PROBLEM FACED BY PIA

Prepared by :
Mujtaba Asad
Roll no: 08-0454,
section : EE-1

Date: April 19, 2011

 PROBLEM NO.1
Operating on the non-profitable routes also
called socioeconomic routes is also a constraint
for PIA management because due to
government intervention the management have
to deploy fleets on such non-profitable
destinations.
As a result of which PIA is bearing a loss of Rs
Four crores per day i.e. Rs. 18 Lakhs per hour.
For instance Chitral, Gilgit, Skardu, Gwadar,
Panjgur, Turbat, and Pasni are non-profitable
routes for PIA as the fares on these routes are
less than the fuel consumption.
 PROBLEM NO.2
PIA's real test in competing with private sector
airlines began after the entry of Air blue in the
market, in the year 2005. Comprising mostly
the old management staff of PIA, Air blue
started operating in domestic routes with its
new aircraft. Air blue has put the national flag
carrier into trouble with its innovative products
and aggressive marketing strategy. The airline
introduced e-ticketing system for the first time
in the country, which was ultimately followed by
other airlines including PIA.
 PROBLEM NO.3
PIA has a ratio of 440 employees per plane,
as against the international average of 150 to
250 employees. This is because of the
external intervention by the government
officials to recommend their own people to be
adjusted in PIA which is one of the root
causes of huge financial losses to the
organization.