Pakistan set to launch five new airlines, PIA in for a loss

Pakistan is set to launch five new airlines in its aviation industry in the next one year as competition intensifies following an open skies policy which may lead to lower fares and pose challenges to the financially struggling Pakistan International Airlines (PIA).

Afeef Zara, Askari Air, Air Sial, Go Green and Liberty Air are the new airlines set to hit the market. Air traffic had hiked over 40% in the past five years, flying around 20 million passengers, media reports said.

These airlines aim to cover routes Gwadar, Panjgur, Khuzdar, Dalbandin, Parachinar, Muzaffarabad, Bannu, Turbat, Skardu and Chitral. From these routes places like Gwadar, Gilgit-Baltistan and Turbat provided lucrative profit opportunities due to work being carried under China-Pakistan Economic Corridor (CPEC).

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The International Air Transport Association (IATA) stated that Pakistan’s aviation sector could touch 9% per annum which could continue till 2020 and that these numbers highlighted the open skies policy which could prove lucrative for Pakistan, said reports.

Muhammad Afsar Malik, former additional director of the Civil Aviation Authority (CAA) said that Pakistan’s domestic air traffic has grown 10%, which is six percentage points higher than the 4% expansion in international air traffic, media reports said.

Malik added airlines were reducing fares to attract customers due to increased competition in the sector, and it was a result of the open-skies policy otherwise ticket prices would have been Rs30,000 instead of Rs10,000.

But PIA’s spokesman believed on the contrary and in an emailed response stated private and foreign airlines were focusing on price cuts instead of providing more customer satisfaction.

However, Shaheen Air spokesman said in an email “about every player in the aviation chain including airports, airplane manufacturers, jet engine makers, travel agents and service companies turn in healthy profits. Yet, it is one of the enduring ironies that companies that actually move passengers from one place to another, which are a crucial link in the chain, struggle to achieve break even.”

He further added that government should rethink the open skies policy as foreign carriers could enter Pakistan’s market without any restriction.