c
cc


c
c


  

c

PIA is one of Pakistan͛s leading air carriers, with more than 800 daily flights. Around 150,000
passengers a month fly on PIA, making it one of the major operators in the domestic market in
terms of passenger kilometers.

PIA͛s international market share was 43.5%, In the Domestic market, its market share was
69.4%. On a system-wide basis, PIA͛s market share was 51.2% at the end of year 2007.Its
strong market position is driven by consistently low fares as well as reliable service, frequent
and convenient flights, use of new technologies like e-ticketing and self check-in terminals,
comfortable cabins and superior customer service.

  



PIA has high brand recall. It is recognized by travelers all over the country. PIA is a national
airline, operating passenger and cargo services covering eighty-two domestic and foreign. PIA
has earned the number one ranking in customer satisfaction. This strong market position gives
the company a scale advantage and helps it strengthen its brand image.

c



c 

PIA has maintained its position as the low cost carrier. It has been first class Pakistani airline to
use the latest technology. Factors͛ contributing consists of different series of Boeing and Airbus
and an efficient, high-utilization and point- to-point route structure.
Flying one type of aircraft significantly simplifies scheduling, maintenance, flight operations,
and training activities. PIA has continually achieved high asset utilization and employee
efficiency. Superior operating structure serves as the primary competitive advantage of PIA.




c


PIA enjoys a strong network in key domestic and international destinations. The company͛s
network includes three the major airports in Pakistan, as well as major international airport
such as Dubai International Airport. Having a strong network means that PIA can generate
traffic feed for both its domestic and international Flights.

 
 

PIA operates from its hub in Jinnah International Airport, Karachi. Jinnah International is one of
the world͛s busiest airports in terms of number of passengers carried. It is also one of the
largest international gateways to Asia. It is also the leading international air passenger (and
cargo) gateway to Pakistan. The company͛s strong presences in airports with heaviest traffic
levels in Pakistan give it a competitive advantage.




c





PIA has successfully incorporated latest technology in all its systems, giving it an edge over
competitors. PIA takes credit for introducing most new technologies to the Pakistani market. It
was the second carrier in Pakistan to incorporate the c-ticketing system and the second in
South Asia to introduce self check in systems at the Jinnah International Airport, Karachi.


cc
c





 
c
The Basic flaw of this organization is its consolidation that is centralized system. The key
policies, strategies and set of laws are designed by the upper management. The centralized
system is one of the biggest obstacles of long term success of PIA. PIA centralizes structure lead
to barrel between different level of management, decreased motivation, hard access to
information.






cc




c
Passenger revenues accounted for 87 percent of the PIA͛s total revenue in 2007. Cargo services
allow airlines to generate additional revenues from existing passenger flights. In addition, cargo
revenues are usually counter cyclical to passenger revenues and have lower demand elasticity
than passenger business, which allows airlines to pass on fuel price hikes to customers.



PIA has a significant amount of 42 billion debts. Current and future debts could have important
consequences for stakeholders of the company. For example, debt could impair PIA ability to
make investments and obtain additional financing for working capital, capital expenditures,
acquisitions or general corporate or other purposes. Debts could also put PIA at a competitive
disadvantage to competitors that have lesser debt and could also increase the company͛s
vulnerability to interest rate increases.





 
c
PIA͛s sustainability, growth and revenues directly depend on oil prices. A steep rise in oil prices
can seriously damage the long term viability of any airline. Recently many airlines around the
world went bankrupt due to rising oil prices. Airlines need to hedge against this risk by taking
proper measures.



c




 


PIA is having the maximum route and fleet domestic and international destinations network in
Pakistan as compared to its Competitors. Route and fleet expansion will positively impact the
company͛s operations by increasing revenues.



 


c 
c
The growing demand for air travel is driven by lower fares and consumer confidence. A survey
by International Aviation Authority showed that ticket price is the number one criterion for
passengers when selecting a flight, well ahead of the availability of a non-stop service.

c



PIA͛s frequent flyer and loyalty programs can help it retain customers. PIA͛s Awards+plus
(frequent flyer program) was established to develop passenger loyalty by offering awards and
services to frequent travelers. Such schemes encourage repeat travel on PIA, as passengers
seek to accrue the benefits given to regular travelers. This enables the airline to retain
customers and reduce costs, as it does not have to spend money targeting new customers to
replace those lost to other airlines.

cc



c
The needs of air passengers are increasingly changing, as they are becoming more and more
price sensitive. If PIA succeeds in making its prices more competitive, then the company will be
able to gain significant market share.

 c 



Market analysts believe that the global airline industry will experience an upturn in fortunes
over the next few years. This represents an opportunity for PIA, as it could generate increased
revenues and command market share if it capitalizes on increases in demand.





















c



c 

The past few years have seen State Bank of Pakistan impose high as well as low interest rates to
check inflation and the over heating of Pakistani economy. Inflation in Pakistan may see
another raise in the short-term.


c
There had been five accidents with PIA listed as below:
ð Pakistan International Airlines Flight PK 705 was a Boeing 720 ʹ 040 B that crashed while
descending to land on Runway 34 at Cairo International Airport on May 20, 1965
resulting in 119 fatalities.

ð Pakistan International Airlines Flight PK740 was a Boeing 707-340C that crashed after
takeoff from Jeddah International Airport on November 26, 1979. All 156 aboard were
killed.

ð Pakistan International Airlines Flight 268 was an Airbus A300B4-203, registration AP-
BCP, which crashed on approach to Kathmandu's Tribhuvan International Airport on
September 28, 1992. All 167 on board were killed.

ð PIA Flight 554 is the flight number of a Pakistan International Airlines (PIA) Fokker F27
that was hijacked on May 25, 1998. The flight started its journey at Gwadar in
Balochistan after originating in Turbat, and was flying to Pakistan's southern port city of
Karachi. The aircraft was carrying 24 passengers and 5 crew members.

ð Pakistan International Airlines Flight 688 (PK688, PIA688) was scheduled to operate
from Multan to Lahore and Islamabad at 12:05 pm on July 10, 2006. It crashed into a
field after bursting into flames a few minutes after takeoff from Multan International
Airport. All 41 passengers and four crewmembers on board were killed. PIA has to
continuously ensure utmost safety and security of its passengers.

Accidents can adversely affect customer confidence in PIA and result in declined revenues
intensifying competition.

c



 

PIA is now competing against carriers such as Airblue and Shaheen Airline. PIA remains
Airblue͛s strongest competitor because of the huge market it has gained over time, strong
brand image and customer loyalty.

PIA has started new low-fares subsidiary ͞PIA Express͟ to stop the Airblue market share
growing to fast. Moreover, major legacy airlines have been focusing on restructuring costs,
which has improved their competitiveness. With costs restructured, the legacy airlines are
becoming more formidable competitors in terms of increasing capacity, matching prices and
leveraging their frequent flier programs. Increasing competition could adversely affect the
company͛s margins.




c 




 
c
Fluctuating foreign currency exchange rates can have a significant impact on PIA͛s earnings. For
example, as PIA is providing its services to the UK. Negative or positive effects arise from
exchange rate movements as change in expenses.
Strengthening of foreign currencies against the British Pound will positively impact PIA and vice
versa.


 
 c 
A number of factors have caused the current decline in the airline industry. For example, the
threat of further terrorist attacks since September 11 and a fall in the number of business
travelers have both caused passenger numbers to fall.

These and other factors may continue to affect demand for air travel in the future, which will
affect revenues of PIA. The threat of terrorism may discourage people from traveling by air and
could especially reduce the number of passengers traveling on international flights.