Illustration by Abro
The Middle Eastern airlines may reap rich dividends of a growing aviation market in Pakistan as pilots of the local industry struggle unsuccessfully to assume control of the lucrative sector.
Heads down, people are waiting for the rough patch to pass, suppressing their fears of hard landing of the domestic aviation industry.
The actual size of the aviation market, value-wise, is not known, but background research threw up some interesting data. A senior official in the sector told Dawn that the total air passenger turnover in Pakistan is about 14.2 million in a year. International passenger traffic touches 7.6 million, 15-20 per cent higher, than 6.6 million domestic travelers.
The gap between the expanding aviation market and the troubled national aviation industry has sparked a controversy among the stakeholders (flight operators, civil aviation, business community, passengers and the government) blaming each other for the situation. It partially explains the delay in the announcement of the new aviation policy on which work started in 2005.
“The draft is sitting with the government. With a government swamped with so many issues so close to election, I don’t see it inclined to open another Pandora’s box as it cannot afford to pick and choose between conflicting interests”, an informed source in Islamabad confided.
Meanwhile, aggressive international airlines supported by their respective governments have increased their penetration in the growing market.
Pakistan recently allowed five international airlines to begin direct passenger and cargo flights from Sialkot International Airport. Qatar Airways, Fly Dubai, Air Arabia, Etihad Airways and Emirates would start their operations from Sialkot soon. The number of international flights to various foreign destinations from the industrial city will reportedly rise to 45 from existing 21 in a month.
The business community was thrilled. “The transport costs and the ability to respond to demand swiftly in a fast changing, competitive international market makes or breaks a business. Better connectivity will save local businesses time and money. Siakot will return favour by investing in modernisation of the airport and jacking up efforts to outperform their competitors in the international trade”, Mohammad Azam, a businessman from Sialkot commented.
“Sialkot is a big commercial centre with a motivated business community. The decision is a step in the right direction”, Zubair Motiwala, a known business leader said when reached over telephone.
The ministry that authenticated the government’s decision, however, did not share the euphoria. The ministry of defence, responsible for the aviation industry, detested the move that, it said, was forced on it. It believed the decision compromised national interests.
“People will still be happier if you allow them to travel free but would you do that?” a senior officer in the ministry asked when contacted in Islamabad for comments. “The sound economic decisions are not necessarily popular”, he answered without waiting for a reply.
“You have appointed bear to guard honey”, said another official, mincing words, hinting at corruption among politicians. “The decision to allow airlines of ‘brotherly’ Muslim nations the new pick up points has more to do with wealthy emirates ability to please political leaders.
Who in the world promotes others at the cost of his own interest? No one does. If PIA’s market has been served to others it should not be hard to guess why”, he added, hinting at questionable deals of some politicians with rich Gulf States.
“Most of these rights are granted on the basis of reciprocity and after bilateral negotiations between countries. You have allowed Emirates to operate from several destinations in Pakistan. How many destinations can Dubai offer to your national carrier? If you can only use one airport because that’s all they can offer you, is it fair to trade it for six?” a senior defence ministry official asked.
In support of his argument he quoted from the current aviation policy “Fifth freedom rights to be granted strictly on the basis of reciprocity, ensuring balancing of rights in terms of market value and that the commercial interests of Pakistan are not compromised. Selective concessions may be made for quality airlines”.
In all 24 foreign airlines enjoy operating rights in Pakistan, flying 216 flights in a week against 352 flights operated collectively by national carrier PIA and private airlines Air Blue and Shaheen Air.
Attempts were made to contact foreign airlines granted facility in Sialkot but for Emirates none responded. In a short statement emailed to Dawn it stated: “Emirates operates from Karachi and other cities under rights granted by a valid air service agreement between the governments of UAE and Pakistan”.
Some aviation experts mocked views of the defence ministry. They supported open sky policy that, they said, would be the starting point if the sector is to navigate a turnaround to economic viability and growth.
“What do retired generals know about business? If you ask doctors to build bridges and engineers to treat the patients it will not work”, a former CAA chief said lamenting what he called “the presence of army men’s little finger in every pie”.
“Why should people and business suffer for follies of others? If PIA is sinking with Rs154 billion accumulated losses, which are still piling up, it has not been managed professionally. We need to let it go down for it to rise again on sound foundations”, an expert said.
“The competition will help. People deserve the right to choose. Yes, I believe an open sky policy will serve the country better”, Farooq Rehmatullah, a respected retired corporate executive said.
“It is the growing middle classes, having comparatively higher propensity to spend than their counterparts in the region, which attracts businesses to Pakistan despite associated risks”, a market watcher commented.
To realise the potential in the sector, Pakistan will need more airports, higher capacity, supporting infrastructure, finance and human resources. It would require consensus and collaborative approach between the government, industry and the public at large.