the new destinations to be added into its operations include Milan, Shanghai, LA and Huston etc. The increase in flight destinations is being made following strengthening of its fleet by induction of state-of-the-art 777-200ER into the PIA's fleet. PIA it may be mentioned is the launch buyer of Boeing 777 hence the national airlines has earned a worldwide appreciation for this deal.

Prior to entering into deal with Boeing, PIA was also looking into possibility of purchasing Airbus for expansion of its fleet, however, after thorough discussions and economic interests the decision was made in favor of Boeing instead of the Airbus. The decision to purchase Boeing 777 was made by a high power committee headed by a three star Air Force General and other high ups to go for Boeing 777-ER instead of going for the Airbus. Used aircraft were available at cheaper prices, but new aircraft were also available at cheaper price. PIA being the launch customer for special concessions and discounts on the purchase of the new aircraft. Naturally, the Airbus people were not happy with our decision, yet the operational capability, cargo capacity, fuel consumption and revenue generation of the new planes were enough to go for 777. Well considered decision of a high power committee headed by a three star Air Force General and other high ups to go for Boeing 777-ER instead of going for the Airbus. There was a perception to buy new aircraft. At that time airlines bankrupt in wake of 9/11. Used aircraft were available at cheaper prices, but new planes were also available at cheaper price. We got concession because of launch customers and bigger discounts on the purchase of the new aircraft. Airbus people were not happy with our decision, yet we had to assess the operational capability, cargo capacity, fuel consumption and revenue generation of the new planes. In that backdrop, we found Boeing 777 a better choice as compared to Airbus, he said. Fokker-27 has also come to their age and requires replacement.

For seeking replacement for Fokker, PIA has considered the details of expression of interest received from potential sources for induction through purchase/lease of seven new/used Turbo-Prop aircraft to replace its ageing F-27 aircraft in-line with the Business Plan 2003-2011. After completion of the process of evaluation and techno-economic feasibility of different types of Turbo-Prop aircraft best suited to PIA in terms of time-schedule and better passenger comfort. In this respect, PIA is considering three types Swedish, Canadian, and French aircraft. The replacement for Fokker-27 will be made by the end of the current year, the Chairman said.

As part of the fleet replacement Plan, PIA received first 777-200ER in January 2004, second in February 2004 and the third 777-200ER on 24th March 2004. Two more 777-200LR will be delivered in January and February 2006 and three 777-300ER would be delivered in January, February and March 2008. Curently, PIA was seeking replacement for Fokker-27 which have already come to age. Details of expression of interest received from potential sources for induction through purchase/lease of seven new/used Turbo-Prop aircraft to replace its ageing F-27 aircraft in-line with the Business Plan 2003-2011. After completion of the process of evaluation and techno-economic feasibility of different types of Turbo-Prop aircraft best suited to PIA in terms of time-schedule and better passenger comfort. In this respect, PIA is considering three types of Swedish, Canadian, and French aircraft. The replacement for Fokker-27 will be made by the end of the current year. The outstanding performance by PIA's Engineering Department has contributed significantly to earn PIA a place among the top ranking airlines of the world. By virtue of quality and standard and maintenance certification engineering services. This capability would now add a significant venue for revenue generation for PIA. International airlines will be approaching PIA engineering for maintenance and repairs of the planes. Enquiries have already started coming in from different airlines including Aero Asia, Shaheen Air, FlyAir, Bangladesh airlines etc.