Chapter # 1

INTRODUCTION: While the coming together of satellite communication and information technology has made mass communication affordable and efficient for many people, air travel continues to remain an important and integral requirement of all societies since it is an essential part of present day lifestyle. Though just about one hundred years old, the commercial airline industry has come a long way towards providing efficient, comfortable and affordable means of travel and trade. It has successfully shrunk the world into a global village. The exponential growth of airline business in recent times has provided impetus to all segments of the industry from manufacture of aircraft to handling of increasing quantum of passengers and cargo; development of related infrastructure; handling of various aviation activities with ease; and ensuring safety on the ground and in the air. However, for now and for some years to come, it appears that the future of the industry, both domestic and international, will be clouded by many uncertainties in several sectors; economics, energy, and regulatory policies of governments. This paper reviews the state of the civil aviation industry in Pakistan, analyzes its status in relation to global developments and proposes ways and means for improving the aviation scene in Pakistan.

Factors influence air travel demands: Gross domestic product Liberalization and globalization Market competition Industrial growth Rise in per capita income Increase in personal disposal income New airline business model Tourism promotion Foreign direct investment Background of Pakistan air line: Pakistan International Airlines Corporation (PIAC) was established in 1955 and was the only airline of the country. Since its infancy it has enjoyed the active patronage of successive governments. Its initial leadership was dynamic and committed. Consequently, the airline was established on a sound professional footing. This can be gauged from the illustrious record of the airline in the 1950s, 60s and the 70s. At one stage during those decades, PIA was considered the most vibrant airline in the Asian region. The development of the airline also contributed significantly towards improvement of its human resources and ancillary or support infrastructure. This human resource, as indeed that which was produced by the Pakistan Air Force, was to become the backbone of the aviation industry in general, and the airline industry of Pakistan in particular.

However, the commercial airline industry has experienced rapid change in its regulatory environment worldwide. The winds of change began in the United States, with the introduction of the Airline Deregulation Act of 1978 and spread to Europe and gradually to the rest of the world. After operating under strict regulation for nearly forty years, the airlines were given freedom to choose the routes they served, and to set the prices they charged. Up to the early 1980s the regulatory aspects of the aviation industry were still evolving and the level of liberalization varied from country to country. Whereas most of the countries have moved rapidly, Pakistan is still in transition. The policy with regard to deregulation remains clouded with uncertainties and lack of clarity. As a result, various segments of the industry remain completely confused. In 1982 the Pakistan Civil Aviation Authority (CAA) was created as a regulatory body through an act of parliament, at the behest of the International Civil Aviation Organization (ICAO), to govern and align civil aviation activities in the country with ICAO recommended practices. The newly created CAA faced severe resistance from various professional cadres of PIAC. As the CAA started to move forward and made efforts to seriously undertake its regulatory duties, the resistance from the national carrier started to take an ugly shape. Neither the government of the time, nor the leadership of PIA and CAA made any meaningful and concerted effort to curb these unhealthy tendencies. This resulted in a gradual but certain decline in standards in all areas of airline operations. It also led to professional compromises by some CAA personnel. This situation was to become the main reason for the downgrading of Pakistans CAA by ICAO a decade later.

Chapter # 2
OPEN SKIES POLICY: In the early 1990s the government of Pakistan adopted an Open Skies Aviation Policy, and signed a memorandum of understanding with a number of countries of the region and outside. These exercises were undertaken in great haste without really understanding the implications of Open Skies for Pakistans own carriers. PIA, which was at that time mainly dependent upon domestic and ethnic passenger traffic, suddenly found itself competing with outside carriers at home. The resultant chaos led to more confusion in the minds of unprofessional bureaucrats, the regulatory authority and of course the national carrier. Each was looking myopically through its own prism of interest, little realizing the negative impact of its actions, or inactions, on the state of the civil aviation sector of Pakistan in general, and the airline industry in particular. History of PIA: Birth of a Nation, Birth of an Airline Air transport has probably never been more important to the development of a new nation than in the case of Pakistan. In June 1946, when Pakistan was still in the offing, Mr. Mohammad Ali Jinnah, the Founder of the upcoming nation, instructed Mr. M.A. Ispahani, a leading industrialist, to set up a national airline, on a priority basis. With his singular vision and foresight, Mr. Jinnah realized that with the formation of the two wings of Pakistan, separated by 1100 miles, a swift and efficient mode of transport was imperative. A New National Flag Carrier for Pakistan:

Orient Airways was a privately owned company, with limited capital and resources. It could not be expected to grow and expand independently. It was then that the Government of Pakistan decided to form a state-owned airline and invited Orient Airways to merge with it. The outcome of the merger was the birth of a new airline, through PIAC Ordinance 1955 on January 10, 1955. In addition to transport activities, Orient Airways had established the nucleus of overhaul and maintenance facilities and acquired trained pilots, engineers and technicians, measures which proved to be a great asset for PIA during its teething phase.

PIAs First International Service The year 1955 also marked the inauguration of the fledgling airline's first scheduled international service - to the glittering, glitzy capital city of London, via Cairo and Rome. Initially, there was much criticism, as the public could not comprehend or justify the need to operate an international route when, in their opinion, other projects vital for a developing country should have been given a higher priority. However, PIA's focus was, and continues to be, to serve the Pakistani community at large. The provision of transportation to expatriates has remained one of the foremost priorities of the national airline. Moreover, PIA earned substantial foreign exchange through international services, which it invested in the purchase of aircraft and spare parts, as fleet expansion was a grave necessity for the airline. New Planes, New Directions, New Management: In 1956, orders were placed for two Super Constellations and five Viscounts which were to be delivered in 1959. At this juncture, PIA possessed a small fleet which comprised of Convairs, Viscounts, Super Constellations and DC-3s.

While Mr. M.A. Ispahani was the first Chairman of the new dynamic airline; it was the first Managing Director of PIA, Mr. Zafar-ul-Ahsan, who in his 4 year tenure, got the ball truly rolling and set the shape of things to come. The PIA Head Office building at Karachi Airport, which houses all the major departments of the airline, was the brain-child of Mr. Zafar-ulAhsan. In fact, on his departure from the airline, the employees presented him with a silver replica of the building with the caption, "The House You Built". In 1959, the Government of Pakistan appointed Air Commodore Nur Khan as the Managing Director of PIA. With his visionary leadership, PIA 'took off' and within a short span of 6 years, gained the stature and status of one of the world's frontline carriers. In aviation circles, this period has often been referred to as the "golden years of PIA". Development, expansion, and growth were keywords that the new management was committed to. In March 1960, PIA launched its first Boeing 707 jet service on the London-Karachi-Dacca, route which later proved to be very successful. This trail-blazing accomplishment resulted in PIA becoming the first Asian Airline to operate a jet aircraft, setting trends for the future. In 1961, the airline took on the mammoth task of initiating a cross-Atlantic service from Karachi to New York. By this time, PIA had placed orders for more new aircraft, which included Fokker F-27s, Boeing 720Bs and Sikorsky helicopters. Helicopter services in East Pakistan had gained momentum by 1962 and expanded to include Sylhet, Chittagong, Dacca, Comilla and Ishurdi. PIA's helicopter services carried over 70,000 passengers during the first year of operation. At the time, it was regarded as a stellar operation, equal to any other in the world. Unfortunately, due to two mishaps, the service was discontinued in 1966.

Historic Firsts and Unbroken Records: In 1962, finding the upper winds forecast favorable, PIA set out to break the record for the fastest flight between London and Karachi. With representatives of FAI (Federation Aeronautique International) on board to monitor the official timings, PIA completed the flight in 6 hours, 43 minutes, 51 seconds, a record which remains unbroken to this day. In 1964, PIA achieved another historic first, regarded as major milestones in the chequered history of the airline. On 29th April, 1964, with a Boeing 720B, PIA earned the distinction of becoming the first airline from a non-communist country to fly into the Peoples Republic of China. PIA's first service to China was from Karachi to Shanghai via Canton. In 1964-65, PIA expanded its fleet further with the addition of a fourth Boeing 720B and two Fokker F-27s. Serious development had become a reality and the PIA team continued to move ahead with ambitious plans and goals for the national flag carrier. A collective pride and joyous buoyancy was pervasive within the PIA family. Riding high on the crest of success, PIA became a household name in Pakistan in the mid sixties. The war between India and Pakistan, during 1965, further tested the national airline. PIA played a major role in providing logistical support to the Armed Forces by operating special flights using Boeings, Super Constellations, and Viscounts. The Founder of the Nation, Mr. Jinnah had predicted that the Pakistan Airforce would need the support of a civil airline in special circumstances, and this came into evidence during the war. In 1966, a system of feeder services linking eight new points in West Pakistan was introduced. By this time, the airline's Viscounts were proving inadequate owing to traffic growth, and had to be replaced by Tridents. The airline continued up the growth curve, receiving two Fokker F-27s, two Boeing 707s and one Trident in the following year.

Chapter # 3
Style, Glamour, and Charisma Around this time, the airline saw a change in the top slot. Air Vice Marshal, Asghar Khan took over the reigns of PIA for a tenure of 3 years. A number of highpoints are attributed to this period. The most colourful, if not the most significant, occurrence for PIA was the introduction of a new air-hostesses' uniform designed by none other than the renowned French designer, Pierre Cardin. Taking the aviation world by storm, this move, more than any other single factor, imprinted PIA's name on the international market. The uniforms were an instant hit, both at home and abroad.

Safety Management System at PIA

PIA is the first airline to get certified (initial certification) on Safety Management System (SMS) by Civil Aviation Authority CAA - Pakistan. CAA Air Navigation Order (ANO 91.0032 issued in September 2008) binds all airlines operating in Pakistan to have SMS. Well before the issuance of this ANO, PIA initiated SMS awareness and implementation in July 2008. PIA awarded initial certification on SMS in 27th February 2009 by CAA. The Pursuit of Excellence through Technology and Quality Control: Not content with a number of historic firsts under its belt, PIA made history yet again, by installing Pakistan's first computer, an IBM1401, in 1967. PIA's first Engine Overhaul Shop, located near the Head Office building, was also completed and commissioned around this time. The Ground Training School (GTS) now known as the PIA Training Centre, was first conceived

and developed during 1961-62. Interestingly, training was initially imparted in the T-shaped building which has now become the PIA Dispensary, close to the Head Office building. Besides visible development and growth in traffic and revenues in the sixties, PIA added additional destinations, new equipment, and cutting-edge technology to support its ever expanding operations. A new Jet Hangar for Boeings with a supporting airframe overhaul shop was completed and commissioned in 1968. In 1970, PIA set up its own Flight Kitchen in Karachi, which caters, even today, to the national airline as well as other carriers. Over the years, with the airline's expansion and increased capacity, the need for a second Flight Kitchen became imperative. Ushering In a New Era of Growth and Development PIA heralded the nineties by donning a bright new corporate identity. Old-timers may remember the flutter that the earlier green and gold livery had created when it was first introduced in 1974. However, in keeping with the changing times, PIA introduced a smart, sporty 90's look. The familiar PIA green was reinforced with moss green and pale blue stripes were incorporated into the new corporate identity. The stripes, a universal symbol of sport, highlighted PIA's active participation and sponsorship of a diverse range of national games. PIA's players have always been at the forefront of Pakistani Cricket, Hockey, Squash, Football, Chess, Bridge, Polo and Table-Tennis teams. The nineties also saw the expansion of PIA's massive Haj and Umrah operations to Pakistan's smaller cities, in addition to the major cities of Islamabad, Peshawar, Lahore, Quetta and Karachi. PIA's growth continues unabated and the airline now operates globally, covering the entire domestic landscape and international destinations spread over 4 continents. Impressive statistics for a comparatively young airline? Since its inception in 1955, PIA has indeed, come a long way.

Ch. Ahmed Mukhtar

Minister for Defence and Chairman - PIA

Syed Naseer Ahmad Malik Nazir Ahmed

Board of directors of PIA:

Mr Javed Akhtar

Lt. Gen (Retd) Syed Athar Ali Federal Secretary Defence

Capt. Muhammad Aijaz Haroon Managing Director PIA

Prof. Mian Ijaz ul Hassan

Mr Mubashir Iftikhar

Mr Husain Lawai

Khawaja Jalaluddin Roomi

Mr Salman Siddique Federal Secretary Finance

Mr Muhammad Shuaib Secretary-PIA PIA management: Managing Director Capt. Muhammad Aijaz Haroon Deputy Managing Director Mr. M. Salim Sayani Director Finance & CFO Mr. Faisal I. H. Malik Director - Corporate Planning Mr. Shahnawaz Rehman Director - Engineering and Maintenance Mr. Maqsood Ahmed Director - Flight Operations Capt. Shuja Naqvi Director - Human Resource & Administration Mr. Hanif Pathan Director - Marketing Mr. Imran Ahmed Khan Director - Precision Engineering Complex AVM Muhammad Kamal Alam Siddiqui

Director - Procurement, Logistics and Food Services Mr. Javed Kamran Director - Training and Development Mr. Dilawar Farid Baig Director Mr. S. Kamran Hasan

General Manager : Corporate Safety & QA Capt. Salman Azhar Chief Engineer: Engineering QA Mr. Aslam Tariq General Manager: Passenger Handling Services Mr. Syed Aijaz Mazhar General Manager: Public Affairs Mr. S. Sultan Hasan

Safety Policy: At PIA, Safety is an integral part and cornerstone of our business. We shall ensure its priority in every aspect of our work. We will strengthen and maintain the confidence of all interested parties to trust PIA as the safest airline around the globe. To achieve and sustain highest level of Safety performance:

We shall maintain an active Safety Management System for proactive management of all safety parameters;

We shall promote the growth of a positive safety culture from the top management, permeating through the middle tiers and cascading to every employee of the organization;

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We shall strive for continuous improvement in the level of safety in all our operations; By way of our safety focused approach, we shall proactively identify the risks involved in our activities and environments and apply necessary controls to mitigate their effect;

We shall comply with defined corporate policy and procedures, international safety standards, national legislations and regulatory requirements;

We shall educate and encourage our employees to report all safety hazards, violations, deliberate or inadvertent human factor errors and safety risks without fear of retribution, thus augmenting our safety achievements through an interactive learning process. However, willful negligence and acts of deliberate violation jeopardizing own safety and safety of others will not be accepted;

We shall ensure that all required audits are conducted and reviewed regularly. All employees shall cooperate fully with internal and external auditors to achieve our goal of continual improvement keeping in view the challenges of changing environments;

We shall ensure active participation of representatives from relevant areas in all safety related decision making and we shall ensure that good performance is recognized and rewarded.

All PIA employees shall explicitly demonstrate their safety consciousness by being aware of their individual roles and responsibilities in the safety chain to make PIA a safer airline; however the ultimate responsibility for safety in the organization rests with me as the accountable

executive. I will ensure that timely decisions are taken to provide adequate resources to implement our safety strategy and policy. Net work of PIA:

DOMESTIC NETWORK:

About PIA - PIA's Hub Home About PIA PIA's Hub The Civil Aviation Authority of Pakistan (CAA), a beacon of service and achievement, has witnessed dynamic growth since its inception in 1982. Over the years, the CAA has remained committed to promoting air transportation and navigation by providing services to civil airports and aerodromes in Pakistan. Today, the CAA manages the operations and maintenance of several airports and associated facilities across the country. The CAA specializes in planning, installation, maintenance, operations, and calibration services for aircraft that use the nation's airspace.

With a vision for the future, the Civil Aviation Authority envisaged a contemporary, modern passenger terminal at Quaid-e-Azam International Airport, Karachi, to effectively handle growing air transport requirements. Jinnah Terminal - Karachi Karachi - a bustling, cosmopolitan metropolis - is home to Pakistan's rich cultural, social and economic heritage. The vibrant city draws visitors from all over the world and is a hub of tourism and business. Whether you are arriving, departing, or in transit, you are sure to enjoy your stay at the Jinnah Terminal at Quaid-e-Azam International Airport in Karachi. Designed to facilitate the modern traveler, the Jinnah Terminal is a perfect blend of form and function. From duty-free shopping to delicious local and international cuisine, you'll find plenty to do at the Jinnah Terminal. Airport lounges, equipped with the latest entertainment and Internet facilities, will help you relax if you have time on your hands. If you are rushing to catch another flight, the high-speed lifts and escalators will get you there with time to spare. Passenger facilitation services, ranging from courteous porters to spacious check-in halls, eliminate the stress of travel. PIA's hub in Karachi is the gateway to Pakistan. Come and experience our unique hospitality and traditions. About PIA - Sports Home About PIA Sports

Nurturing Talent, Achieving Glory PIA is much more than a national airline, it is a national institution. In continuation of its unwavering commitment to Pakistan's development, the PIA Sports Division was set up in 1958. PIA's contribution to the advancement of Pakistani sports remains unparalleled - no other organization in the country has consistently invested in the promotion and development of sports. Visionary leadership at PIA provided the impetus for the airline to set up a unique career development plan for sportsmen. PIA provides attractive and stable jobs to outstanding sportsmen, empowering them to focus on what they do best. Sportsmen are provided gear, travel facilities, and benefits that have enabled them to excel and make Pakistan proud. PIA's sportsmen have been and continue to form Pakistan's lineup for major sports including cricket, hockey, football, squash, polo, tennis, bridge, chess, table tennis, cycling, and body building. PIA has dramatized the world of Pakistani sports by transforming popular games into national sports, national sportsmen into international heroes, and national tournaments into international sports bonanzas. About PIA - Haj and Umrah: Home About PIA Haj and Umrah Haj and Umrah Operations PIA, Pakistan's national airline, operates an extensive two-month Haj operation each year, to and from Jeddah, Saudi Arabia. Haj, the holy pilgrimage undertaken by Muslims from around the world in the twelfth month of the Islamic calendar (Zilhaj), is one of the fundamental pillars of Islam. Muslims endowed with good health and the economic means to undertake the pilgrimage, perform this sacred duty at least once in their life time. Haj is the largest

congregation of the faithful in recorded history. Over the last 1400 years, Muslims from across the world, assemble in the House of Allah in Makkah, Saudi Arabia. PIA, Pakistan's premier airline, transports thousands of pilgrims each year, from several Pakistani cities to the Kingdom of Saudi Arabia, at special rates. Every year, PIA also schedules special flights on the Pakistan- Jeddah-Pakistan sector to serve pilgrims on their way to Saudi Arabia to perform Umrah. About PIA - Flight Kitchens: PIA runs two modern, well-equipped Flight Kitchens in Karachi and Islamabad that serve culinary delights ranging from delicious Pakistani delicacies to tempting Western cuisines to more than 15,000 passengers everyday, traveling on domestic and international flights. In addition to serving sumptuous food, PIA Flight Kitchens also cater to VVIP flights and Chartered flights for top government officials and foreign delegates. Special meals which are customized according to the passengers requirements like Diabetic Meal, Vegetarian Meal, Low Cholesterol Meal and Baby Meals are also offered to our passengers upon request. The kitchens are supported by strong production and operation teams including expatriate chefs who have a diverse experience in international cuisines. The chefs have undergone overseas training to further hone their skills. Several of PIAs top chefs have also been posted to overseas flight kitchens to share their expertise in cooking skills . Infact, since February 2006, the management control of the Karachi Flight Kitchen has been given to Singapore Air Terminal Services (SATS), a leading premier company in ground and cargo operations , and inflight catering, to further enhance the quality of food on board the flights. Accordingly, SATS has initiated an extensive renovation of the Karachi Flight Kitchen to upgrade its infrastructure and are establishing extremely stringent quality control standards that

shall ensure the highest quality and hygiene levels. PIA flight kitchen is HACCP Certified which is an international certificate on food hygiene. The two Flight Kitchens are also equipped with food testing microbiological laboratories which conduct stringent daily microbiological tests to ensure that food produced is safe, nutritious and palatable. All the other related processes like Inventory Control, Menu Planning, Portion Control, Cost Calculations, and Management Information Systems are managed through cutting-edge technology and modern business practices. PIAs Fleet: sPIA's fleets of modern aircraft are spacious, comfortable, and designed to get you to your destination safely. PIA operates a range of advanced aircraft, ranging from the world's preferred Boeing 777 airplane to the super-quiet Airbus A-310. A brief introduction of PIA fleet is given below: BOEING 777 The Boeing 777 family comprises of long-range, wide-body twin-engine airplanes. PIA was the first airline in the world to operate all the three variants of the 777 family: 777-200LR, 777-200ER and 777-300ER, all of them are well loved by PIA's seasoned travelers for their spaciousness and comfort. PIA also holds the privilege of being the launch customer for 777200LR, one of PIAs aircraft holds the record for the longest commercial jet flight in aviation history. At present PIA is serving destinations in USA, Canada, UK and Europe through its 777 fleet.

Boeing 747 The Boeing 747, often referred to as Jumbo Jet, is amongst the world's most iconic and recognizable jet airplanes. This 4 engine long haul wide-body airplane has a two-deck configuration. PIA operates two variants of 747 family which includes 747-300 and 747-200 Combi. 747 Combi is so called as it has mixed pax and cargo configuration on the main deck. At present due to its capacity, 747-300 fleet is mostly deployed to cater high density requirements like carrying intending pilgrims to and from Saudi Arabia. Airbus A310 The Airbus A310 is a medium to long range wide-body airplane providing a spacious interior to its travelers. PIA has deployed the A310-300 fleet on Far East, Regional as well as Domestic routes. Boeing 737 The Boeing 737 is one of the world's favorite narrow-body short/medium haul jet airplane. Amongst its many credits, it has the distinction of being the most ordered and produced commercial airplane of all time and Boeing continues to manufacture its variants, to date. PIAs 737-300 aircraft mostly serve its domestic and regional routes. ATR42 This modern technology turbo prop is the latest type inducted in PIAs fleet. PIAs fleet of seven ATR42-500 aircraft is configured in comfortable two class seating arrangement. This aircraft has enabled the airline to provide its valued customers the most convenient way to fly to far flung destinations of the country.

References: Global trend in air line industry. Retrieved 9JAN 2011 from http://www.pafkiet.edu.pk/LinkClick.aspx?fileticket=1QHvhf28zCg%3D&tabid=157& id=1554 Global trend in air line industry. Retrieved 9JAN 2011 from http://www.icao.int/DevelopmentForum/Forum_08/Presentations/Senguttavan.pdf History of PIA. Retrieved 9JAN 2011 from http://www.piac.com.pk/pia_about/pia about_history.asp