OPENING UP THE SKIES

COMPETITION WILL FACILITATE PASSENGERS

SHABBIR H. KAZMI
(feedback@pgeconomist.com)
June 21 - 27, 20
10

The key objectives of National Aviation Policy are: 1) to ensure safe and efficient civil aviation operations in the country by facilitating operations in the domestic market by following the safest standards in conformity with ICAO standards through operating an optimum number of airlines to encourage competition without dissipating the market. For international operations, the conditions provide fair and reasonable competition to the Pakistan carriers with sufficient encouragement to the foreign airlines to continue to serve Pakistan in the most efficient manner and in largest number possible. 2) To contain predatory pricing and unfair competition, both internationally and domestically, through a system of filling of tariffs and compliance thereof. 3) To improve terminal facilities and remove bottlenecks for passengers, making Pakistani airports passenger friendly. 4) To promote and encourage tourism in Pakistan by integration of the tourism policy with the aviation policy. 5) A selective Open Skies Policy is being followed by having agreements on the principle of reciprocity and bilateralism with maximum number of countries.

With the growing number of travelers and the permission to private sector to operate domestic and international flights a need has been felt to regulate the operations of airlines. Separate set of rules have been prepared for domestic and international operations to facilitate the airlines as well passengers.

DOMESTIC OPERATIONS

1) PIA and private sector airlines will continue to freely operate on domestic routes; 2) Eight destinations i.e. Chitral, Gilgit, Skardu, Gwadar, Panjgur, Turbat, Pasni and Jiwani may continue to be treated as socioeconomic routes; 3) Private airlines must service the following domestic routes as a minimum (a) Minimum of two trunk routes one of which should include Peshawar, Quetta, Multan or Faisalabad and (b) Minimum of 2 frequencies per week on one socioeconomic or one tertiary route and 4) In case of their inability to service socioeconomic or tertiary routes, private airlines will have to pay Rs500,000 per month royalty to PIA.

INTERNATIONAL OPERATIONS

1) PIA may continue to operate on all routes presently being operated by it. Private airlines along with PIA should also be eligible to operate to countries where open skies or multiple designations of airlines are available; 2) Where PIA is not operating to its full entitlement, the surplus capacity of PIA on these routes may be given to private airlines; 3) While finalizing new ASAs, Pakistan should opt for multiple designations of airlines, particularly for cargo and charter services; 4) Under the ASA's wherever PIA has no plans to operate, private sector airlines, if they so desire, may be designated to operate on such routes and PIA's designation may be withdrawn; 5) Operation by private carriers on the international routes should be linked with their continued operation on domestic routes for at least one year and meeting all mandatory conditions of domestic operations to justify acquisition of international route; and 6) The freedom rights are to be granted strictly on the basis of reciprocity, ensuring balancing of rights in terms of market value and that the commercial interests of Pakistan are not compromised. However, selective concessions may be made for quality airlines.

According to the data, latest up to 2006-07, placed on the website of Civil Aviation Authority, total 197,168 flights were operated during the year out of these 128,272 was commercial and 68,896 non-commercial. Out of the commercial flights 78,561 were domestic and 49,711 international. These fights carried over 14.2 million passengers out of this about seven million were domestic and 7.2 million international passengers.

Many people may believe that with the convergence of IT and telecommunication load of air-mail should have declined and the data confirms the fact. Out of a total mail load of 5,420 Mtons, 3.5 Mtons were domestic mail and 1.9 Mtons international mail. As against this the total cargo handled was 312,604 Mtons. Out of this 98,172 Mtons were domestic and 21,432 Mtons were international.

One of the reasons for huge loss making by airlines was hike in fuel cost.

The recent disruption in flights in Europe due to volcano eruption could force many lines to post huge losses. Despite all odds international airlines are trying to cut down fares to beat the competition. However, domestic passengers face persistent increase in fares. While it may be true that domestic airlines are also a victim of high cost, PIA suffers mainly because of bad governance. The quality of on-ground and in-flight services has gone from bad to worse. The major reasons for deteriorating financial condition are exceptionally high number of employees per aircraft, mismanagement and wastages.

It may not be wrong to say that Pakistan suffers from highly depleted and poor quality public transport and air travel can't be an exception. One of the reasons for quality passengers preferring quality foreign airlines is the amazing difference in on-ground and in-flight services. Worst is the situation when a flight is delayed on technical reasons. Passengers are neither informed the correct departure time nor appropriate food/transit facilities. They have to wait in lounges for hours and often run from pillar to post to confirm the departure time. In case a bigger carrier has to be replaced by a smaller one the scene is real chaotic.

Most probably the time has come to allow 'budget airlines' in the country. However, the objective can't be achieved without active support of the government. One of the key elements contributing to the success or failure of an airline is the average life of the fleet. Unfortunately, Pakistani airlines operate old aircrafts which consume higher fuel and their maintenance cost is also high.

Some of the experts even go to the extent of saying that pathetic quality of service of Pakistan Railways has forced many of the domestic passengers to travel by air. However, the ultimate analysis is that while the passengers are forced to pay high fare, they do not get the real worth.