Privatization alone without a level playing field and an independent competent regulator will fail to restore profitability to PIA. States regulate granting traffic rights, routes and slots to foreign airlines on reciprocal basis ensuring that local aviation industry rights are not compromised. No state allows foreign airlines total freedom to carry passengers from their country to main hub of that foreign carrier for onward journey to another country. 

While competition is vital for service oriented industry to ensure that consumer gets best value for money, creating an overcapacity through senseless policies like Open Sky only serves to damage local aviation industry. Traffic rights given courtesy open sky has created an over capacity offering 14.5 Million passenger seats to cater to demand of approximately 13 Million passengers in Pakistan. These foreign airlines remit annually approximately $750 Million from Pakistan. 

Foreign airlines which lack such ethnic traffic within their own countries, seek to exploit greed and conflicts of interest of ruling elite to seek lopsided traffic rights as has been in Pakistan. These Gulf airlines are not just interested in capturing Pakistani passenger working in their country, but those expatriates who live in USA, Canada and Europe. This can be gauged from high fares charged from passengers with final destination in Gulf, as compared to attractive low fares from passengers travelling to destinations in West via their main hub. All Gulf based airlines are owned and subsidized by their respective states, serve alcohol in-flight and have been facilitated by their governments to penetrate markets like Pakistan. As if this was not enough, ever since Nur Khan’s resignation in protest against political interference by Zia, PIA has been victim of abuse by mediocre and often corrupt executives appointed by successive civil and military government, like choice of dubious German or controversial Shujaat Azeem and others like Aijaz etc. Adding salt to injury these governments went on rampage recruiting cronies to worsen already surplus employee/aircraft ratio. 

Whatever the decision, PIA’s identity as national airline must be retained and not compromised to benefit another airline, like it was when an airline owned by Shaheen Foundation was started with fanfare. Traffic Rights need to be renegotiated to arrest outflow of foreign reserves. 


Lahore, March 2.