In The Name Of Allah The Most Beneficent and The Most Merciful.

I dedicate this report to my beloved parents who supported me and pray for me and also to my teachers whose guidance helps me in every field of life.

This internship report has been made to fulfill the requirement of PIA Internship Program 2009 for award of internship certificate. The report has been under the supervision of supervisor Mr. Atif Faheem Butt, Senior Accounts Officer. Finance department of PIA Lahore station. I would like to extend my gratitude to our supervisor, Mr. Atif Faheem Butt for his advices, appreciations, and valuable suggestions in my report work, which made it possible to complete my internship Report. I would like to thank PIAs HR Manager Mr. Salim-Ul-Allah, Finance Manager Mr. Chaudary Shabbir, all Account officers & employees working in different section of Finance department at PIA Town Office Lahore, for their kind support and guidance throughout the internship program to help me explore the practical avenues of the theoretical concepts learnt earlier. I would like to thank the following Accounts officer for providing me information to prepare this report: Mr. Shaheen Pervaiz Mr. Qari Abdul Razzaq Mr.Javed Bhatti Mr. Taimoor Mr. Sohrab Mehmood

Pakistan International Airline is a very large organization having its operations not only within the country but also abroad. PIA is a service providing organization, its main business is of transportation of Passengers and Cargo in its network all over the world. My internship Report starts with PIAs introduction and also its brief history. I have also included detail of Managements organization. Various departments of Finance Section of PIA are also discussed in detail in the report e.g. Revenue, Disbursement, refund, Payroll, Finance automation cell & Credit Control etc.

Chapter no 1-

CONTENTS
INTRODUCTION 1.1-Nature of the Organization. 1.2-Network of PIA 1.2.1-Domestic network 1.2.2- International network 1.3- International destination 1.4- Revenue composition 1.5- Vision 1.6- Mission 1.7- Values 1.8 - Achievements PIA history 2.1.1 Birth of a Nation, Birth of an Airline 2.1.2 Orient Airways Talks to the skies 2.1.3 A new national Flag carrier for Pakistan 2.1.4 PIAs First international Service 2.1.5 New Plans, New Directions, New management 2.1.6 Historic First and Unbroken Records 2.1.7 Style, glamour, and Charisma 2.1.8 The pursuit of Excellence through technology 2.2 Current FLEET of PIA 3.1 Organizational Structure 3.2 Station Organogram at Lahore 3.3 Executive Management 3.4 Human resource 4.1 Departments of PIAC 4.1.1- Human Resource & Administration department 4.1.2- Finance department 4.1.3- Marketing department 4.1.4- Flight operation Department 4.1.5- Airport Service Department Finance Department at Lahore Station 5.1 Organizational chart of PIA Finance Lahore 5.2 Major Functions of Finance department 5.3 Section of Finance Department 5.3.1 Disbursement section 5.3.2 Revenue Section 5.3.3 Agency Section 5.3.4 Refund Section 5.3.5 Payroll Section 5.3.6 Automation cell 5.3.7 Credit control section 5.3.8 Bank reconciliation section 5.4 Reports 5.5 Accounting System of PIA My experience in PIA 6.1 Activities in Disbursement 6.2 Activities in Refund section 6.3 Activities in Payroll section 6.4 Activities in Revenue section 6.5 Activities in Agency 7.1-Project Finance Conclusion Recommendations Annexure

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CHAPTER # 1 Introduction

1.1- Nature of the Organization

PIA is a service providing organization main business of which is transportation of passengers and cargo in its network all over the world. Apart from its main business, it also provides engineering and aircraft handling services to other airlines by its well established and well equipped engineering department. It has a Wide Body Maintenance Hanger at Karachi airport in which wide body aircraft like Boeing and Airbus can be completely overhauled and not only of PIA but also of other airlines. It also has a precision engineering complex established in 1978.This complex makes various components of the aircrafts, which the aircraft manufacturing companies like Boeing and Airbus order. This organization also provides training of international standards inn various trades relating to the aviation business. This includes grooming courses of Air hostesses, air traffic control, communication, airline ticketing. Pakistan International Airlines is the flag carrier airline of Pakistan, based in Karachi. 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. Its main bases are Jinnah International Airport, Karachi, the Allama Iqbal International Airport, Lahore and the Islamabad International Airport, Islamabad/Rawalpindi. The airline also has secondary bases, including Peshawar International Airport, Faisalabad International Airport, Quetta International Airport and Multan International Airport, from which it connects the metropolitan cities with the main bases, the Middle East and the Far East. The airline is owned by the Government of Pakistan (87%) and other shareholders (13%).

1.2- Network of PIA

1.2.1- Domestic Network

1.2.2- International Network

1.3- PIA International Destination

Countries Azerbaijan Bahrain Bangladesh Canada China Denmark Egypt France Germany Greece India Indonesia Iran Italy Japan Jordan Kazakhstan Kenya Kuwait Malaysia Maldives Myanmar Nepal Netherlands Oman Philippines Qatar Saudi Arabia Singapore Sri Lanka Syria Switzerland Thailand Turkey U.A.E.

Cities Baku Bahrain Dhaka Toronto Beijing Copenhagen Cairo Paris Frankfurt Athens Delhi Mumbai Jakarta Tehran Rome Tokyo Amman Almaty Nairobi Kuwait Kuala Lumpur Male Yangoon Kathmandu Amsterdam Muscat Manila Doha Jeddah Dhahran Riyadh Singapore Colombo Damascus Zurich Bangkok Istanbul Abu Dhabi Al-Ain Dubai Sharjah

IATA Codes BAK BAH DAC YYZ PEK CPH CAI PAR FRA ATH DEL BOM JKT THR ROM TYO AMM ALA NBO KWI KUL MLE RGN KTM AMS MCT MNL DOH JED DHA RUH SIN CMB DAM ZRH BKK IST AUH AAN DXB SHJ

Served Cities 1994 1967 1976 1988 1973 1974 1956 1966 1962 1972 1955 1957 1993 1958 1957 1969 1977 1993 1967 1966 1972 1987 1996 1983 1971 1971 1989 1967 1966 1965 1984 1972 1965 1958 1992 1967 1966 1971 1994 1967 1982

United Kingdom United State of America Uzbekistan

London Manchester New York Washington Tashkent

LON MAN NYC WAS TAS

1955 1989 1961 1996 1992

1.4- Revenue Composition

1.5. Vision
PIA's vision is to be a world class airline exceeding customer expectations through dedicated employees, committed to excellence.

1.6. Mission

Employee teams will contribute towards making PIA a Offering quality customer services and innovative Participating in global alliances. Using state-of-the-art technologies. Ensuring cost-effective measures in procurement and

global airline of choice. products. operations.

1.7. Values

Customer Expectations
Convenience, Caring, and Competitive Tariff

Service
Personalized and Courteous

Innovation
Cherishing New Ideas, Translated Into Action

Cohesiveness
Respect for Individuals, Teamwork, and Effective Communication

Integrity
Business Ethics, Accountability, and Transparency

Reliability
Loyalty and Consistency

Safety
Passengers, Employees, Environment, and Health

1.8- Achievements of PIA

First airline from an Asian country to fly the Super Constellation. First Asian airline to operate a jet aircraft. First Asian airline to be granted maintenance approval by the US Federal Aviation Administration (FAA) and the Air Registration Board, predecessor of the British Civil Aviation Authority (CAA). First non-communist airline to fly to the People's Republic of China, and operate a service between Asia and Europe via Moscow. First airline in Asia to induct the new technology Boeing 737-300 aircraft. The first airline in South Asia to introduce auto-ticketing facility. The first airline in the world to fly to Tashkent, capital of the newly independent state of Uzbekistan. First airline in the world to start Air Safari with jet aircraft. First Asian airline to start flights to Oslo, the capital city of Norway. First airline in the world to induct the Boeing 777-200LR, the world's longest range commercial airliner. Pakistan International Airlines Flight Services Department was awarded the ISO 9001:2000 certification award during May 2006. First airline in Pakistan to operate a flight with an all female crew at command and in the cabin. First airline in the world to operate the Boeing 777-200ER, 777200LR and 777-300ER altogether - all the three variants available on the market.

Chapter #2 PIA History

Birth of a Nation, Birth of an Airline

Air transport has probably never been more important to the development of a new nation than in the case of Pakistan. In June 1946, when Pakistan was still in the offing, Mr. Mohammad Ali Jinnah, the Founder of the upcoming nation, instructed Mr. M.A. Ispahani, a leading industrialist, to set up a national airline, on a priority basis. With his singular vision and foresight, Mr. Jinnah realized that with the formation of the two wings of Pakistan, separated by 1100 miles, a swift and efficient mode of transport was imperative.

Orient Airways Takes to the Skies

On 23rd October 1946, a new airline was born. Initially registered as a pilot project in Calcutta, Orient Airways Ltd. had at its helm Mr. M.A. Ispahani as Chairman and Air Vice Marshal O.K. Carter as General Manager. The new carrier's base remained in Calcutta and an operating license was obtained in May 1947.Four Douglas DC-3s were purchased from Tempo of Texas in February 1947 and operations commenced on 4th June 1947.

The designated route for Orient Airways was Calcutta-Akyab-Rangoon, which also happened to be the first post-war international sector to be flown by an airline registered in India. Within two months of Orient Airways' operational beginnings, Pakistan was born. The birth of a new nation generated one of the largest transfers of population in the history of mankind.

Orient Airways, along with the help of BOAC aircraft which had been chartered by the Government of Pakistan, started relief operations and

transportation of people between Delhi and Karachi, the two capitals. Subsequently, Orient Airways transferred its base to Pakistan and established a vital link between Karachi and Dacca, the two capitals of the two wings of Pakistan. With a skeleton fleet of just two DC-3s, three crew members, and twelve mechanics, Orient Airways launched its scheduled operations. The initial routes were Karachi-Lahore-Peshawar, Karachi-Quetta-Lahore and Karachi-Delhi Calcutta-Dacca. By the end of 1949, Orient Airways had acquired 10 DC-3s and 3 Convair 240s which were operated on these routes. In 1950, 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, with limited capital and resources. It could not be expected to grow and expand independently. It was then that the Government of Pakistan decided to form a state-owned airline and invited Orient Airways to merge with it. The outcome of the merger was the birth of a new airline, named Pakistan International Airlines (PIA) on 11 March, 1955.

In addition to transport activities, Orient Airways had established the nucleus of overhaul and maintenance facilities and acquired trained pilots, engineers and technicians, these measures proved to be a great asset for PIA during its teething phase.

PIAs First International Service

The year 1955 also marked the inauguration of the fledgling airline's first scheduled international service - to the glittering, glitzy capital city of London, via Cairo and Rome. Initially, there was much criticism, as the public could not comprehend or justify the need to operate an international route when, in their opinion, other projects vital for a developing country should have been given a higher priority. However, PIA's focus was, and continues to be, to serve the Pakistani community at large. The provision of transportation to expatriates has remained one of the foremost priorities of the national

airline. Moreover, PIA earned substantial foreign exchange through international services, which it invested in the purchase of aircraft and spare parts, as fleet expansion was a grave necessity for the airline

2.1.5- New Planes, New Directions, New Management

In 1956, orders were placed for two Super Constellations and five Viscounts which were to be delivered in 1959. At this juncture, PIA possessed a small fleet which comprised of Convairs, Viscounts, Super Constellations and DC-3s.

While Mr. M.A. Ispahani was the first Chairman of the new dynamic airline; it was the first Managing Director of PIA, Mr. Zafar-ul-Ahsan, who in his 4 year tenure, got the ball truly rolling and set the shape of things to come. The PIA Head Office building at Karachi Airport, which houses all the major departments of the airline, was the brainchild of Mr. Zafar-ul- Ahsan. In fact, on his departure from the airline, the employees presented him with a silver replica of the building with the caption, "The House You Built".

In 1959, the Government of Pakistan appointed Air Commodore Nur Khan as the Managing Director of PIA. With his visionary leadership, PIA 'took off' and within a short span of 6 years, gained the stature and status of one of the world's frontline carriers. In aviation circles, this period has often been referred to as the "golden years of PIA". Development, expansion, and growth were keywords that the new management was committed to. In March 1960, PIA launched its first Boeing 707 jet service on the London-Karachi-Dacca, route which later proved to be very successful. This trail-blazing accomplishment resulted in PIA becoming the first Asian Airline to operate a jet aircraft, setting trends for the future. In 1961, the airline took on the mammoth task of initiating a cross-Atlantic service from Karachi to New York. By this time, PIA had placed orders for more new aircraft, which included Fokker F-27s, Boeing 720Bs and Sikorsky helicopters. Helicopter services in East Pakistan had gained momentum by 1962 and expanded to include Sylhet, Chittagong, Dacca, Comilla and Ishurdi. PIA's helicopter services carried over 70,000 passengers during the first year of operation. At the time, it was regarded as a stellar operation, equal to any other in the world. Unfortunately, due to two mishaps, the service was discontinued in 1966.

Historic Firsts and Unbroken Records

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

Style, Glamour, and Charisma

Around this time, the airline saw a change in the top slot. Air Vice Marshal, Asghar Khan took over the reigns of PIA for a tenure of 3 years. A number of highpoints are attributed to this period. The most colorful, if not the most significant, occurrence for PIA was the introduction of a new air-hostesses' uniform designed by none other than the renowned

French designer, Pierre Cardin. Taking the aviation world by storm, this move, more than any other single factor, imprinted PIA's name on the international market. The uniforms were an instant hit, both at home and abroad.

2.1.8- The Pursuit of Excellence through Technology and Quality Control

Not content with a number of historic firsts under its belt, PIA made history yet again, by installing Pakistan's first computer, an IBM1401, in 1967. PIA's first Engine Overhaul Shop, located near the Head Office building, was also completed and commissioned around this time. The Ground Training School (GTS) now known as the PIA Training Centre, was first conceived and developed during 1961-62. Interestingly, training was initially imparted in the T-shaped building which has now become the PIA Dispensary, close to the Head Office building. Besides visible development and growth in traffic and revenues in the sixties, PIA added additional destinations, new equipment, and cutting-edge technology to support its ever expanding operations. A new Jet Hangar for Boeings with a supporting airframe overhaul shop was completed and commissioned in 1968.

In 1970, PIA set up its own Flight Kitchen in Karachi, which caters, even today, to the national airline as well as other carriers. Over the years, with the airline's expansion and increased capacity, the need for a second Flight Kitchen became imperative.

2.2- Current Fleet of Pakistan International Airline

PIA's fleet of modern aircraft is spacious, comfortable, and designed to get you to your destination safely. PIA operates a range of advanced aircraft, ranging from the world's preferred Boeing 777 airplane to the super-quiet Airbus A-310. A brief introduction of PIA fleet is given below:

BOEING 777
The Boeing 777 family comprises of long-range, wide-body twin-engine airplanes. PIA was the first airline in the world to operate all the three variants of the 777 family: 777-

200LR, 777-200ER and 777-300ER, all of them are well loved by PIA's seasoned travelers for their spaciousness and comfort. PIA also holds the privilege of being the launch customer for 777-200LR, one of PIAs aircraft holds the record for the longest commercial jet flight in aviation history. At present PIA is serving destinations in USA, Canada, UK and Europe through its 777 fleet.

Boeing 747
The Boeing 747, often referred to as Jumbo Jet, is amongst the world's most iconic and recognizable jet airplanes. This 4 engine long haul wide-body airplane has a two-deck configuration. PIA operates two variants of 747 family which includes 747-300 and 747200 Combi. 747 Combi is so called as it has mixed pax and cargo configuration on the main deck. At present due to its capacity, 747-300 fleet is mostly deployed to cater high density requirements like carrying intending pilgrims to and from Saudi Arabia.

Airbus A310
The Airbus A310 is a medium to long range wide-body airplane providing a spacious interior to its travelers. PIA has deployed the A310-300 fleet on Far East, Regional as well as Domestic routes.

Boeing 737
The Boeing 737 is one of the world's favorite narrow-body short/medium haul jet airplane. Amongst its many credits, it has the distinction of being the most ordered and produced commercial airplane of all time and Boeing continues to manufacture its variants, to date. PIAs 737-300 aircraft mostly serve its domestic and regional routes.

ATR42
This modern technology turbo prop is the latest type inducted in PIAs fleet. PIAs fleet of seven ATR42-500 aircraft is configured in comfortable two class seating arrangement. This aircraft has enabled the airline to provide its valued customers the most convenient way to fly to far flung destinations of the country.

Chapter #3
3.1- Organizational Structure

CHAIRMAN (PIA) SP Asst to Chairman Secretary (PIA)

Director Precision Engineering

Manager Director

Director Coordination to MD

Director Engineering

Deputy Managing Director

Director monitoring & appraisals

Director HR & Administration

Director flight operations

Director Finance

Director IT

Director procurement logistics

Director Flight Safety

Director Sales

Director Quality Assurance

3.2- Station Organogram at Lahore

DISTRIC MANAGER Station Manager IX Dy. General Manager HR (Punjab) IX

Dy. General Manager Res&Tkt (Punjab)

Mgr. Inad.Cell / Task Force VIII Mgr. Group Tours / Charter VIII Finance Manager VIII Station Manager Communication VIII Branch Manager Speedex VII Flight Surgeon ACMC Dy. General Manager Works IX ASSTT. Manager PR VII Asstt. Manager Field Services VII Incarge Planetarium VI Coordination Manger VIII Pax Sales Manager Corporate

Manager Flight Services VIII Dy. Chief Medical Officer Dy. General Manager Cargo IX Incharge MIS VII Cargo Terminal Manager VIII Pax Sales Manager VIII Dy. General Manager RSD Dy. General Manager Security IX Dy. General Manager AIMS IX Manager P&L VIII Pax Sales Manager(Corporate) VIII

3.3- Executive Management

Managing Director
Capt. Muhammad Aijaz Haroon

Director finance & CFO

Mr. Faisal I.H. Malik

Director - Corporate Planning

Mr. Shahnawaz Rehman

Director - Engineering and Maintenance

Mr. Maqsood Ahmed

Director - Flight Operations

Capt. Shuja Naqvi

Director - Human Resource & Administration

Mr. Hanif Pathan

Director - Marketing
Mr. Imran Ahmed Khan

Director - Precision Engineering Complex

AVM Muhammad Kamal Alam Siddiqui

Director - Procurement, Logistics and Food Services

Mr. Javed Kamran

Director - Training and Development

Mr. Dilawar Farid Baig

Director
Mr. S. Kamran Hasan

General Manager Corporate Safety & QA

Capt. Salman Azhar

Chief engineer
Mr. Aslam Tariq

General Manger Passenger Handling Services

Mr. syed aijaz mazhar

General Manager Public Affairs

Mr. s. sultan hasan

3.4- Human Resource

DEPARTMENT SECTT HRA&C FINANCE CORPORATE PLANNING IT MARKETING FLIGHT OPERATIONS ENGINEERING PL&F PEC TRG & DEV TOTAL

NO. OF EMPLOYEES 3479 1648 755 15 326 2126 3040 4237 1362 668 137 17793

CHAPTER # 4 4.1- DEPARTMENTS OF PIA Human resource & Administration Finance Marketing Flight Operations Airport Services Cargo Sales & Services Flight Services
4.1.1- Human Resource & Administration
Human resource & Administration department is one of the pivotal departments, which is responsible for the administration of human resources and formulation of the corporate personnel policies; it has coordinating and regulatory body, which regulates relationship between management and employees. Further subdivision is as under:

Human Resource Division Personnel Division PIA Training Center Policies and Remuneration Division Security Services Division Medical Services Division

 Industrial Relations Division Legal Services Division Sports Division

4.1.2- Finance
Finance department is one of the biggest departments in the airline, which is responsible for provision of efficient and effective accounting/budget. The feasibility of extending financial, administrative, technical facilities is control by this department. It is also responsible for internal auditor of PIAC. It has further divisions, which are as under:

Planning and Budget Funds Management Accounting Internal Audit

4.1.3- Marketing
It looks after development of Marketing Plans & Policies. This department performs all marketing functions. Subdivision is given below: North (KHE) Division South (KHI) Division UK (LON) Division USA & Canada (NYC) Europe (FRA) Division

 Saudi Arabia (JED) Division Asia Pacific (SIN) Cargo Sales Division Market Planning & Services Division Gulf (DXB) Division Passenger Sales Division Reservation & Yield Management Division

4.1.4- Flight Operations

This department coordinates the training, flight engineering, planning and scheduling of flight operations. It is responsible for all the activities of the flight operation in PIA and ensured central control over all flights. The department has been organized on the following line:

Flight Engineering Division Standards Division Central Control Division Planning & Scheduling Division Technical Division Coordination Division Training Division North Division
4.1.5Airport Services

Customer Services Department has two subdivisions, which are given below

Passenger Services Division Flight Services Division

CHAPTER#5Finance Department at Lahore Station

5.1

Organization Chart of PIA Finance Lahore

FINANCE MANAGER LAHORE

Assistant Manager Payments

Assistant Manager Receipt

A.O. Disbursement

A.O. Revenue

A.O. Refund

A.O. Agency Sales

A.O. Payroll

A.O. Document Control

A.O. Bank Reconciliation

A.O. Automation

A.O=

Accounts Officer

Accounts Officer Revenue controls all PIA sales counters cash at Lahore.

5.2 Major Functions of Finance department

The major function of the finance department is monitoring, controlling, maintaining financial discipline and reporting of all the financial events of all departments. All departments in the organization give their reports to finance department and it makes and presents final reports by recording each and every transaction for further analysis and decision-making. There are several sections in the finance department that deals with various reports. Also, various manual records are maintained by all section in which various kind of information is recorded.

Budget Control Function

To control the expenses and setting targets budgeting is very important. In accounting system of PIA annual budget is allocated to all the heads of expense accounts. For this purpose proposals from each department are sought and after discussion and management approvals budgets are allocated and entered in the data base of the accounting system at each station and head office. At the time of preparing a payment voucher when account

number is entered, the system automatically displays the current position of the budget and when the voucher is completed the balance is automatically adjusted. At the end of each month budget register is printed which shows budget balance and the payments in the each head of account.

Receipts and Payments

Like any other organizations finance department PIA finance department also performs the functions of disbursement and collection funds.

5.3- Sections of Finance Department

Finance Department of PIA has following sections: Disbursement section Revenue section Agency Section Refund Section Payroll section Automation cell Credit Control section Bank reconciliation section

5.3.1- Disbursement section

Disbursement is all about the act of spending or disbursing money. In other words we say that amounts paid for goods and services that may be currently tax deductible. As PIA has computerized payment system the Disbursement department is responsible for the printing of all outside vendors cheques, direct deposit statements and tax forms. Disbursement section is also responsible for processing stop payments, void cheques, sales tax and other expenses. When any expense is occurred the vendor raises a bill against it and after approval by the competent authorities disbursement section receives

this bill. Then bills are thoroughly checked by the department. If the bills are found correct in all respect then computerized payment vouchers are prepared. After printing of these payment vouchers two signatories must sign the cheques which is attached with the computerized pay vouchers. Disbursement department is responsible to disburse all the expenses incurred by the PIA in Lahore. The main functions are:

Maintenance and controlling of budget of all departments. Calculation of Sales tax Calculation of Income tax Calculation of Withholding tax

Requisition of Consumable Items

When a department acquires an item, details and amount of that item is mentioned in INTERNAL REQUISATION FORM and disbursement department has to check whether that department has budget for that item or not, after approval of disbursement department INTERNAL REQUISATION is send for further processing.

Employees Expenses

This department makes payment of medical bills, slip allowance and hotel accommodation bills.

Office Expenses

All the expenses incurred in office e.g.

 Computer stationary expenses Stationary expenses Furniture expenses Transport expenses Cafeteria expenses Office entertainment expenses

Passenger Expenses
Passenger expenses include:

Store expenses Catering expenses

Craft Expenses

These expenses relates with craft and other cargo.

Craft compliant box. Wastage expenses. Expenses of the staff in the cabin Saps instruments

 Newspapers, blankets expenses Dry clean expenses First aid expenses

Process of Payment
Before payment budget of department is checked and person or party to whom payment is to be made its status regarding income tax is confirmed whether person or party is eligible for relaxation on the income tax or not. Person or party has to provide NTN to Disbursement department.

Budget Estimates
Disbursement Department has to sent estimate budget Performa to every department, it contains following necessary heads:

Salary and Allowances Indirect fixed cost budget Details/ backup of budget estimates Account Nominal Currency (foreign stations)
Departments send estimated budget and proposed budget statements for the next year to disbursement department for further operations.

5.3.2- Revenue section

As PIAs main business is to provide travel facility so its main source of income is selling of Air tickets. PIA has a very modern & fast working system of ticketing. All the reservation 7 ticket system is computerized. The revenue section controls all the sales at PIA counters. The entire cash sale is deposited in the Bank on daily basis. There are different types of sales.

Cash sales Credit card sales Sales to defense Personal against travel vouchers Incentive tickets to different client & agents Staff rebated tickets

Cash Sales

Cash sales are banked on daily basis and bank slips along with sale reports of the same day are sent to the section where the staff working made an initial audit of the report and then deposited into the bank. That amount is entered in the Direct Passenger Sale Report i.e. called R-1. this report is generated on monthly basis.

Credit Card Sales

All the credit card sales are sent to Revenue section on daily basis and there they are sorted and list is made for billing to the concerned bank. When cheque of credit sale is received it is deposited into the bank & bank credit it to PIA account.

Sales to Defense Personals

As per Govt. of Pakistan rules Army personals has to pay 50 % fare , remaining 50 % will be recovered from the army through a lengthy billing process. All the daily sales to army personals are received in revenue section & handed over to another section dealing all the credit sales named Credit Control section.

Incentive Tickets to Different Clients

When an agent makes satisfactory sales he can claim for a rebated air ticket. VIPs passengers, regular travelers or from commercial point of view PIA management feels that they are valuable such persona are awarded with incentive tickets. Such tickets are accounted for by the H.O. Staff Rebated Tickets Like all other organization PIA employees are awarded with Free/ rebated air tickets. All the mentioned above Sales are received in the revenue section along with their support there they are sorted out and accounted for all their merits after all work is done and all the supporting documents are found correct and properly attached. These reports are sent to H.O for another audit by the staff working in H.O. all the sales Accounts are reconciled on daily basis.

5.3.3- Agency Section

Most of the PIA sale is done through agents. PIA has different agreements with various agents for different durations. This agency section deals with agent sales. Here sales are of two types: 1. 2. Pax Sales Cargo sales

1. Pax Sales
Pax sales mean passenger sales which includes two types of agents. a) IATA Approved Agents (International Air Transport Association) b) PSA (Passenger Sales Agent) There are four types of agents selling tickets of PIA.

PAX IATA approved agents

Such agents are registered agents. They sell tickets of many airlines but they have to sell 67% of the national airline. They deal both on domestic and international tickets. . They are allowed to submit cheques on fortnightly basis.

PSA (Passengers sales agents)

They sell both international and domestic tickets. They only sell the tickets of PIA. For security purpose they submit the bank guarantee of 1.5 mn and 1. mn cash guarantee.

Comparison of IATA & PSA Agents

NON BSP MULTIPLE/ DIFFERENT AIRLINE MULTIPLE/DIFFERENT AIRLINE PREPARED BY AGENT BSP STANDARD/NEUTRAL/NO AUDIT COUPON SINGLE/BSP MANAGER GENERATED BY

TICKET STOCK TICKET SOURCE SALES REPORT

FOR INDIVIDUAL AIRLINE DIRECTLY TO EACH AIRLINE DIFFERENT RAISE MANUAL REFUND MULTIPLE CHEQUES TO EACH AIRLINE

PROCESSING CENTRE COLLECTED BY LDPC AND SEND TO AIRLINE STANDARD ELECTRONIC REFUND THRO BSP LINK SINGLE CHEQUE COLLECT BY CLEARING BANK

DOC. SUBMISSION REPORT FORMAT REFUND PROCESS

REMITTANCE

5.3.3.1- Routine processes in Agency Section are following

Issuance of Revenue Documents. Collection of Agents Daily Sales Reports. Recording of Cheques received from Agents. Recording of Agent Sales Summary in COSSAP. Estimation of Capping for IATA Agents. Receipt of Weekly BSP Documents. Checking of Weekly BSP Documents. Agent Sales against Credit Card. Recovery Realization of Debit Memos from Agents. Credit Memos in case of Advances received. Controlling of Revenue Documents. Maintenance of Records.

Processes are described in detail:

Issuance of Revenue Documents
This process involves issuing of stock by Agency Unit to IATA & Non-IATA agents. Agents send request for issuance of documents. Agency Unit verifies the stock level and stock value and after getting approval issues tickets to agents.

Collection of Agents Daily Sales Reports

In this process, agents submit their daily sale reports and DQB. Agency Unit-Accounts Officer checks tickets and piles of weekly sales are sent to Head Office-Karachi.

Recording of Cheques from Agents

In this process, Cheques & Pay-Orders are collected from agents. Remittance amount is deposited into the bank and details of bank deposit slips are fed into the COSSAP System.

Estimation of Capping for IATA Agents

This process in which capping is done depends upon the document level & document value of agent. If the agent value exceeds its Bank Guarantee then he needs a Pay-Order for top-up. And after informing to PSM top-up is allowed.

Receipt of Weekly BSP Documents

This process involves receiving the BSP documents from agents. Weekly sales report is downloaded and printed on weekly basis from BSPlink. Documents are checked and in case of errors agents are informed and corrections are made accordingly.

Checking of Weekly BSP Documents

Agency Unit checks BSP documents along with sales reports in this process. And sales summary is fed into COSSAP System.

Agent Sales against Credit Card

In this process, sales are made through agents against credit card. Payments are made by bank through cheque from which cash receipt is prepared and it is fed in COSSAP System.

Recovery Realization of Debit Memos from Agents

In this process, ADMs are raised and agents submit cheque for the settlement of their discrepancies. Also ADMs and cash receipt information is recorded in COSSAP System.

Controlling of Revenue Documents

In this process, revenue documents are controlled and consumed through COSSAP System by Accounts Officer of Agency Unit.

Maintenance of Records
In this process, Agency Unit maintains all types of records against sales reports, ADMs, ACMs, CRs, Bank Deposit Slips and also Dishonored Cheques.

2. Cargo Sales
Cargo means, transfer of baggage without passenger, under airway bill (AWB). This department is doing a lot for the organization. This is also a part of marketing department, which also constitute ticketing and cargo department. It deals with domestic

as well as international cargo. PIA transfers cargo only to the city where operating airport is situated. PIA does not deal in motor transport transfer of baggage. Cargo rules are also like other IATA airlines. PIA is uplifting around 30,000 tons cargo per year including dry and perishables ex-Pakistan. PIA has specialized in uplift of special cargo like Relief goods, live animals (sheep, cows, camels, horses) shipments for cargo aircraft only etc.

Airway Bill (AWB)

This is a non-negotiable document consisting of 9 to 14 parts. The conditions of contract are shown in the AWB. It must be used for each domestic and international cargo and interlink with two or more airlines. It must be issued at the time when shipper brings the consignment. When AWB is completed the original is kept as a record in the issuing office and a copy of it is issued.

Payment
All the charges of airfreight shipment are payable by shipper or by the consignee. The charges can be prepaid or the payment can be made when the cargo is delivered.

Documentation
Documentation is necessary for each and every type of cargo. Without it the process of delivering it cannot be carried out.

Special Cargo
Special cargo describes those commodities which due to their nature or value require special attention. These may be perishable items, flammable items etc.

For the acceptance of these, one should confirm that whether facilities for such cargo are available or not. List of special cargo is listed below:

Live animals Perishables Oversized cargo Valuables Company cargo Handling

Information regarding carriage of dead body should be disclosed to passenger traveling on the same flight. Documents of death certificate, packing certificate and other documents required by government. Loading and storage is the important function. Storage must be made on required temperature. Unloading shall be made after all passengers leave the RAMP. And it should be immediately transferred to warehouse. Arrangements for the delivery should be made quickly.

Oversized Cargo
If the cargo is oversized then it will not be acceptable. The measurement of size is made on the height and width of aircraft door. If such aircraft is operating on specific sector whose size of the door is small than the cargo is not acceptable. The weights of goods are calculated by the following formula: (Length x width x height)/366 = weight

Dangerous Goods

This category includes that type of goods which may be harmful for the human beings, such as: Explosives Gases: Compressed, liquefied, deeply refrigerated Flammable liquids Flammable solids Radioactive material Miscellaneous Goods Important thing for the acceptance is its proper packing, documentation. The license for these dangerous goods is necessary. According to IATA rules, care must be taken while packing these items. Dangerous Goods Regulation (DGR) applies on these items.

5.3.4- Refund Section

In case of international or domestic tickets the unused tickets can be refunded from PIA. Jacket covering the coupons of the ticket bears instructions and procedure of cancellation charges with specific rates. As PIA business is sales of ticket, all unutilized tickets are returned to PIA & refund is claimed. To deal with such ticket a refund section is working in PIA Finance section. The unused ticket is presented in refund section. After proper security of the ticket a pay voucher is prepared along with the cheque. This pay voucher and cheque duly approved and signed by the authorized officer. All the payment process is computerized and whole accounting is automatically done by the computer. User has to only enter the specified A/C code allocated by PIA for each type of payment. As payments are of different type and nature, so many accounting codes are used for proper accounting.

5.3.5- Payroll Section

Payroll section works for making different type of payments to their employees e.g. salary payment. There are dozen of other payments involved regarding PIA employees which are paid through this section. For this purpose Regional Manager duly approves all payments. For each payment separate pay voucher is prepared. As I mentioned before due to computerized accounting system, cheque is printed with pay voucher. All payments are made through crossed cheques. PIA salary system is also computerized. Salary of all employees is prepared at Head Office Karachi and all sources for payment & adjustment of allowances are prepared at Lahore & dispatched to Karachi for final settlement in payroll. Computerized salary slip is printed at Karachi where PIA main IBM computer is installed. After Printing of these slips these are dispatched to Lahore station. In payroll section there are different types of sources e.g. Source-52 is Salary Change Advice, Source-53 deals with employees short collection i.e. called Loans and Miscellaneous Deductions. Source-54 deals with any change of name or department or any other change i.e. called Statistical Data change Advice, Source-55 is called Amount Adjustment/ Change advice, Source-56 deals with Salary Structure, Promotion, Demotion and Transfer etc and Source-59 deals is called Termination Advice.

5.3.6 Automation Cell

As already discussed whole PIA system is computerized, therefore, to monitor all the accounting transactions & provide the management any information or any report as and when required by the local management or by the H.O. This section efficiently provides all such information or reports. When all the reports in all sections are completed & their respective accounting is completed and balances are compiled& bank reconciliation is done, all the data for the whole month is transferred to head office Karachi through E-mail. Then finance automation cell at head office receives this data from all stations & compile it. In this way each month all data of Lahore is transferred to H.O on every 7th of each month.

5.3.7 Credit Control Section

As its name shows, this section deals with all credit sales by PIA & recovery of such amounts. There are so many parties which are dealing with PIA on credit basis. All sales & services performed by PIA on the credit basis. Credit control deals with all credit sales & recovery of such amount is responsibility of credit section. All MNA/ MPAs are issued traveler voucher by the Govt. for traveling then PIA present these TVs to respective Bank and then these banks recover the amount from State Bank. These vouchers are of different values. In this kind of credit mode there are so many problems in encashment. In case of Military travel if it is an official travel ticket then APW Air Passage Warrant is issued against the ticket. As per Govt. rules all Army personal are allowed 50 % rebate on air travel ticket & remaining 50% will be recovered by PIA through billing. Invoices are raised to controller of military accounts. These certificates are called TAC travel Authority Certificate. TACs billing is done by Head Office and APWs billing is done by credit control section of the station. This section also cover the handling & catering to other airlines on credit basis. This kind of billing is done thorough IATA in dollars by head office Karachi. Handling forms are received in dollar amount and then converted in to PKR. Four copies of handling forms are maintained by this section:

For Billing For Invoice with Cash Receipt For Serial maintenance For Head Office record

This section also deals with deportees, employees short collections, army refund and dishonour cheques.

5.3.8 Bank Reconciliation Section

PIA accounting system is based on monthly closing basis. Therefore 7th of every month is closing date for the previous month closing when all the previously discussed sections complete their monthly closing & balance all their accounts. Then the duty of the Bank reconciliation starts when the bank statement is received and bank balance is reconciled with cashbook. As already discussed the whole PIAs accounting system is computerized and the accounting is matched by computer automatically. PIA banker is HBL WAPDA House Branch in Lahore; bank statement is received on daily basis. PIA is maintaining two bank accounts. All receipt are deposited in the collection account and all payments are made through payment account. After the reconciliation of these two accounts the monthly data of all the reports is sent to head office.

5.4- Reports
PIA has its own coding system there are different types of sales earning Revenue Receipt and Payment. There 11 types of reports maintained by the Finance Department and monthly reports are checked and reconciled on daily basis and finalized and closed at the end of every month.

R-1 Direct Passenger Sales Report on Counter. All cash sales at PIA counters are reported in R-1

R-2

All Cargo Sales are reported in R-2.

 R-3
All receipt against cargo, which are booked by another station on credit basis, or To pay basis means collection made at destination, all such collections are reported in R-3.

R-4
Miscellaneous Transactions Report, all miscellaneous collection or recoveries from staff are reported in R-4 e.g. all airport taxes, all rent received & payment by PIA

R-5
Credit Collection Reports, all receipt/collection recovered against credit sale is reported in R-5. Recovery from MNA/ MPA ticket issued against travel voucher & recovery from Army personals.

R-6
Direct Refund to Passengers through Counters/PIA Office, which is linked with disbursement department (D-15).It means all the payment made against unutilized PIA tickets presented for refund are reported in R-6.

7.

R-7 All Collections made by the station on the behalf of other stations is reported in R-

R-8
Reconciliation of Local Invoices, this shows the party-wise balances of all the credit parties, and shows the recoverable amount balances.

R-9 All sorts of collections/passenger/cargo/others and reported here. R-9 is consolidated statement of all receipts. While studying R-9 at a glance we can judge the source-wise collection detail for a month. It shows the consolidated amounts collected & reported against each source for clearer picture of finance system.

R-10
Passenger Sales reports through Agents, all sales by agents are reported in R-10.

R-11
All Cargo Sales through agents are reported in R-11. Cargo sales are submitted by agents fortnightly basis. Agents are allowed 5% commission on all international cargo sales.

R-12
Stations reports through interlines are reported in R-12

R-13, R-14
R-13 & R-14 are Head Office based reports. In the month end closing of all the data is fed in the computer from different sources and compiled in R-9 and computer passes journal vouchers. Finally reports are printed when all balances are matched and bank statement is reconciled.

Accounting System of PIA

PIA has its computerized Accounting System called COSSAP III, which is the abbreviation of Corporate Standard Station Accounting Package. It has been working very fine for more than 17 years. It was first developed on Apple Computers when there was no hard disk available. The present system has been developed with Oracle with Unix operating system. It is a standard system, which is being used within country and abroad where the PIA offices exist. PIAs accounting system based on three things.

LOC

(Location): Each station has its location code like 140 is for Lahore

DEPT (Department): Each department has a code like F-2 is for Finance, M-4 is
for marketing.

Account: Any account revenue or capital account like 67160 is for Books and
Magazines. When all the data from the whole network is received then consolidated reports are prepared at head office. And with coding, each and every transaction can be sorted out as location, department, or account vise. It can also be sorted out that whether the transaction is of revenue type or capital one

CHAPTER # 6 My Experience in PIA

Internship in PIA was a very good experience for me. During this period I get the chance to work as an employee of PIA. Mr. Atiff Fahim Butt sahib is a good supervisor. He sent me in all sections of Finance department for understanding of work. I worked 6 weeks in Agency unit and one week in other sections of Finance department. My activities are as follows:

6.1

Activities In Disbursemment

Checking and processing monthly payments of maintenance bill Preparation on payment vouchers

 Checking and payment of laundry bills Checking hospital bills of PIA employees

6.2

Activities In Refund Section

Preparation of pay vouchers of domestic/international tickets of direct walking

passenger issued by booking officer after checking of refund claims.

6.3

Activities Payroll Section

Made the payment related to staff Kept the month wise record
6.4 Activities Revenue Section

Checking of counter sales repot Received cheques from banks against credit card sales. Matched with visa card
details and deposits with bank.

6.5

Activities Agency Section.

Collection of Agents Daily Sales Reports. Recording of Cheques received from Agents. Recording of Agent Sales Summary in COSSAP. Checking of Weekly BSP Documents.. Credit Memos in case of Advances received.

 Maintenance of Records. Collection Recording

vouchers of Sales Report from PSA on Fortnightly Basis. Documents were physically checked of Cheques & Pay Order Collections from Agents on cash receipt

Manual record maintenance of credit card sales Recorded sales summary report on R-10 on COSSAP Feeded refund tickets on R-5 on COSSAP CHAPTER# 7 7.1- Project Finance
I have done the following working during my internship in PIA. I studied the sales reports of different agents. And study about the IATA (International Air Transport Association) and PSA (Passenger Sales Agents). IATA agents are placed on BSP (Bank Settlement Plan). I verified the BSP sales via BSP link data files and thoroughly processed them to extract information regarding PK agents sales fortnightly along with industry sales. I did analysis of International and Domestic sales of different agents. I also studied about the over trading of different agents to whom PIA issues excess stock that is more than their bank guarantee. I had come to know that this over trading is a financial risk to PIA. I formulated a schedule for finding the over trading of the agents. First of all, I studied the total number of documents (both domestic and international) issued to particular agents. Then by calculating the average value of their stock, I found the total number of stock that can be issued to the particular agent. By doing so I find the amount of over trading done by the different agents.

 I also done work to find the capping of each agent. First I studied their bank guarantees and on the basis of that I found the average ticket value of different agents. And then calculate the PK share from the total sales of agents. And after doing this I found the capping value of each agent. Capping is the total number of stock that can be issued to agents within their bank guarantees. I also calculate the PK share and also the industry share in the sales of different agents. And then find the total amount of sales than agents made by selling PIAs stock.

CHAPTER# 8 Conclusion
Internship training is very much helpful in assessing the practical wok environment .It teaches the professional skills, help students meet directly with the executives and lean their skills and experiences. Internship in PIAC enhance my skills as well as discovered my weaknesses .working in costing section was so much helpful for me that improves my accountancy and quantitative skills .Internship in PIAC is so much fascinating and satisfactory experience. PIA is a commercial organization overburdened with expensive aircrafts, recently purchased. The Govt. gave a huge amount for this purpose. These new Boeings 777 are very expensive in price and the operational coast is very high which the company is unable to meet from its operation. Other airlines e.g. Shaheen airline, Air Blue, Aero Asia are also introduced in the country and operating successfully on the domestic and international routes putting PIA in a very hard competition. High fuel prices are also eroding its income. The present top management is striving to overcome losses but no solid plan is seen yet. Now the Govt. & management is considering that the PIA must be privatized for its existence. To initiate this Motor transport section has been given to the private sector and some other departments are under consideration but this type of privatization will not be fruitful.

CHAPTER# 9 Suggestions and recommendations:

During eight weeks of internship I observed certain things which need to be improved in my point of view. Some of the problems really need to be solved which will help airline and its employees to improve their performance and become more competitive. PIA should adopt transparent policy for promotion. So that employees get more motivated. Staff should be paid for overtime. PIA should adopt quick process of refund and refund process should be completed at the same place and customer should not wander around in different departments. PIA should give promotion and increment to employees who are competent and do their jobs more competently. Management of PIA should focus on more atomization of processes. Management should hire the services of specialized IT personnel for their System development and up gradation on time.

 Their should be proper software for PSAs like BSP. Their should be days fixed for the agents for their problems and matters to meet the officers because when they come on different timings there is a lose of concentration on part of account officers. There should be equal and fair distribution of work among the employees.

CHAPTER# 10 References
WWW.GOOGLE.COM.PK WWW.IATA.ORG WWW.PIAC.COM.PK