Competing With International Airlines

Pakistan International Airline’s (PIA) decline has been well documented and well debated, but the intense spotlight on the national carrier has taken attention away from other local airlines – which are not faring too well either. According to estimates from Civil Aviation Authority (CAA) officials, Pakistan is losing up to $8 billion every year as foreign airlines are taking more than 50 percent of the passenger load to international destinations which could have been given to local carriers.

While this is a disappointing state of affairs which requires the state’s immediate attention, some of the measures mooted by the same officials seem to be missing the mark. The most prominent suggestion is some sort of protectionist policy towards local airlines. The argument goes; since international airlines like the Emirates and Etihad have the support of state infrastructure in terms of oil subsidies and tax breaks, they might be on a level playing field – and Pakistan must take measures to create such a field. Limiting the operations of foreign airlines, awarding financial and seat quotas to local airlines, and offering favourable loan terms are just some of the promoted ideas.

Although these arguments make sense intuitively, the government has to take another very important consideration in mind – the needs and wants of the average passenger. The reason international airline’s take so much of the market share is because passengers prefer punctuality, quality service and safely over supporting local businesses. To artificially impose local airlines – many of whom are in shambles – would deprive the passengers of their right to choose the best service.

Increased traffic for local airlines will definitely increase their revenue, but they must also have the professional capacity to handle the increased flow – a prerequisite they still lack. It makes more sense to invest and improve services to organically attract customers, as that is a more sustainable growth model.

Discounting the more radical suggestions, the others can definitely be incorporated. A regime of tax breaks and monetary incentives can give local airlines a little breathing space, but that is no grantee that it will lead to improved quality or improved market share.

Pakistan has to make improvements to its aviation industry, but it must also realise the competing with Arabian-oil rich airlines is an uphill battle. Countries like UAE and Qatar have made their aviation industry a crucial part of the national revenue, and as a result they not only dominate the local market, but also the global one. It cannot be helped, but Pakistan’s proximity to such a well-run and deep-pocketed airline industry is the bane to its local industry.

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