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Project On PIA by Shehmeen
Project On PIA by Shehmeen
BS (BA) 8TH B
JULY 20TH, 2009
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First of all I am thankful to Allah then I would like to record my heartful thanks to
specially my respected Professor Sir Aymen sajjad. And to my dear
friend Muhammad Umar who help me out in the report editing and
fromating.
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The pursuit of excellent through technology and quality control and ushering in a new era
of growth and development.
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1) EXECTIVE SUMMARY.
2) INTRODUCTION
4) HIERARCHY OF PIA..
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6) CORPORATE MISSION..
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7) VALUES
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8) REVENUE COMPOSITION.
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9) MAJOR COMPETITORS.. 14
10) LATEST PRODUCTS BY PIA AND QUALITY ACHIEVEMENTS.
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EXECUTIVE SUMMARY:
In 1955 Pakistan International Airline formed. It is the 16th largest airline in Asia,
operating scheduled services to 73 destinations throughout Asia, the Middle East, Europe
and North America, as well as an extensive domestic network linking 24 destinations.
PIA is three stars International Airline. In our report we did SWOT analysis and PEST
analysis on PIA, identify major strength we find as leading market position, brand
recognition, superior operating structure, network presence, hub airport at Karachi, and
effective use of technology. Formulation on GOVT rule, High dependencies on passenger
revenues, high debt, and reliance on oil prices are major weakness, opportunities are like
having MAX route and fleet, growth demand for low cost airline, customer loyalty,
shifting customer needs and industry recovery, and major threats are high interest rates,
accidents, strong competition by Air blue, interest and foreign currency exchange rates,
and decline in industry. In PEST analysis we discover major Governments active role in
increasing competition in the airline industry, inflation rate, turning of social environment
of Pakistan liberal with the new regime. Innovation in technology, and its impact on
distribution and cost synergies from industry consolidation.
We recommend PIA for better service to decentralized its management system, develop
SBUs, adopt transparent promotion polices, employee empowerment to increase the
employee motivation and moral. Try to decrease its overhead cost, adopt effective
marketing policy, two way communication and TQM. Upgrade its fleet; purchase new
Airplane with twin engines these will reduce the operating cost of PIA. Improve control
over fares. Hire the services of IT specialists; improve service standards focusing on
quality.
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3) HIERARCHY OF PIA:
This organization is divided into following
departments: Human Resource and Administration, Marketing, Corporate Planning,
Information Services, Finance, Flight Services, Flight Operation, Engineering,
Procurement and Logistics, Customer Services, Training and Development, Quality
Assurance. The organ gram of the organization follows, with the Chairman at the top and
directors of departments reporting to him.
The structure is centralized with the top-level management making the decisions.
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5) CORPORATE MISSION
6) VALUES:
6.1). Customer Expectations:
PIA is the most trusted name in the industry. The reason of
its goodwill is according the expectation of their customers that PIA has fulfilled always.
By providing competitive tariff, extensive care, and convenience to their valued and
potential customers.
6.2). Service:
PIA aims at providing valuable and unique services to its customers. They
are more personalized and courteous to their customers. The services are valuable and
rare; this is the reason why customers trust PIA.
28 Nov 2004, Pakistan International Airlines - PIA passed the IATA Operational Safety
Audit (IOSA) benchmark for global safety management The IATA Operational Safety
Audit (IOSA) is the benchmark for global safety management in airlines
KARACHI, 22 October 2007 Abacus Pakistan officially launched Abacus Travel
Secure with AIG, providing local travel agents and travelers easy and convenient access
to AIGs travel insurance policies. Available for the first time in Pakistan, Abacus Travel
Secure brings real time and immediate activation of travel insurance policies to the
Pakistan travel industry with a more streamlined and time saving application process for
travel agents
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6.3) Innovation:
PIA currently has a number of 43 fleets and aims at increasing this
numbers to 53 by the next few years.PIA is adoptive to changes and believe in innovation
thats create new ideas and translating these ideas into action.
6.4) Reliability:
PIA is the most experience airline with its service with more than 53
years. This has built in PIA has become the most reliable airline. PIA is known for its
loyalty and consistency.
6.5) Safety:
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i)
Business Class
Economy Class
Business Class
Its the only Business Class service that feels like First Class. A comfortable
seat makes all the difference on a long flight. PIA's Business Class Seats
elevate the concept of luxury to a new level, fully endorsing your decision
to choose PIA Business Class Sit back and relax in our exclusive Business
Class Lounges at the Karachi, Lahore, and Islamabad airports.
Our hospitable staff will ensure that you're well looked after during your
stay with us at the airport Business Class passengers arriving at Airport will
receive a warm welcome from PIA.
Our representatives will walk you right through all the arrival formalities
so that you don't have to stand in line or worry about clearance.
ii)
Economy Class:
PIAs economy class is also comfortable for
Quetta
Chitral
Bahawalpur
Skardu
Saidu Sarif
Dalbandin
Islamabad
Sukkar
Peshawar
Panjgor
Sialkot
Sukkar
D.I,Khan
Jacoababad
Lahore
Turbat
Faisalabad
Moemjodaro
Multan
Gwadar
Zhob
Pasni
D.G.Khan
karachi
7) REVENUE COMPOSITION:
According to the latest report of
PIA, 87% of revenue generates from passengers, 8% of revenue generates
from cargo and remaining 5% consists of others. Fleet Pakistan
International Airlines fleet includes the following aircraft (as of May 2008)
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8) MAJOR COMPETITORS:
PIA is holding the first position in
market. It has 48% market share. Its major competitors are Airblue and
Shaheen International Airline. Airblue has a market share of 35% while
Shaheen International Airline has 17% market share. People feel prestigious
to travel with PIA as compare to Airblue and others.
9)
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Flight Barcelona
9.2) E-Ticketing:
KARACHI, 22 October 2007 Abacus
Pakistan officially launched Abacus Travel Secure with AIG, providing
local travel agents and travelers easy and convenient access to AIGs travel
insurance policies.
Available for the first time in Pakistan, Abacus Travel Secure brings real
time and immediate activation of travel insurance policies to the Pakistan
travel industry with a more streamlined and time saving application process
for travel agents.
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= Good
= Very poor
a 3 Star Airline
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= Fair
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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.
PIAs international market share was 43.5%, In the Domestic market, its
market share was 69.4%. On a system-wide basis, PIAs 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.
ii)
BRAND RECOGNITION:
PIA has high brand recall. It is
its position as the low cost carrier. It has been first class Pakistani airline to
use the latest technology. Factors contributing consists of different series of
Boeing and Airbus and an efficient, high-utilization and point- to-point
route structure.
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iv)
NETWORK PRESENCE:
PIA enjoys a strong network in key
v)
vi)
ticketing system and the second in South Asia to introduce self check in
systems at the Jinnah International Airport, Karachi.
10.2) WEAKNESSES:
i)
DEBT:
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 companys vulnerability to interest rate increases.
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iv)
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.
10.3)
OPPORTUNITIES:
i)
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 companys operations by increasing
revenues.
ii)
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.
iii)
CUSTOMER LOYALTY:
PIAs frequent flyer and loyalty
have to spend money targeting new customers to replace those lost to other
airlines.
iv)
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.
v)
INDUSTRY RECOVERY:
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.
10.4) . THREATS
i)
ACCIDENTS:
There had been five accidents with PIA listed as
below:
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against carriers such as Airblue and Shaheen Airline. PIA remains Airblues
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 Express 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 companys margins.
iv)
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.
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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.
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POLITICAL FACTORS:
Political factors always have a great
influence on the way businesses operate in the airline industry and the
spending power of customers. In recent years it has been observed that
government played an active role in increasing competition in the airline
industry. A number of new airlines such as AirBlue and JS Air have been
awarded licenses to enter the domestic market.
Pakistan has achieved some political stability in recent years. If the
management of PIA believes that the present government will perform well
(consistently), then there will be more investment in the form of purchase
of new airplanes and latest technology. The over all industry will grow
resulting in more luxurious and comfortable flights. With the military
takeover government policies have become more liberal.
ii)
ECONOMIC FACTORS:
Currently, Airlines industry has three
SOCIAL FACTORS:
The social arid cultural influences on
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task which can be performed by person PIA had 3 employees for that.PIA
should give bonus to the industrious and competent employees.
d) Employee Empowerment:
PIA should make efforts towards
empowering the employees that is going to lead to more employee
participation in the decision making process and also result in more
employee satisfaction and enhanced motivation. Apart from this, employees
would feel more independent to discuss the issues explicitly without
hesitation.
This would also enhance team work process at PIA as quality team and
cross-functional teams. The employees will work with more commitment
and dedication and every employee would work to his/her fullest due to
increased motivation.
However, with empowerment comes accountability, so it is suggested that
while they empower their employees, there should also be a controlled
check on them to ensue the correct usage of power delegated to every
employees within their circumscribed limits.
e) Overhead Costs:
PIA should also reduce its overhead costs that are
it should mange its resources: labor more effectively, so that with less input,
more out put can be achieved and the saved resources can be utilized in
other areas such as introducing more training courses for the employees so
that the quality of the workforce could be increased.
Hiring the services of expertise can improve the efficiency of their services,
so by saving the overhead costs, they can utilize that money for the
expertise services. So by analyzing the various segments of the organization
and making the right corrections, it can substantially improve the standards
of Organizational behavior.
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f) Marketing policy:
PIA should adopt good marketing policies so
that it will bring higher profit and maximum utilization of its available
resources, Business sector should be attracted to operate at full potential.
g) Two-Way Communication:
The suggestions of the employees can
prove to be very effective in improving the operations, as they are the ones
who manage them. Therefore, a top-down approach should be replaced with
two-way communications. In this way, the employees would feel motivated
and valued, as they would be included in decision-making
h) Total Quality Management:
Total quality management should be
catered to within the work groups and implementation of various skill
enhancement programs for quality and productivity improvements such as
Six Sigma should be provided to its executive employees.
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Attributes
Destinations
Punctuality
Quality Food
Customer service
Economical
Technological Advancements
Services
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PIA
6
5
5
6
5
5
5
Air Blue
5
6
6
5
5
5
5
Shaheen Air
4
4
5
5
5
5
4
Corporate image
Total Points
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6
43
3
40
4
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References
Sites
www.piac.com.pk
http://en.wikipedia.org/wiki/Pakistan_International_Airlines_destinations3
http://en.wikipedia.org/wiki/Pakistan_International_Airlines
www.google.com
http://www.historyofpia.com/
http://www.airlinequality.com/Forum/pia.htm
http://www.britannica.com/EBchecked/topic/438805/Pakistan/23702/Trans
portation-and-telecommunications#ref=ref387351
http://aviation-safety.net/database/operator/airline.php?var=4931
http://www.centreforaviation.com/news/2009/07/10/pakistan-internationalairlines-reports-second-consecutive-operating-profit-in-1q2009/page1
http://findarticles.com/p/articles/mi_m0EIN/is_2006_May_8/ai_n16347759
/?tag=content-inner;col1
http://wwwagse.informatik.uni-kl.de/teaching/pia-scenario/
http://www.abacus.com.pk/news_events/travel_secure.asp
http://www.asiatraveltips.com/news06/95-Abacus.shtml
http://www.etq.com/airsafety/
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http://www.scribd.com/doc/13082382/Pia-Report?autodown=doc