This action might not be possible to undo. Are you sure you want to continue?
Business Policy and Strategy
Submitted To, MR. Ahmed Rana Section “A”
FINAL PROJECT REPORT
FAHAD IQBAL ZOHAIB BASHIR YASMEEN SADDIQ FATIMA AWAN AFZIA FAROOQ EHSAN AKHTAR AYESHA RAFIQUE L1F07MBAM2175 L1F07MBAM0085 L1F07MBAM2226 L1F07MBAM0071 L1F07MBAM2256 L1F07MBAM0115 L1F07MBAM0062
PAKISTAN INTERNATIONAL AIRLINE
PAKISTAN INTERNATIONAL AIRLINE
We have included all the information obtained from the mentioned sources and no part of this project has been added from own. overall view. everything that was required for the completion of the project. Lahore. company information. including the history. telephone discussion representatives and visit to the branch office situated in The Mall Road. starting with the table of contents. PAKISTAN INTERNATIONAL AIRLINE Page 4 . PIAC is the national airline of Pakistan. management hierarchy. The main purpose of the project is the fulfillment of the requirements of the Business Policy & Strategy course.PREFACE All praise is to Almighty Allah for bestowing us with the wisdom to accomplish my task. which is the part of our study work. web pages related to the airline. personal discussion with employees. all the topics are added in a proper sequence. The information has been gathered from different sources including the web site. As regards the preparation of this project.
The topic of our project was the complete Strategic Analysis of PAKISTAN INTERNATION AIRLINE (PIA) and its impact on Pakistan. we had to face some difficulties as data was not readily available. the most Gracious and the most Merciful. G. TABLE OF CONTENTS PAKISTAN INTERNATIONAL AIRLINE Page 5 .AHMAD RANA for his continuous and pre-emptive and continuous support. we had to go to PIA office to collect data after having some solid reference and then sort out relevant data for our project. who gave us strength and enabled us to achieve our goals. Without his help we would not have been able to complete our project on timely manner. During our Project. We are grateful to employees of various departments of PIA that helped us during our field work and helped us in making our project successful.ACKNOWLEDGEMENT We would like to offer our humble gratitude to Allah Almighty. We would like to thank our kind Prof.
....................................................................... 19 MISSION / VISION STATEMENT GOALS & OBJECTIVES EXTERNAL ASSESSMENT STEPLE Analysis...................... EFE Matrix........................................................................... MANAGEMENT STRATEGIES HRM............................................. ............................................................................................................................................................................................................................. Competitive Analysis........... USP’s......... SWOT Analysis......................................................................................... Decision Making (Centralized Vs Decentralized)...................................................................................................... Functional Level........................................ 7 P’s.................................. 08 Situational Analysis............................................................................................................................................................................................... Administration. MARKET ANALYSIS Segments & Target Market............... Motivational & Incentive Techniques..................................................................................................... BCG.......................... 12 Number of Employees................................................................................. PAKISTAN INTERNATIONAL AIRLINE Page 6 ..................... 15 Location of Office....................... Organizational Hierarchy........................................ Business Unit Level................................................................................................................................................................ CORE COMPETENCIES ANALYSIS & KSF CORPORATE CULTURE STRATEGIES UNDERTAKEN AT THE Corporate Level................... 16 Nature of business................................................................. 19 Key players-Board of Directors........................................ Porter’s 5 forces model..................................................... Market Share....... Competitive Profile Matrix................. 21 13 FINANCIAL ANALYSIS Statements........................... Main Marketing Strategies and Marketing Positioning............................................................................................................................................................................................................INTRODUCTION Brief History....................................... 19 Type of ownership.........
.................................................................................................................... Quality control...................................... CONTROL PROCEDURES Marketing control..................... Sub problems............................. PROBLEM SECTION Main problems according to the management................................................................ Finance control........................ HR control................................................................................................................... STRATEGIC ALTERNATIVES Solutions to solve the problems.........................................................................................................Costs / Expenditures................................................................................................ Procurement................... Evaluation of the solutions... Profits............................................................................ CONCLUSION RECOMMENDATIONS REFERENCES PAKISTAN INTERNATIONAL AIRLINE Page 7 ................................................................................................ IMPLEMENTATION PLAN............................................................................................................ Revenues........................................................................ Production control.................... OTHER STRATEGIES R&D...................... Ratios............................................... Main problems according to your analysis...................................................................
INTRODUCTION BRIEF HISTORY Birth of a Nation. Birth of an Airline PAKISTAN INTERNATIONAL AIRLINE Page 8 .
to set up a national airline. Within two months of Orient Airways' operational beginnings. M. and twelve mechanics. The designated route for Orient Airways was Calcutta-Akyab-Rangoon. along with the help of BOAC aircraft which had been chartered by the Government of Pakistan. Carter as General Manager. the Founder of the upcoming nation. started relief operations and transportation of people between Delhi and Karachi. The new carrier's base remained in Calcutta and an operating license was obtained in May 1947.A. The initial routes were Karachi-LahorePeshawar. instructed Mr. In June 1946. Orient Airways Takes to the Skies On 23rd October 1946. the two capitals of the two wings of Pakistan. Mohammad Ali Jinnah. Pakistan was born. Karachi-Quetta-Lahore and PAKISTAN INTERNATIONAL AIRLINE Page 9 .Air transport has probably never been more important to the development of a new nation than in the case of Pakistan. Orient Airways. Four Douglas DC-3s were purchased from Tempo of Texas in February 1947 and operations commenced on 4th June 1947. had at its helm Mr. on a priority basis. three crew members. Orient Airways Ltd. Mr. Initially registered as a pilot project in Calcutta.K. Jinnah realized that with the formation of the two wings of Pakistan. With his singular vision and foresight. when Pakistan was still in the offing. Mr. a new airline was born. Ispahani.A. which also happened to be the first postwar international sector to be flown by an airline registered in India. separated by 1100 miles. M. the two capitals. a swift and efficient mode of transport was imperative. Ispahani as Chairman and Air Vice Marshal O. The birth of a new nation generated one of the largest transfers of population in the history of mankind. Orient Airways transferred its base to Pakistan and established a vital link between Karachi and Dacca. a leading industrialist. Subsequently. With a skeleton fleet of just two DC-3s. Orient Airways launched its scheduled operations in a fairy-tale manner.
as fleet expansion was a grave necessity for the airline. there was much criticism. The outcome of the merger was the birth of a new airline. to serve the Pakistani community at large. New PAKISTAN INTERNATIONAL AIRLINE Page 10 .Karachi-Delhi Calcutta-Dacca. through PIAC Ordinance 1955 on January 10. However. The provision of transportation to expatriates has remained one of the foremost priorities of the national airline. and continues to be. PIA's focus was. It was then that the Government of Pakistan decided to form a state-owned airline and invited Orient Airways to merge with it. Moreover. glitzy capital city of London. in their opinion. it had become increasingly apparent that additional capacity would have to be inducted to cater to the growing needs of the sub-continent. A New National Flag Carrier for Pakistan Orient Airways was a privately owned company. as the public could not comprehend or justify the need to operate an international route when. Orient Airways had established the nucleus of overhaul and maintenance facilities and acquired trained pilots. with limited capital and resources.to the glittering. In addition to transport activities. Orient Airways had acquired 10 DC-3s and 3 Convair 240s which were operated on these routes. In 1950. measures which proved to be a great asset for PIA during its teething phase. which it invested in the purchase of aircraft and spare parts. engineers and technicians. Management New Directions. New Planes. It could not be expected to grow and expand independently. other projects vital for a developing country should have been given a higher priority. Initially. via Cairo and Rome. By the end of 1949. PIA earned substantial foreign exchange through international services. PIA’s First International Service The year 1955 also marked the inauguration of the fledgling airline's first scheduled international service . 1955.
PAKISTAN INTERNATIONAL AIRLINE Page 11 . Mr. Super Constellations and DC-3s. due to two mishaps. At this juncture. the service was discontinued in 1966. Viscounts. expansion. Ispahani was the first Chairman of the new dynamic airline. With his visionary leadership. it was the first Managing Director of PIA. on his departure from the airline. which houses the entire major departments of the airline. Dacca. who in his 4 year tenure. the Government of Pakistan appointed Air Commodore Nur Khan as the Managing Director of PIA. PIA possessed a small fleet which comprised of Convairs. this period has often been referred to as the "golden years of PIA". M. Zafar-ul-Ahsan. Unfortunately. While Mr.000 passengers during the first year of operation. got the ball truly rolling and set the shape of things to come. the airline took on the mammoth task of initiating a cross-Atlantic service from Karachi to New York. it was regarded as a stellar operation. PIA's helicopter services carried over 70. In March 1960. was the brain-child of Mr. At the time. Chittagong. and growth were keywords that the new management was committed to. In 1961. the employees presented him with a silver replica of the building with the caption. In aviation circles. orders were placed for two Super Constellations and five Viscounts which were to be delivered in 1959. PIA 'took off' and within a short span of 6 years. Boeing 720Bs and Sikorsky helicopters. "The House You Built". Comilla and Ishurdi. Helicopter services in East Pakistan had gained momentum by 1962 and expanded to include Sylhet. PIA had placed orders for more new aircraft. route which later proved to be very successful.In 1956. In fact.A. This trail-blazing accomplishment resulted in PIA becoming the first Asian Airline to operate a jet aircraft. equal to any other in the world.Ahsan. setting trends for the future. Zafar-ul. By this time. gained the stature and status of one of the world's frontline carriers. In 1959. The PIA Head Office building at Karachi Airport. PIA launched its first Boeing 707 jet service on the London-Karachi-Dacca. Development. which included Fokker F-27s.
imprinted PIA's name on the international market. PIA completed the flight in 6 hours. The Founder of the Nation. Asghar Khan took over the reins of PIA for a tenure of 3 years. The war between India and Pakistan. Style. The airline continued up the growth curve. further tested the national airline. CAA Air Navigation Order (ANO 91. PIA initiated SMS awareness and implementation in July 2008. In 1964. PIA expanded its fleet further with the addition of a fourth Boeing 720B and two Fokker F-27s. 43 minutes. PIA awarded initial certification on SMS in 27th February 2009 by CAA. 51 seconds. The uniforms were an instant hit. the airline's Viscounts were proving inadequate owing to traffic growth. and had to be replaced by Tridents. more than any other single factor. Riding high on the crest of success. a record which remains unbroken to this day. PIA set out to break the record for the fastest flight between London and Karachi. PIA played a major role in providing logistical support to the Armed Forces by operating special flights using Boeings. this move. Mr. In 1966. PIA earned the distinction of becoming the first airline from a noncommunist country to fly into the People’s Republic of China. By this time. PIA achieved another historic first. 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 . A number of highpoints are attributed to this period. A collective pride and joyous buoyancy was pervasive within the PIA family. Glamour. receiving two Fokker F-27s. Well before the issuance of this ANO.0032 issued in September 2008) binds all airlines operating in Pakistan to have SMS. if not the most significant.Historic Firsts and Unbroken Records In 1962. The most colourful. during 1965. regarded as major milestones in the chequered history of the airline. the airline saw a change in the top slot. and Charisma Around this time. 1964. a system of feeder services linking eight new points in West Pakistan was introduced. two Boeing 707s and one Trident in the following year.Pakistan. occurrence for PIA was the introduction of a new airhostesses' uniform designed by none other than the renowned French designer. Air vice Marshal. and Viscounts. On 29th April. both at home and abroad. and this came into evidence during the war. With representatives of FAI (Federation Aeronautique International) on board to monitor the official timings. Pierre Cardin. Serious development had become a reality and the PIA team continued to move ahead with ambitious plans and goals for the national flag carrier. Taking the aviation world by storm. PAKISTAN INTERNATIONAL AIRLINE Page 12 . PIA became a household name in Pakistan in the mid sixties. with a Boeing 720B. PIA's first service to China was from Karachi to Shanghai via Canton. Super Constellations. In 1964-65. finding the upper winds forecast favourable. Jinnah had predicted that the Pakistan Air force would need the support of a civil airline in special circumstances.
by installing Pakistan's first computer. training was initially imparted in the T-shaped building which has now become the PIA Dispensary. come a long way. PIA added additional destinations. PIA's growth continues unabated and the airline now operates globally. with the airline's expansion and increased capacity. PAKISTAN INTERNATIONAL AIRLINE Page 13 . A new Jet Hangar for Boeings with a supporting airframe overhaul shop was completed and commissioned in 1968. The stripes. was also completed and commissioned around this time. was first conceived and developed during 1961-62. and cuttingedge technology to support its ever expanding operations. a universal symbol of sport. The familiar PIA green was reinforced with moss green and pale blue stripes were incorporated into the new corporate identity.The Pursuit of Excellence Through Technology and Quality Control Not content with a number of historic firsts under its belt. in addition to the major cities of Islamabad. sporty 90's look. an IBM1401. even today. Besides visible development and growth in traffic and revenues in the sixties. PIA's first Engine Overhaul Shop. Squash. However. Hockey. PIA made history yet again. Impressive statistics for a comparatively young airline. covering the entire domestic landscape and international destinations spread over 4 continents. since its inception in 1955. Chess. which caters. located near the Head Office building. in 1967. Over the years. new equipment. in keeping with the changing times. The Ground Training School (GTS) now known as the PIA Training Centre. Bridge. PIA's players have always been at the forefront of Pakistani Cricket. Football. Peshawar. the need for a second Flight Kitchen became imperative. PIA has indeed. Ushering In a New Era of Growth and Development PIA heralded the nineties by donning a bright new corporate identity. The nineties also saw the expansion of PIA's massive Hajj and Umrah operations to Pakistan's smaller cities. Quetta and Karachi. Polo and Table-Tennis teams. PIA set up its own Flight Kitchen in Karachi. highlighted PIA's active participation and sponsorship of a diverse range of national games. In 1970. Lahore. close to the Head Office building. PIA introduced a smart. Oldtimers may remember the flutter that the earlier green and gold livery had created when it was first introduced in 1974. Interestingly. to the national airline as well as other carriers.
come a long way. is heading PAKISTAN INTERNATIONAL AIRLINE Page 14 . the Founder of the upcoming nation. instructed Mr. a swift and efficient mode of transport was imperative. Mr. a leading industrialist. M. when Pakistan was still in the offing. Ispahani. covering the entire domestic landscape and international destinations spread over 4 continents. With his singular vision and foresight. Where is the company standing? PIA's growth continues unabated and the airline now operates globally. Impressive statistics for a comparatively young airline. In June 1946. since its inception in 1955.SITUATIONAL ANALYSIS Where the Company is coming from? Air transport has probably never been more important to the development of a new nation than in the case of Pakistan. separated by 1100 miles.A. Where is the company heading in future? PIA tremendously towards a bright future in a positive manner. Mr. Mohammad Ali Jinnah. PIA has indeed. on a priority basis. to set up a national airline. Jinnah realized that with the formation of the two wings of Pakistan.
i. Organizational Hierarchy PAKISTAN INTERNATIONAL AIRLINE Page 15 .
MALL ROAD LAHORE – 44000 PAKISTAN INTERNATIONAL AIRLINE Page 16 .LOCATION OF A OFFICE HEAD OFFICE – KARACHI PIA BUILDING JINNAH INTERNATIONAL AIRPORT KARACHI .72500 REGIONAL OFFICE – LAHORE PIA BUILDING NEAR WAPDA HOUSE.
Khalifa Shujauddin Road. Club Road Phone 5689631 Fax 5677106 Cargo Phone 2904/2908/2140 Quaid e Azam International Airport Phone 9043721/9042011/111-222-742 PIA Building. 385/9209969 Ext. Sethi Masjid. 49 Blue Area. 285 PIA Building. Lahore Phone 9036999 Fax 9202321 Cargo Phone 9202325 Cargo Fax 9202307 Opp.PIA Booking Office Location City KARACHI Contact details Sidco Centre. Noor Mehal Road Phone 882303/885989 Fax 0621-882305 13 Defence Officer's Colony Bannu Cantt. Stretchen Road. Mansehra Road Phone 0992-9310254/9310256 Fax 0992-9310255 Noor Mansion. Phone 9270121/9270122 Polo Ground. Shafi Court.20 lines PIA Cargo Booking Office. Chitral Phone 2863/2963/2563 Cargo Phone 2863/2963/2563 KARACHI KARACHI ISLAMABAD LAHORE ABBOTTABAD BAHAWALPUR BANNU CHITRAL PAKISTAN INTERNATIONAL AIRLINE Page 17 . Islamabad Phone 9209911 Fax 9209966 Cargo Phone 5591071 Ext.15 lines Fax # 5680050 Cargo Phone 5689631 . Phone 9206721 .
Gwadar Phone 2222 Cargo Phone 2222 PIA Booking Office. Phone 634131/634132/634133 / 111-786-786 Fax 677875 Cargo Phone 626001/626214/626215 Airport Road. Jacobabad Phone 3686/512996 Cargo Phone 3686 Main Bazar Phone 289 Cargo Phone 289 PIA Booking Office. 15. Pasni Phone 210501 GILGIT HYDERABAD JACOBABAD JIWANI KHARIAN KHUZDAR MIANWALI MULTAN MUZAFFARABAD NAWABSHAH ORMARA PARACHINAR PASNI PAKISTAN INTERNATIONAL AIRLINE Page 18 . Road. Quaid e Azam Road Phone 62146/64172 Fax 62546 Circular Road Phone 9280246/9280248 Fax 9280247 Cargo Phone 9280249 26 New Civil Lines.DALBANDIN DERA GHAZI KHAN DERA ISMAIL KHAN FAISALABAD GWADAR London Road. Kharian Phone 2904/2908/2140 Cargo Phone 2904/2908/2140 Khurk Road. Phone 9200937/9200938/111-786-786 Fax 9200071 Cargo Phone 9200069/9200626 PIA Booking office. Gilgit Phone 3390 Cargo Phone 3390 PIA Booking Office. Ormara Phone 510/547 Cargo Phone 510/547 Tull Road. Dalbandin Phone 210519 Cargo Phone 25519 11 Khan Market. Civic Center. Muzaffarabad Phone 6299 Cargo Phone 6299 Kutchery Road. Thandi Sarak. The Mall. GSR Plaza. Khuzdar Phone 412225/412580 Cargo Phone 412225/412580 PIA Booking Office. Phone 9200566 Cargo Phone 9200080 Email hdduupk@piac. Block No.pk Station Road. Mianwali Phone 32887 Cargo Phone 32887 65 Abdali Road. Parachinar Phone 2461/2099 Cargo Phone 2461/2099 Aslam Shah Market.T. G.com. Chattar. Nawabshah Phone 4613/4614 Fax 0241-4615 Cargo Phone 4614 Aziz Market.
Zhob Phone 2875/3366 Cargo Phone 2875 QUETTA RAHIM YAR KHAN RAWALAKOT RAWALPINDI SUI SAIDU SHARIF SIALKOT SHIKARPUR SKARDU SUKKUR TURBAT ZHOB PAKISTAN INTERNATIONAL AIRLINE Page 19 .Cargo Phone 210501 PESHAWAR PIA Building. Peshawar. Cantt Phone 271178/270214 Cargo Phone 271178/270214 17 Hali Road. Turbat Phone 413355 Cargo Phone 412322 11-A Market Road.9310494 Fax 071 . Sui Phone 071-83092 Cargo Phone 071-83092 Faizabad Road Phone 0936-711092 /711137 Fax 711148 Cargo Phone 812053 Cargo Fax 710651 Jinnah Islamia College Road. The Mall. Shikarpur Phone 512800 Cargo Phone 512809-114 Khusho Bahg. Cantt Phone 820901/820861 Fax 820871 Cargo Phone 820861/820441 Iqbal Complex Phone 5032 / 75432 Cargo Phone 5032 / 71132 PIA Booking Office.T.com. Rawalkot Phone 3156 5. Phone 9272211/111-786-786 Fax 9272244 Cargo Phone 5567011 S.G.9310491 Cargo Phone 22125 Email skzuupk@piac. Rawalpindi. Skardu Phone 2941/3325 Cargo Phone 2291/3325 Address Khan Plaza. Quetta. Minara Road. Sialkot Phone 583701-5 Cargo Phone 583709 Address Station Road. Ltd.C. Sukkur Phone 071 .pk Commisionery Road. Arbab Road.
Jinnah International Airport Karachi Allama Iqbal International Airport Lahore PAKISTAN INTERNATIONAL AIRLINE Page 20 .
PIA Domestic Network PIA International Network PAKISTAN INTERNATIONAL AIRLINE Page 21 .
2. Corporate secretary. AHMAD MUKHTAR – Minister of Defence & Chairman PIA SYED NASEER AHMAD MALIK NAZIR AHMAD MR. Executive Management and Auditors under different departments. 3.government organization. 6. MIAN IJAZ UL HASAN PAKISTAN INTERNATIONAL AIRLINE Page 22 . 5. Head of Internal Audit. 4. Nature of Business The nature of Pakistan international airlines is transport & services though air. 7. GEN (RETD. That is 80% government & 20 & private.) SYED AKTER ALI – Federal secretary Defence CAPT. CH. MOHAMMAD AIJAZ HAROON – Managing Director PIA PROF. Board of Directors 1.500 employees working in Pakistan International Airport (PIA) which includes Board of Directors. JAVED AKHTER LT.Total Number of Employees There are total 18. and by road Type of Ownership They are semi.
11. MR. MR. MR. MR. 6. 5. HYDER & CO. ARIF MAJEED – CHEIF FINANCIAL OFFICER MR. 3. Administration & coordination MR. CAPT. MESSRS FORD. RAHMAN 2. 2. ANJUM. 9. S FAZAL AHMAD Executive Management 1. 7. 9. S KAMRAN HASAN – Director Auditors 1. MESSRS. logistics and Food services MR. 8. SHAHNAWAZ REHMAN – Director – Corporate Planning MR. MUHAMMAD ZIYAD A SYED – Director – Finance MR. SHAHID SARWAR – Director – Information Technology MR. M HANIF PATHAN – Director – HR. 11. MUHAMMAD SHUAIB Head of Internal Audit 1. MR. 4. SHAHID. MR. 10. MOHAMMAD AIJAZ HAROON – Managing Director PIA MR. SIDAT. IMRAN AHMAD KHAN – Director – procurement. 10. MR.8. 12. MUBASHIR IFTIKHAR HUSAIN LAWAI SHAUKAT ALI RANA SALMAN SADDIQ UE – Federal Secretary Finance Corporate Secretary 1. SHUJA NAQVI – Director Flight Operations MR. DILAWAR FAREED BEG – Director – Training & Development MR. MR. RHODES. ASIF. MAQSOOD AHMAD – Director – Engineering & Maintenance MR. MR. SALAHUDIN – Director – Marketing AVM MUHAMMAD KAMAL ALAM SIDDIQUE – Director – Precision Engineering Complex CAPT. PAKISTAN INTERNATIONAL AIRLINE Page 23 . 13.
Vision & Mission PAKISTAN INTERNATIONAL AIRLINE Page 24 .
Vision “PIA’s vision is to be a World class airline. innovative products and absolute safety” Mission Employee team will contribute towards making PIA a global airline of choice through: Offering quality customer service & innovative product. meeting customer expectations through excellent services. Using state-of-the-Art Technologies Ensuring cost effective measures in procurement and operations Developing safety culture PAKISTAN INTERNATIONAL AIRLINE Page 25 . ontime performance.
Goals & Objectives PAKISTAN INTERNATIONAL AIRLINE Page 26 .
PAKISTAN INTERNATIONAL AIRLINE Page 27 . efficient. economical and properly coordinated domestic as well as international air transport system. and to carry all forms of aerial work. following are the main objectives of PIA Corporation. To provide for the instruction and training in matters connected with aircraft or flight by aircraft of persons employed or desirous if being employed either by the corporation or by other person. To promote any organization outside Pakistan for the purpose of engaging in any activity of a kind which the corporation has power to carry out. run. any hotel or business connected therewith. adequate. manage or participate in the running management of.GOALS & OBJECTIVES According to PIAC Act 1956. To acquire. To provide and further develop safe. own. To operate any air transport service or any flight by aircraft for a commercial or other purpose.
accessories owned by the corporation or by any other person. whether movable or immovable. hold or dispose of any property. overhaul. To acquire. reconstruct assemble or recondition aircraft. vehicles or other machine parts. To repair. or any transport undertaking. External Assessment PAKISTAN INTERNATIONAL AIRLINE Page 28 .
STEPEL ANALYSIS Social Factors Ethnic traffic is present on PIA Language barriers are not present Act of patriotism High traffic on social event or Tehwars like Eid. Basant. Independence Day etc Technological Factors Supply chain is not present Logistics issues are there Sales teams are not updated No coordination of departments Economics Factors Increase fuel prices increase tickets prices Inflations creates problems Market slump PAKISTAN INTERNATIONAL AIRLINE Page 29 .
Decreasing in middle class Political Factors Political instability Political pressure • Flying at low cost • Bilateral promises • Non profit routes Environmental Factors Fuel emission Green fuel Legal Factors Liquor can’t be served Firing of employee (court issues) Porter’s Model PORTER’S FIVE FORCES MODEL Macro environment Political factors Economic factors BARGAINING BARGAINING POWER OF POWER OF BUYERS: ↑ BUYERS: ↑ THREAT OF A THREAT OF A NEW NEW ENTRANT: ↓ ENTRANT: ↓ Intensity of Intensity of competitive competitive rivalry: ↑ rivalry: ↑ PIA THREATS THREATS OF OF SUBSTITUT SUBSTITUT E E PRODUCTS PRODUCTS :↑ :↑ BARGAININ BARGAININ G POWER G POWER OF OF SUPPLIER: ↓ SUPPLIER: ↓ PAKISTAN INTERNATIONAL AIRLINE Social Forces ( High) Page 30 Technology .
Even there are no barriers to entry but when we look towards the capital requirement these is very high and its risky business INTENSITY OF COMPETITIVE RIVALRY: ↑ Number of competitors is Industry growth rate is Fixed cost are Storage costs are Product differentiation is Switching costs are High Low PAKISTAN INTERNATIONAL AIRLINE Page 31 .THREAT OF A NEW ENTRANT: Barriers to entry Capital requirements are High Low There is high threat of potential entrants to the in this business.
some by Saudia like Marhaba. Thai air ways low cost carriers and many more BARGAINING POWER OF SUPPLIER: ↓ Importance of customer to the supplier is Differentiation of the supplier product and services is Concentration relative to buyer industry is Switching cost of the buyer are High low The bargaining power of supplier is only high when we talk about the prices of fuel which is highly important for an air industry otherwise the remaining ingredients are not effecting this industry as highly as to some other business BARGAINING POWER OF BUYER High low PAKISTAN INTERNATIONAL AIRLINE Page 32 . fixed and storage costs are high and product differentiation is low. There are many other companies such as air Arabia by Sharja. This is because exit barriers are high. Another factor that strengthens the threat of existing rivalry is that the corporate stakes are high THREATS OF SUBSTITUTE PRODUCTS: ↑ Profitability of industry producing substitute is Rate of improvement in priceperformance relationship of substitute product is High Low The There is a huge threat of substitute products.There is high threat of existing rivalry.
BCG MATRIX FOR PIA Business growth rate Pakistan air lines PAKISTAN INTERNATIONAL AIRLINE Page 33 . They buy tickets form there near available point and they also buy ticket of air line which cost less to them.Product differentiation of supplier is Switching cost are Product differentiation are The power of buyer is very high.
Based on these assumptions. These are as follows: Cash Cows: Which have high market share but low opportunity for growth Stars: Which have high market share and high opportunity for growth Question marks: Which have high opportunity for growth and low market share Dogs: Which have low market share and low opportunity for growth.This is a strategy tool that guides resource allocation decision on the basis of market share and growth rate of SBUs. The B.C. SWOT ANALYSIS Strengths Point to point frequency (Lahore to London) High quality services People oriented Organization (No language problem) Govt. sponsored organization Perfect timings Abroad Pakistanis prefer PIA (patriotism) Healthy internal environment Weaknesses Less international traffic Liquor is not served so less traffic Weak rewards & appraisal Less effort in the field of marketing High Fares Over staffing (over burdened employees) Page 34 PAKISTAN INTERNATIONAL AIRLINE . Pakistan air lines have been classified as a cash cows because it does have a high market share which is 67 percent in the air line industry domestically and 30 percent internationally and low business growth opportunity.G matrix divides organizations into four different categories.
07 4 3 2 2 4 4 3 2 2 2 2 0.03 0.04 0.16 0. Restricted vise system Weight s Rating Weighte d Score 0. Traffic ethnic 2. courier service domestically can be internationally Low cost carriers Better training programs Have an opportunity to grow and expand throughout the country Threats All domestic and international carrier Fluctuating petrol prices Government changing Barriers to investment for abroad due to country conditions Time taken by embassy to accept visa Terrorism Busy flight schedule Open sky policy High amount of loan EFE Matrix Key External Factors Opportunities 1.52 0.13 0. Speed ex.05 0.08 0.09 0.09 0.05 0. Low cost carriers 5.08 0.14 PAKISTAN INTERNATIONAL AIRLINE Page 35 .14 0. Big markets available that are un served 3. Have an opportunity to grow and expand throughout the country Threats 6.10 0.08 0. Fluctuating petrol prices 8.27 0.07 0. Government changing 9. courier service domestically can be internationally 4.10 0. Time taken by embassy to accept visa 11.09 0.32 0. All domestic and international carrier 7. Lack of professionalism Low salary of engineers Opportunities Traffic ethnic Better recruitment policy Big markets available that are un served Speed ex.36 0. Barriers to investment for abroad due to country conditions 10.
10 1. conservative. the SPACE Matrix analysis functions upon two internal strategic dimensions which are financial strength (FS) and competitive advantage (CA). The SPACE Matrix is broken down into four quadrants as being aggressive.45 0.12.30 0.00 Rating 3 3 2 2 3 3 3 4 Score 0.10 0.18 0.27 0. Economic slump Total 0.40 0.30 0. defensive.07 0.45 0.36 2.09 0. SPACE MATRIX FOR PIA Internal strategic position External strategic position PAKISTAN INTERNATIONAL AIRLINE Page 36 .14 0.39 0. the SPACE Matrix methodology also studies two business’ external strategic dimensions such as environmental stability (ES) and industry strength (IS). After drawing these SPACE matrix graph.18 0. The CA (values from -1 to -6) and IS (values from +1 to +6) are representing by the X-axis of the Cartesian graph whereas the FS (values from +1 to +6) and ES (values from -1 to -6) are representing by Y-axis.88 Shaheen Rating 2 1 1 1 2 1 2 3 Score 0.30 0. It can also used to determine what sort of strategy the company should undertake. Besides. the overall strategic positioning of a company can be determined.40 0.15 0.07 0. Additionally.13 0.10 0.20 0.15 0.12 1.30 1.26 0.80 Competitive Profile Matrix PIA Critical Success Factors Service Quality Market Share Advertisement Customer Expectation Safety Reliability Social Responsibility Patriotism Total Weight s 0.20 0.10 0.15 0.00 3 3 0.13 0.15 0.45 0. Visa rejection cases 13.80 Aero Asia Rating 1 1 1 2 3 2 2 3 Score 0.40 2.56 SPACE MATRIX Strategic Position & Action Evaluation (SPACE) Matrix is another management tool used to help analyze a company.30 1.20 0.07 0. and competitive.
20 -1. +1 worst)] +1: Return on Investment +1: Leverages +3: Liquidity Environmental Stability (score: -1 best.75 Total y-axis score: +3.20 Industry Strength (IS) (score: +6 best. -6 worst) -2: Market share -2: Service Quality -2: Customer Loyalty & reputation -5: Management Experience -1: Direct Flights Average: -2.Y-axis Financial Strength (FS) (score: +6 best.40 PIA’S SPACE MATRIX GRAPH PAKISTAN INTERNATIONAL AIRLINE Page 37 .60 Competitive Advantage (CA) (score: -1 best. -6 worst) -5: Barriers to Entry -2: Inflation rates -3: Technology Changes -2: Competitive Pressure -4: Demand Variability Average: -3.60 = +1.00 +2: Working Capital +1: Cash Flow Average: +1.75 = +2. +1 worst) +5: Growth Potential +2: Financial Stability +5: Ease of Entry into Markets +3: Technologies Know-how Average: +3.40 + 3.60 X-axis Total x-axis score -2.
00.60. we noticed that PIA falls into the aggressive quadrant of the SPACE Matrix. Other possible strategies include product development. It shows that PIA has a strong competitive position in the market with rapid growth. PAKISTAN INTERNATIONAL AIRLINE Page 38 . It is also indicates that PIA should adopt an aggressive strategy.60) + 1 + 2 + 3 + 4 + 5 + 6 -6 -5 -4 -3 -2 -1 -2 -4 Defensive -6 Competitive According to the graph above.Conservativ e Aggressiv e + 6 + 4 + 2 (2. It is located at the coordinates of 2.00 for xcomponent and a y –component of 1. 1. It needs to use its internal strengths to develop a market penetration and market development strategy. integration with other Airlines and also concentric diversification.
make full use of the resources to improve it. It can be done by doing market research to investigate unfavorable performance. Then.SPACE MATRIX CONCLUSIONS • • • PIA’s high reputation helps in attracting customers’ loyalty Compete in an unstable environment PIA should develop new market to various area of Pakistan as well as overseas • • They should expand its services and products for better improvement Eliminate inefficiencies and improves services quality. • • Seek Integration Opportunities such as merger in different areas Hire potential employee either from competitors or from other sources to get bigger improvement • Seek new and good management staffs to get a better company direction CORE COMPETENCIES & KEY SUCCESS FACTORS PAKISTAN INTERNATIONAL AIRLINE Page 39 .
CORE COMPETENCIES & KEY SUCCESS FACTORS PAKISTAN INTERNATIONAL AIRLINE Page 40 .
AFFORDABILITY SERVICES Personalized. Value Added Services COHESIVENESS Respect for Individuals. Environment SOCIAL RESPONSIBILITY Welfare. CUSTOMER EXPECTATION CONVENIENCE. CARE. Products. Health & Education PAKISTAN INTERNATIONAL AIRLINE Page 41 . Passionate INNOVATION New Ideas. Courteous. Team work & Effective Communication INTEGRITY Business Ethics. Employees. Accountability & Transparency RELIABILITY Loyalty & Consistence SAFETY Passengers.
PAKISTAN INTERNATIONAL AIRLINE Page 42
PIA is driven by the highest standards of corporate governance and social responsibility. As a public sector organization and a business leader, PIA believes in building strong relationships with customers, partners, employees, and the communities in which it operates. The organization's values are exemplified in a range of corporate initiatives designed to impact positively on the lives of multiple stakeholders. PIA practices active corporate citizenship through social services, support for non-profit organizations, medical services for employees, the promotion of sports, and educational initiatives. PIA has institutionalized the practice of good governance by establishing a Corporate Social Responsibility Committee. The Committee provides a platform to evaluate, update, and recommend best practices as PIA continues on its mission to adhere to business ethics and stamp out corruption. Corporate Social Responsibility (CSR) is woven into the fabric of daily operations at PIA. Our employees wholeheartedly contribute to our commitment to develop the organization, the communities in which we function, and the country. PIA is proud of its human resource as they in many ways initiate & actively participates in welfare missions. PIA is gifted with teams of professionals who pursue excellence and deliver confidence. With a Leadership that understands the true meaning of Social Accountability, PIA has been able to realize vision of social accountability.
PAKISTAN INTERNATIONAL AIRLINE
PAKISTAN INTERNATIONAL AIRLINE
policies and strategies are made by corporate level people either related with any department of PIA. what is being done or not. Once the higher level strategy or strategic intent is developed. Functional Level Strategy At the functional level. such as providing information on customer feedback or on resources and capabilities on which the higher level strategies can be based. At this level.STRATEGIES UNDERTAKEN AT THE Corporate level strategy According to the PIA management. they are decentralized. the functional units translate them into discrete action plans that each department or division must accomplish for the strategy to succeed. They are centralized at corporate level. All the departments like R&D. General Managers are involved in developing the business level strategies. all the managers of different departments discuss the issue relating to functional business processes and value chain. The Managing Director (MD) and Chief Financial Officer (CFO) make the strategies on long term basis and make plans about PIA’s future. HR. mission & objectives and develop synergies at the corporate level. When PIA have to implement their strategies then they involve Business level people and they belong to the related department whose strategy is going to be implemented and discuss about developing & sustaining the competitive advantage for the products and services they have produced or offering. so no single employee is aware of. Functional units of PIA are involved in higher level strategies by providing input into the business unit level and corporate level strategy. Business Unit Level Strategy At this level. These strategies are made at the Head Office. Marketing. All Directors. Finance. MANAGEMENT STRATEGIES PAKISTAN INTERNATIONAL AIRLINE Page 45 . They keep these strategies confidential and secret. Operations are involved so that it is decided that how the strategies will be executed efficiently & effectively. They identify company’s overall vision.
manager in Lahore and Islamabad office don’t even have the authority to take any decision. But due to crisis.HRM • • • • • Proper recruitment process Training & development Specialized people are hired Head office in Karachi Proper organization structure ADMINISTRATION Head office is in Karachi so every single operation is done in head office and offices in other cities. they are performing the duties as assigned by the head office DECISION MAKING All the decisions are taken at higher level. If there is some conflict or issue. So they have CENTRAILZED decision making. PIA is not focusing on motivation and incentives which is affecting the employees and the passion for the organization. The employees. Managing Director makes decision and all the operations are done at head office Karachi. which is not a positive sign in any organization. MARKET PAKISTAN INTERNATIONAL AIRLINE Page 46 . CEO. they will have to consult at head office and wait for their decision. MOTIVATION AND INCENTIVES PIA’s only motivation is in the form of handsome salary with respect to their competitors and monetary bonuses and a yearly increment of salary from 100% to 200% of salary for executives.
MARKET ANALYSIS PAKISTAN INTERNATIONAL AIRLINE Page 47 .
MARKET SEGMENTATION OF PIA PAKISTAN INTERNATIONAL AIRLINE Page 48 .
1. TARGETING STRATEGY OF PIA PAKISTAN INTERNATIONAL AIRLINE Page 49 . Demographic Segmentation of PIA: Income Segmentation Occupation Segmentation 2. Loyalty Status 4. Eid’s Occasion. Behavioral Segmentation Occasion Segmentation Hajj’s Occasion. Geographic Segmentation In this segmentation PIA focuses both on segments domestic and international 3. Psychographic Segmentation of PIA Social Class Tourists Religious Travels Pakistani Expatriates The existing market segmentation strategy of PIA is reasonable enough because it covers all necessary parameters that are to be focused in doing market segmentation for Airline Company. New Years’ Occasion.
there are two main sub heads of working class and business class. In business class all those people are included who are having business. From the Behavioral Segmentation PIA‘s target audience is categories as follow. PIA is targeting the income and occupation oriented people. The working class includes all those who are working as an employee inside and outside the country. 2. PAKISTAN INTERNATIONAL AIRLINE Page 50 . From the Demographic Segmentation. Hajj’s Occasion When Hajj operation in going all those people flying from different cities of Pakistan to Saudi Arabia for the performance of Hajj. Income Segmentation From income segmentation of PIA. From Geographic Segmentation of PIA all the audience from the domestic and international regions are included in domestic people within the country are included and people residing outside Pakistan. The classification of both categories is as follow. Occasion Based Market Segmentation of PIA. 3. Eid’s Occasion When Eid occasions are near people within the cities and outside the country move to their homes for having Eid Occasion together with family New Years’ Occasion Now people prefer to have New Year with their family that’s why all those people coming back to Pakistan from different countries or moving outside Pakistan to different countries and also all those people moving within the country are targeted over here. those who falls under the category of upper class and upper middle class Occupation Segmentation From occupation Segmentation that PIA is taking in to account.PIA’s Existing Target Audience 1.
But all those who travel a lot get the benefit of frequent fliers which carries few discount rates on the tickets. Pakistani Expatriates As PIA is a national flag carrier airline that’s why people residing outside the country feel a unique sort of feeling to get into the National Airline. PAKISTAN INTERNATIONAL AIRLINE Page 51 . Tourists All the tourists from different regions of the country or from different countries come to Pakistan for tourism purpose or go outside the country. the target audience of PIA will be the following. Loyalty Status PIA gives different benefits to the fliers. religious travelers and Pakistani Expatriates. From the Psychographic Segmentation of PIA. PIA is not just and Airline but also acts as the ambassador of Pakistan in the whole world. To such audience PIA not only gives the discount facility but also the facility of pick and drop to them. 4. Social Class In Social Class PIA targets the tourists. Because PIA is having highest rate of linking the remotes areas of Pakistan Religious Travels All the religious travelers for example people going for Hajj etc are targets over here.
VARIABILITY Services are highly variable. equipment. Service firm can take two steps towards quality control. PIAC is also providing services to the nation. people. as they depend on who provides them and when and where they are provided. Promotion. felt. process and physical evidence. which can be categorized as follows: • • Seat service (for passengers) and Space service (for cargo) The characteristics of the services provided by PIAC are depicted in the following lines. INSEPARABILTY Services are typically produced and consumed at the same time. but it also includes services. There are literally dozens of marketing mix tools. So these 7 P’s of PIA are discussed as follows: PRODUCT A product is anything that be offered to a market for alteration. PIA spends substantial sums to train their employees in providing good service. communication material. the buyers will look for signs and evidence of the service quality. or consumption that might satisfy a want or need. then the person is a part of service. tested. Therefore. they cannot be seen. Unlike physical product.MARKETING MIX (7 P’s) Marketing Mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. INTANGIBLITY Services provided by PIA are intangible. If the service is rendered by a person. Therefore. people. Most products we think of are physical products. McCarthy popularized 7 factor classifications of these tools called 7 P’s: Product. Price. to tangibles the intangibles. Place. The first step is investing in good personnel selection and training. They will draw interface about the quality of the service from place. acquisition. To reduce uncertainly. heard or smelled before they are bought. Second step is monitoring customer PAKISTAN INTERNATIONAL AIRLINE Page 52 . Since the client is also present as the service is being produced. symbols and price that they will see. PIA’s task is to manage the evidence. the buyer cannot see the result before the purchase. use.
DOMESTIC ROUTES Prices for domestic routes are fixed by government of Pakistan for PIA. PIA use following strategies for producing a better match between demand and supply. How are prices set? PIA has to deal with pricing aspect in two types of situation. Employees perform only essential tasks during peak periods .Differential pricing to shift some demand from peak to off peak periods . 4. if demand. When demand fluctuates. Price is the amount of money that customers have to pay for the service. different pricing policies are used by PIA. was even throughout the year. Pricing of passenger tickets 2. 1. domestic routes and international routes. 3. The cost plus method is used to set prices at domestic level.Reservation system is one way to manage the demand level. service firms have difficult problems. The PIA’s management estimates the price by using following six steps procedure and sent to the government for final approval: 1. like PIA has to apply much more equipment because of peak period demand on a specific route than it would. PRICE A profit organization faces the task of setting a price on their product / service.Shared services are developed by interline agreements.satisfaction system and PIA also do not properly monitor customer satisfaction. Pricing of Cargo Airways Bill For two types of routes. 2.Non peak demand can be cultivated . On the demand side . Selecting the price objective Determining Demand Estimating costs Analyzing competitor’s prices & offers PAKISTAN INTERNATIONAL AIRLINE Page 53 . PERISH ABLITY Services cannot be stored and they have no self life.Peak time efficiency routines are introduced. and PIA employ it extensively On the supply side .
they also vary by season to season and at peak time. 53. The IATA does not allow any discount on any international routes. PIA establishes the pricing strategies on different international routes keeping in view the following points: 1. Demand for seat.550 LOW PRICES RS.750 49. Selecting the final price INTERNATIONAL ROUTES The prices for international routes are set by International Air Travel Association (IATA). 67. 2. However. greater demand tends to no discount Competitor’s price Cost of operation Type of Aircraft used On the other hand PIA has three categories of their pricing as below. 45.450 57. Selecting a pricing method 6.500 42. Higher prices Shoulder prices Low prices COUNTRIES UK DUBAI HIGHER PRICES RS. 4. ticket shows the full price for the route while airlines charge discounted fare by cutting their prescribed share of profit.500 PAKISTAN INTERNATIONAL AIRLINE Page 54 .5.650 SHOULDER PRICES RS. 3.
In Lahore.Domestic sector = 5% DISTRICT SALES AGENTS These are the agents who exclusively deal with PIA’s ticket and cannot deal in other airlines. PIA has partially owned distribution system. The commission provided to General Sales Agents is: International sector = 12 % Domestic Sector = 5 % PAKISTAN INTERNATIONAL AIRLINE Page 55 . LEVEL OF CHANNEL PIA uses two levels of channels. Many travel agents are provided with the auto ticketing and reservation system. where PIA does not have sales point. However. ONE LEVEL CHANNEL Here travel agents. These agencies can also be stocked and sell the tickets of other airlines.International sector = 9% . Here PIA sells the tickets directly to final users. as intermediaries. PIA has ticket and booking office (see page 17-19) to sell directly to the customers. There are two types of agents which are defined as follows: IATA Agencies There are 30 IATA approved travel agencies which deals with PIA. there is one in Lahore. these are located.PLACE Marketing channels can be viewed as sets of independent organizations involved in the process of making a product or service available to use. A distribution system is a key resource. through its ticket counters. Normally. Commission of these agents is as follows: . are involved in selling of tickets to the customers. All such offices of PIA are computerized and directly linked with the head office at Karachi. which are described as below: ZERO LEVEL CHANNELS It is also known as direct marketing channel.
Some brochures are listed below: BROCHURES UMRAH MADE EASIER PIA offers more flights to Jeddah in May. Agents play an important role in promotion as they convince traveler to travel through PIA. They just use brochures.PROMOTION PIA is not investing much in this area. Pilgrims can now enjoy comfortable and luxurious journey in Boeing-777s PIA 'BUDGET FLIGHT' . Lahore.ENJOY UP TO 39% DISCOUNT ON REGULAR FARES PIA introduces Budget Flight between Karachi. newspapers and some TV commercial when peak season is not there. and Islamabad. June and July for Umrah These additional flights will not only provide more travel options to Umrah Pilgrims but will also enable more people to perform the holy ritual. Fly PIA's new ATR Up to 10kg hand baggage allowed No checked-in baggage Condition apply PAKISTAN INTERNATIONAL AIRLINE Page 56 .
The benefit of even lower fares in the lean travel period. USA & Canada sectors PAKISTAN INTERNATIONAL AIRLINE Page 57 . & Economy Classes. Flexible Fares are applicable on sectors where Revenue Management is implemented. Economy Plus.PIA FLEXIBLE FARES . A variety of discounts in Business. the cheaper you fly.PLAN AHEAD & PAY LESS Book International or Domestic flights as early as possible because the earlier you buy. Conditions apply FLY BUSINESS CLASS WITH A FREE TICKET Buy three tickets and get one FREE Buy one ticket and pay ONLY 50% for your companion The offer is available on International routes only This offer is not available on UK.
with a vast domestic network. RELIABILITY. Same Day Speed PAKISTAN INTERNATIONAL AIRLINE Page 58 .This facility is only valid for the sectors where RM is not implemented DISCOUNT TO STUDENTS ON INTERNATIONAL AND DOMESTIC SECTORS 25% discount offered to students on Domestic routes. AND AFFORDABILITY PIA Speedex delivers documents and parcels to your doorstep. The offer is available only for Economy Class passengers PIA SPEEDEX DELIVERS WITH SPEED. 10% discount on International routes is valid only on the routes where RM is not implemented Offer can be availed exclusively from PIA Booking Offices or the PIA counters at the airport. and the highest standards of customer service. cutting-edge technology. • PIA Speedex offers a range of flexible delivery options to suit your budget and your needs.
This offer will be offer only for Business class. PAKISTAN INTERNATIONAL AIRLINE Page 59 .Overnight Speed Second Day Speed Seasonal Products (New) CLICK 'N' FLY WITH PIA WEB TICKETING Secure online credit card transaction Convenient accessibility from home or office FREE PICK & DROP SERVICE PIA now offers the free pick and drop service from your door to airport.
MAGAZINE PIA will give advertisement in different magazines once after two month with a coupon of 15% off in the following magazines. • • • Times Magazines Spider Aurora 1. Newspaper Advertisement PAKISTAN INTERNATIONAL AIRLINE Page 60 .
PEOPLE An essential ingredient to any service provision is the use of appropriate staff and people. Many British organizations aim to apply for the Investors in People accreditation. which tells consumers that staff is taken care off by the company and they are trained to certain standards. and service knowledge to provide the service that consumers are paying for.961 PAKISTAN INTERNATIONAL AIRLINE Page 61 . Consumers make judgments and deliver perceptions of the service based on the employees they interact with. RANK BOARD OF DIRECTORS CEO HEAD OF AUDITOR PILOTS CO PILOTS ENGINEERS MANAGERS AUDITORS CORPORATE SECURITY OTHERS PROCESS No Of Employee s 11 1 1 78 189 243 13 2 1 17. Head of Internal Audit. Staff should have the appropriate interpersonal skills.500 employees working in Pakistan International Airport (PIA) which includes Board of Directors. aptititude. Executive Management and Auditors under different departments. There are total 18. mentioned as below: • Jung • Dawn • Business recorder We have planned to enlighten our future plans to our cherished customers in the upcoming month. Corporate secretary.PIA will frequently give the advertisement in the most readable newspapers. Essential if the organization wants to obtain a form of competitive advantage. .
air buses. Strictly speaking there are no physical attributes to a service. Ticketing offices are available for customers at all there near destination. air ports are the evidences for customers of PIA Market Share The market share of PIA as domestically and internationally is as PIA Other Unique Selling Preposition (USP’s) POINT TO POINT FRQUENCY They offer direct flights like Lahore to London etc. Paperwork (such as invoices. It’s up to the services receiver from where they want to fly. . Business cards. Uniforms. Furnishings. including some of the following: Packaging. . . ticket offices. There are many examples of physical evidence. Signage (such as those on aircraft and vehicles). . . Brochures. so a consumer tends to rely on material cues. PHYSICAL EVIDENCE It is the material part of a service. Domestic 67% 33% Internationa l 30% 70% PAKISTAN INTERNATIONAL AIRLINE Page 62 . Internet/web pages.In PIA the process is time when the customers buy the tickets and the time of their landing to their destination. The existence of aircraft’s. In Pakistan PIA have airports in different cities. environment. The building itself (such as prestigious offices or scenic headquarters). tickets and dispatch notes). Mailboxes and many others .
PAKISTAN INTERNATIONAL AIRLINE Page 63 .
FINANCIAL Strategies PAKISTAN INTERNATIONAL AIRLINE Page 64 .
Balance Sheet PAKISTAN INTERNATIONAL AIRLINE Page 65 .
Balance Sheet PAKISTAN INTERNATIONAL AIRLINE Page 66 .
Profit and loss account PAKISTAN INTERNATIONAL AIRLINE Page 67 .
Statement of Cash Flow PAKISTAN INTERNATIONAL AIRLINE Page 68 .
Statement of Equity PAKISTAN INTERNATIONAL AIRLINE Page 69 .
456 148.850 1.690.722 2.921.218 6.123.723 375.143 318.COSTS / EXPENDITURES COST OF SERVICES December 31 2008 Rupees in ‘000 Salaries. rate & taxes Printing & stationary Depreciation Amortization Others 7.138 9.170 66.531 853.743 4.336 December 31 PAKISTAN INTERNATIONAL AIRLINE Page 70 .267.809.244 3.848.461 283.517 2.650 286.532 272.879 2.938.196.829.855 5.590 68.619 3.188. Wages & Allowances Welfare & Social security cost Retirement benefits Compensated absences Legal & professional charges Stores & spares consumed Maintenance & overhaul Flight equipment rental Landing & handling Passenger services Crew layover Provision for slow moving parts Staff training Utilities Communication Insurance Rent.943 1.712 2.004.134 96.243 83.927 132.399 2.909 65.038.519 80.707.208 97.547.466 89.138 3.361 5.032.241.112.395.869 334.016 1.597 7.614 2.554 36.800 7.920 DISTRIBUTION COSTS December 31 December 31 2007 Rupees in ‘000 6.833.239 2.124.930 1.005 39.857 7.775 362.
566 8.391 177. rate & taxes Utilities Depreciation Amortization Others 1.958 36.886 4.325 45.196 31.101.782 33.498 87.942 69.022 1.674 PAKISTAN INTERNATIONAL AIRLINE Page 71 .831 192.694 72.376 45.440 1.037 384.905 73.111 1.521 329.500 2.761 24.112 14.2008 Rupees in ‘000 Salaries.376 437.448.482.595.505 5.632 2007 Rupees in ‘000 1.440.706 114.332 35.987 177.766 35.492 30.604 93.046 12. Wages & Allowances Welfare & Social security cost Retirement benefits Compensated absences Distribution & advertising expenses Legal & provisional charges Repairs & Maintenance Insurance Printing & stationary Communication Staff training Rent.389.959 276.543 373.
218 REVENUES PAKISTAN INTERNATIONAL AIRLINE Page 72 .234 77.658 242.408 371.112 551.470 30.256.282 223. Wages & Allowances Welfare & Social security cost Retirement benefits Compensated absences Legal & provisional charges Repairs & Maintenance Insurance Printing & stationary Staff training Rent.562 289.175 61.650 429.976 699.819 379.804 2.906 10.431 19.149 371.828 538.ADMINISTRATIVE EXPENSES December 31 2008 Rupees in ‘000 December 31 2007 Rupees in ‘000 1.162 50.963 152.443 5.631 522.178 289.533 5.371 33.899 331.774.364 133.818.459 3.288 313.066 14.250 44. rate & taxes Utilities Auditors’ remuneration Communication Depreciation Amortization Donations Others 1.633.700 Salaries.967 62.714 872.155 23.006 10.005 510.
686 305.530 183.365 1.849.806 936.546.002.578 686.265 7.744.107 78.817.483 Passengers Cargo Excess baggage Charter Engineering services Handling & related services Mail Room.NET December 31 2008 Rupees in ‘000 December 31 2007 Rupees in ‘000 62. Food & Beverages sales Others 79.592 5.315 4.686 COMPLETE FINANCIAL ANALYSIS PAKISTAN INTERNATIONAL AIRLINE Page 73 .179 1.806 718.390.554.735 865.733 712.REVENUE .171.657 163.688 875.205.458.755 263.157 99.215 9.
This. Consider that the average price of crude PAKISTAN INTERNATIONAL AIRLINE Page 74 . Secondly. the Pak Rupee lost its value against US dollar. has had a salutary effect for the 4th quarter.As a cumulative result of our endeavors.1 billion chiefly because of the accounting requirement of having to book the exchange difference on the entire amount of outstanding US dollar loans.4 billion owing to increase in prices alone had it not been for savings realized through fuel efficiencies and capacity/route rationalization during the course of year. It is evident from the preceding points that based on a constant US$/PKR parity of 2007 and constant oil prices of 2007. the crude oil prices skyrocketed in 2008. As you can see in the above table. The airline has moved closer to the breakeven point in the 4th quarter of the current calendar year and they are poised to eke out a modest profit in the coming year. reaching the highest ever level of US $ 147 / barrel in July & contributing an increase of PKR 15. In actual fact. the loss in 2008 was mainly caused by two extraneous factors both of which were outside PIA’s internal control. PIA’s loss would have been less by around PKR 39. PIA’s traffic performance in the last quarter of 2008 has been quite promising. together with the drop in oil prices and recent relative stability of Pakistani Rupee. the fuel expense would have increased by PKR 18.6 billion.5 billion in the fuel expense over last year. contributing to a net exchange loss of PKR 24. Firstly.
Ratios Liquidity PAKISTAN INTERNATIONAL AIRLINE Page 75 . there is ample reason to nurture realistic hopes of changing the color of PIA’s bottom line in 2009.oil was on average US$ 73/barrel in 2007 and US$ 98/barrel in 2008 while currently it is hovering around US $ 50/barrel. It is noteworthy that the 2008 net loss figure also includes PKR 2.0 billion on account of exceptional / nonrecurring costs / provisions.
2008 13.2823. In which we need net profit and sales of company.623 Cash ratio 1.16 Working capital 13.331-52.331-3.049.251.21 0.905 0.039.282 71.19 0.542 0.905 0.251.798.940 71.251.038 789.049. 2007 Cal.707.331 52.011 PIA is in loss so we are not able to calculate the ratios.542 13.707.039. OTHER STRATEGIES PAKISTAN INTERNATIONAL AIRLINE Page 76 .542 -38.459/52.905 15.975. EPS Turnover ratios ROI Liquidity Ratio: Current ratio Acid test ratio Working capital Cash ratio Pakistan International Airline Liquidity ratio Current ratio Quick ratio Cal.25 15.707.251.668.905 15.542 0.039.940 52.211 -56.049.049.707.726.28271.555/71.
in-flight sales/mail order products. we are not adding the information regarding R&D. They don’t have R&D in their process so. at the right time. wines and spirits. in the right quality and quantity. R&D According to the Management of PIA. individuals. We invite companies that meet our product/service specifications to participate in our tenders. We welcome Companies that manufacture quality products. in-flight equipment.Procurement Is the acquisition of goods or services at the best possible total cost of ownership. Complex procurement could involve finding long term partners – or even 'co-destiny' suppliers that might fundamentally commit one organization to another. Pakistan International Airline procurement lists the various tenders. in the right place and from the right source for the direct benefit or use of corporations. for the divisions of Pakistan Airlines and subsidiaries of the Pakistan Airlines Group Commercial Supplies PIA purchase in-flight amenities. uniforms and office supplies and equipment. non-aircraft parts (e. simulator spares) and services to support our aircraft maintenance and operations. IT Products & Services Information technology plays an important part in our airline systems. beverages. generally via a contract. or even governments. PROBLEM SECTIONS PAKISTAN INTERNATIONAL AIRLINE Page 77 . or needs. Engineering Supplies The Engineering Supplies Department of PIA is the Purchasing Authority for procurement of aircraft parts.g. and as such we welcome vendors who are able to provide quality IT products and services to participate in our tenders .
UNION INFERENCE PIA employees have their unions. Some of them are as followed: POLITICAL INFERENCE Executives are the people who can improve or fail any business. Department working at airport irritates the customers. Departments delay payments. Nowadays. Set up and less like an efficient forward looking organization. chairman of PIA is a PMA political person can’t have as much knowledge of a commercial organization as prompted. Employees sometime misuse the PIA transport MAIN PROBLEMS ACCORDING TO OUR ANALYSIS PAKISTAN INTERNATIONAL AIRLINE Page 78 . Govt. BUREAUCRATIC STRUTURE Character of the organizations is more like on elite govt. so they are facing govt hurdles like: Operations on non economic rates Purchaser of insurance policies from Insurance Corporation PIA functioning under ministry of defence instead of ministry of communication or aviation Most of govt. They should know their basic jobs authorities and responsibilities. Managing director is appointed from outside the organization. talented persons. In PIA. They use their power mostly for low level appointments so the upper and lower appointments affect the rest of proportion. this effects the overall efficiency and business of organization. These executives then select their favourite person for new vacancies weather they have technical knowledge about job or not so.MAIN PROBLEMS ACCORDING TO MANAGEMENT PIA is a large public organization like other organization PIA is also facing some serious problems. GOVERNEMENT HURDLES As PIA is under 80% of government. major problem is that there is high political inference in the appointment and selection area.
agency sale agents don’t realize airport taxes which make complication in realization of revenue At some areas. Lack of coordination Lack of expertise Poor Management Centralized culture Out dated technology Weak HR department Lack of Check & Balance No delegation of authority Poor Strategic decisions Government interference Favouritism Non profitable routes Weak Marketing strategy Old Aged Fleets Refund process is not satisfactory Highest employee ratio per airplane Complaints of employees are not properly facilitated SUB-PROBLEMS Sometimes. jobs are not clearly defined which effect efficiency and working relation of employees PAKISTAN INTERNATIONAL AIRLINE Page 79 .
government provides jobs to those candidates who are actually not eligible for that post. financial crisis. STRATEGIC ALTERNATIVES SOLUTIONS TO SOLVE THE PROBLEMS POLITICAL INFERENCE Executives are the people who can improve or fail any business. The elements of nepotism and jobbery are present in PIA. Rate of motivational campaigns for employees very low For refund. GOVERNEMENT HURDLES The government has created bundles of hurdles for PIA. in different sectors. PAKISTAN INTERNATIONAL AIRLINE Page 80 . As the company is in financial crisis there is a need to privatize PIA along with this. management unions etc in order that the corporate level accept their proposals. so as a result of this. So. They have less association with their work and more towards anti organization activities. government influence on PIA should be reduced in order to provide strong footing in transportation industry. There is element of favouritism from the government side. They should know their basic jobs authorities and responsibilities. jobbery and nepotism should be reduced to favourable extent. Where ever a new government rules. they promises to the people to provide jobs. PIA being a government organization. UNION INFERENCE In PIA the salary packages are not designed in a way that satisfy the whole organization. customers have to come to the office which create problem for them Over booking and mishandling also creates trouble Misappropriation of work is one of the main problems like engineer work as accountant. This is because of political inference Delay in computer up gradation also effect output. the employees has created labour unions.
And when PAKISTAN INTERNATIONAL AIRLINE Page 81 . Marketing or Finance. The hiring of the fresh graduates is not present in PIA which is the requirement of new age. So there is a need to coordination between and HO and Employees in other offices. Out dated technology In PIA. so that they get the updates about coming graduates and hire them according to their requirement. the organization must have contacts with business schools. The departments are running by outdated staff. we didn’t found any latest technology whether we talk about their airbuses they are not using any advance technology. Employees are working around a single point. The element of favoutitism is also present in this category. So. Lack of coordination There is lack of coordination among employees. whether it is HR. So. They don’t know a single thing done at head Office and within the same office. They just perform the tasks assigned to them by the Head office without knowing what is happening in HO. Lack of expertise In PIA. so smooth running of an organization experts are always required. there is a need to extend their networks of decision making. they don’t have expert employees in each department. Centralized culture The culture of the organization is so much centralized. Because if you hire the staff just on the basis of relationship rather than education it always create problem for an organization.Other than these problems that are at managerial level there are also many problems which require solutions. So they feel their self in actual a part of PIA. Poor Management The management of PIA is very poor. They don’t have the authority to take any decisions and that’s why they are not interested in the progress or success or prosperity of the organization.
Poor Strategic decisions The strategies are formulated at the HO and have centralized decision making process. so we didn’t found any proper strategic decisions happening in other offices. so the government interference is there which affects the performance in PIA. Head office should take notice and create strong HR department Lack of Check & Balance As there is not coordination in the departments. and who can listen the problems from the employees’ side & having authority to solve them. and on overall functions of the PIA. They are busy in their routine works and are not concerned more with HR system. strong & efficient HR is considered the backbone of any organization.we talk about departments we cannot find MIS. It must be present for the success of PIA. So. the government interference must be reduced to make PIA stronger and better in future. They just have limited HR officers with limited authorities. So. PAKISTAN INTERNATIONAL AIRLINE Page 82 . PIA has a very weak HR department. SAP. etc. Government interference As PIA is under 80% of government. they must improve their strategic decision by making decentralized environment. all these mentioned system are necessary for a successful organization. staff. so there is no proper check & balance on the employees. Weak HR department In this era. PIA should introduce these technologies for further improvement. AMS. No delegation of authority There is no delegation of authority in PIA. So. So. So there must be a person or authority that has the right of check & balance on the employees.
Business sector should be attracted to operate at full potential. this is the duty of a CEO to exclude the favoritism and give chance to deserving candidates. So. favoritism exists. Refund process is not satisfactory Airline should focus on the customer’s satisfaction. Whether it is favorable for PIA or not such agreements should not be made which are against the favor of PIA. Non profitable routes Whenever Government delegation’s visit to some other country they make some agreements with that country that to start their services in that country. Favoritism There is a lot of favoritism in PIA. refund process should be quick so that customer remains loyal to brand. And do nothing but increases the worry of organization. Most of the employees are hired by the orders of government and where government is involved. Weak Marketing strategy PIA should adopt good marketing policies so that it will bring higher profit and maximum utilization of its available resources.PIA should purchase new Airplane with twin engines these will reduce the operating cost of PIA. Highest employee ratio per airplane PIA should not induct new employees till the time they are needed on the basis of my personal observation at Rawalpindi station I have PAKISTAN INTERNATIONAL AIRLINE Page 83 . Old Aged Fleets PIA should upgrade its fleet as it’s causing the airline higher operating cost and PIA is incurring loss .
2015 PAKISTAN INTERNATIONAL AIRLINE Page 84 . by person PIA had 3 Complaints of employees are not properly facilitated PIA should facilitate employees’ complaints so that whatever the complain is.seen that a task which can be performed employees for that. IMPLEMENTATION PLAN 2009 . it must be facilitated so that the problems occurring to employees be resolved soon.
As mentioned on various accounts. PAKISTAN INTERNATIONAL AIRLINE Page 85 . PIA has a centralized structure that has caused higher conflicts and poor management of employees as decisions are made by the top level management without involving the employees. this leads to complexities in employee tasks as it takes more time to reach the information from top to bottom. Due to this bureaucratic nature of PIA. inefficiencies have crept in and morale of the employees has plummeted over the years. economic problems and leadership styles.CONCLUSION It has been concluded that PIA is in big crisis mainly due to the varying structures. In addition.
However. it was concentrating more on expansion and profitability: an outcome oriented approach. and they will not understand the new process.Delegation of tasks is minimal at PIA. The current status of employees is less control and authority over different tasks apart from their own assigned tasks. PIA emphasizes on experience but as it is under 80% government there is a lot of favouritism while hiring any employee. Therefore. therefore. This has decreased productivity of the employees and consequently of the organization. will not know how to respond to the new situations. They fear that the system will become unstable. PIA turned its attention on employees when it faced competition. the organization has unskilled and non-active employees who may lack in experience as well as in the operations. Relatively effective channels of expressing dissatisfaction are present at PIA. Otherwise. so employees feel distant as far as other issues and problems of the departments are concerned. their security will be lost. action is postponed. PIA have centralized hiring processes. employees feel reluctant to voice their concerns in a meeting amid others and complaints in the suggestion boxes take time to reach bosses and therefore. It has been observed that Pakistan International Airlines (PIA) fears change. PAKISTAN INTERNATIONAL AIRLINE Page 86 . The meetings and suggestion boxes at PIA are ineffective.
we have some recommendations for PIA which we hope will be implemented in the near future. Since employees issues regarding their behaviour would lessen. increased motivation. But we all hope that in the next few years. We have included questionnaire analysis which shows the overall performance and reputation of PIA. PAKISTAN INTERNATIONAL AIRLINE Page 87 .At the end of the conclusion. is still a strong Brand name in Pakistan but due to some economic and other variable issues PIA is facing crisis which is making PIA down. No doubt PIA. easy access to information and resolution of the conflicts (as they would be resolved by the immediate manager time span would then reduced). so it would ultimately lead to more satisfied employees that would result in enhanced productivity of the organization. PIA will show up with a positive change RECOMMENDATIONS PAKISTAN INTERNATIONAL AIRLINES • DECENTRALIZATION PIA should decentralize its structure that would lead to the easy management.
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 his/her fullest teams. due to The employees will work with more with commitment and dedication and every employee would work to increased motivation. However, empowerment comes accountability, so it is suggested that while they empower their employees, there should also be a “controlled check’’ on them to ensure the correct usage of power delegated to every employees within their circumscribed limits.
PIA should also reduce its overhead costs that is it should manage its resources: labour more effectively, so that with less input, more output 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
PAKISTAN INTERNATIONAL AIRLINE
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.
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.
STRATEGIC BUSINESS UNIT
PAKISTAN INTERNATIONAL AIRLINE
PIA should make its different departments into Strategic Business Unit. Every SBU should have a defined business strategy and a manager with sales and profit responsibility. As PIA is a large organization, so it must be convert into SBUs. Different factors should be determined for the success of SBUs which as follows: The degree of autonomy given to each SBU manager The degree to which an SBU shares functional programs and facilities with other SBU's The manner in which the corporation evaluates and rewards the performance of its SBU managers
PAKISTAN INTERNATIONAL AIRLINE
QUESTIONNAIRE ANALYSIS PAKISTAN INTERNATIONAL AIRLINE Page 91 .
Pakistan International Airline Questionnaire PLEASE SHARE YOUR EXPERIENCE. Which airline you always/usually select to travel (domestic)? Pakistan International Airline “PIA” Aero Asia Shaheen Air International Or Any Other ___________________________. 3. How often do you take airline travel? Less than 1 month 1 month to 2 month Or __________________________. Is there any particular reason why you usually choose that Airline? Service Price Other. please specify below 4. VIEWS AND COMMENTS WITH US 1. How did the selected airline price compare to your expectations? 1 (Excellent) 6 (Very Poor) 2 (Very Good) 3 (Good) 4 (Fair) 5 (Poor) How did the selected airline Value for Price Paid compare to your expectations? 1 2 3 4 6 5 PAKISTAN INTERNATIONAL AIRLINE Page 92 . 2 month to 3 month 3 month to 4 month 2.
What are good aspects of selected airline that attract you? 7. so please specify it below. 9. What are some aspects of selected airline that can be improved? 8. Do you think that all the above qualities exist in PIA. the airline shows sincere interest in solving it? Yes No Never had experience like this.5. PAKISTAN INTERNATIONAL AIRLINE Page 93 . How do you consider the price of PIA? Very Expensive Very low Expensive Average Low 10. How would you rate the overall value of the selected airline? 1 2 3 4 6 5 6. did you agree? If no. When I have a problem with travel arrangements.
3 for Good. 4 for Fair. How will you compare PIA with different airlines in the following services? (Please fill the table according to 1 for Excellent. What are some important strategies that you would like to recommend? COMMENTS Thank You So Much for Filling Questionnaire Name: __________________________ Age: ___________ Sex: Male Female Occupation: __________________________ Qualification: _________________ PAKISTAN INTERNATIONAL AIRLINE Page 94 . 2 for Very Good.) Attributes PIA Aero Asia Shaheen Air Destinations Punctuality Quality of Food Hospitality/Customer Service Economical Technological Advancements Services Corporate Image Safety of luggage 12. 5 for Poor and 6 for Very Poor.11.
10% Selection of Airline According to research. 60% shahee n Airline. and 10% people selected the service of airline taking into consideration on many grounds which are related to their desired destination. 50% people selected the service of airline taking into consideration the price. 30% people utilize the services of Aero Asia and only 10% people utilize the services of shaheen International Airline. 30% PIA. Reason for Selection of Airline According to research. 50% others. ReasonFor S election Of Airline Price. 30% people selected the service of airline taking into consideration the service. 60% people utilize the services of PIA. Attributes Destinations Punctuality Quality of Food PIA 6 5 5 Aero Asia 5 6 6 Shaheen Air 4 4 5 PAKISTAN INTERNATIONAL AIRLINE Page 95 ..RESEARCH ANALYSIS After conducting research from different MBA students of our University. the following results have found which follows as bellow: S election Of Airline Aero Asia. 20% Service 30% Comparison of PIA with Different Airlines After conducting the research students have rated the different airlines in the following manner.
Attributes Hospitality/Customer Service Economical Technological Advancements Services Corporate Image PIA 6 5 5 5 6 Aero Asia 5 5 5 5 3 Shaheen Air 5 5 5 4 4 Total Points 43 40 36 PAKISTAN INTERNATIONAL AIRLINE Page 96 .
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.