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“PIA HISTORY”
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.

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PIA 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.

PIA Training Center:

The PIA Training
Center is a leading airline training institution that delivers
the highest standards of aviation instruction. The Training
Center is built around a highly advanced training
infrastructure, approved by local and international regulatory
authorities such as CAA, ICAO, and IATA. The PIA Training
Center's courses are based on a unique, standards-based
curriculum designed to impart knowledge and best practices
in all the aspects of the airline industry. The PIA Training
Center provides quality training to PIA's pilots, engineers, air
hostesses, and to employees of other associated PIA
divisions.

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 HISTORICAL PROFILE

1. HUMAN RESOURCE.
2. MARKETING.
3. CORPORATE PLANNING.
4. INFORMATION SERVICES.
5. FINANCE.
6. FLIGHT SERVICES.
7. FLIGHT OPERATION.
8. ENGINEERING.
9. PROCUREMENT AND LOGISTICS.
10. CUSTOMER SERVICES.
11. TRAINING AND DEVELOPMENT.
12. QUALITY ASSURANCE.

MANAGEMENT PIA

CAPTAIN MOHAMMAD AIJAZ HAROON MANAGING

DIRECTOR OF PIA:

Captain Mohammad Aijaz Haroon assumed the charge of

Managing Director, Pakistan International Airlines on May 7,
2008.
Captain Mohammad Aijaz Haroon has over thirty years of
airline experience with vast expertise in major operational
areas of the airline. He joined PIA in the year 1977 as a

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Cadet Pilot. He has served the national airline as Chief Pilot
of F-27 aircraft besides having over 16,000 hours of flying
experience on different aircrafts and has been flying the
latest B-777 aircraft since 2004. He holds ICAO Airline
Transport Pilots license with Simulator / Flight Instructor
Rating on all aircrafts in PIA and possess a Simulator
Instructor & DCP “A” Check Captain endorsement license for
Boeing 777.
He has also held Senior Management positions in PIA
including General Manager Central Control, General Manager
Airport Services and Director Airport Services.
He is married and has three children.

Managing Director
Captain Mohammad Aijaz Haroon
Deputy Managing Director
Mr. M. Salim Sayani
Chief Financial Officer
Mr. Arif Majeed
Director - Corporate Planning
Mr. Shahnawaz Rehman
Director - Engineering and Maintenance
Mr. Maqsood Ahmed
Director - Finance
Muhammad Ziyad A Syed
Director - Flight Operations
Capt. Shuja Naqvi
Director - Information Technology
Mr. Shahid Sarwar
Director - Human Resource & Administration
Mr. Hanif Pathan
Director - Marketing
Mr. Salah uddin
Director - Precision Engineering Complex
AVM Muhammad Kamal Alam Siddiqui

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Director - Procurement, Logistics and Food Services
Mr. Imran Ahmed Khan

Director - Training and Development

Mr. Dilawar Farid Baig
Director
Mr. S. Kamran Hasan

General Manager : Corporate Safety & QA

Capt. Salman Azhar
Chief Engineer: Engineering QA
Mr. Aslam Tariq
General Manager: Passenger Handling Services
Mr. Syed Aijaz Mazhar
General Manager: Ramp Services
Capt. S. Bayar Masood
General Manager: Management Information Services
Mr. Zulfiqar Husain
General Manager: Public Affairs
Mr. S. Sultan Hasan

HIERARCHY OF PIA:
This organization is divided into following
departments: Human Resource and Administration, Marketing, Corporate Planning,
Information Services, Finance, Flight Services, Flight Operation, Engineering,
Procurement and Logistics, Customer Services, Training and Development, Quality
Assurance. The organ gram of the organization follows, with the Chairman at the top and
directors of departments reporting to him.
The structure is centralized with the top-level management making the decisions.

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PIA DECISION MAKING:
How can donors and partner countries assess the intended
and unintended consequences of donor interventions? The
Organisation for Economic Cooperation and Development
(OECD) explores ex ante Poverty Impact Assessment (PIA),
which can assist in modifying the design of interventions to
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improve pro-poor impacts by identifying key areas for
monitoring and evaluation (M&E). It can be applied to most
modalities of donor support.

PIA is a process which helps policy-makers to understand the

intended and unintended consequences of their
interventions. This approach considers that good design of
an intervention requires governments and their partners to
understand the effect of their policies on diverse social
groups, actors and institutions, including those not targeted
by the policy.

The Paris Declaration on Aid Effectiveness stresses the

importance of results-oriented frameworks, harmonisation
and alignment to improve aid effectiveness and to assure
better pro-poor outcomes. Yet, prior analysis of the impacts
of policy and investment decisions on poverty reduction is a
complex task. It is often built on contentious assumptions
and is dependent on data availability. Ex ante PIA helps
donors and their partners understand and maximise the
poverty reducing impacts of their interventions. It responds
both to the need for accountability to partners’
constituencies and to the importance of transparent
evidence-based decision-making. It can identify
interventions with high impact on poverty reduction and pro-
poor growth as well as mitigating measures to protect the
poor. A broad application of ex ante PIA could also provide a
basis for a harmonised reporting system on poverty impacts.

Poverty Impact Assessment helps decision makers

determine strategic choices for public actions so as to have
the greatest impact on reducing poverty and achieving pro-
poor growth. PIA provides a better understanding about
potential winners and losers of an intervention and thus
strengthens a results-oriented approach. PIA helps to
understand stakeholders and institutions that influence and
are influenced by an intervention understand the importance
and inter-relationship of specific transmission channels
through which changes are transmitted to the stakeholders
assess the likely positive and negative outcomes for
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stakeholders taking into account multi-dimensionality of
poverty assess the reliability of data/information and
knowledge gaps.

Using PIA, policy-makers can estimate the likely quantitative

and qualitative outcomes of the policy for poor groups,
identify potential risks and assess the reliability of available
data. Through involving people with different interests and
approaches, ex-ante Impact Assessment helps to save
resources, and design interventions to be better targeted to
achieve their goals and avoid unintended harmful
consequences. Thus it also contributes to strengthening the
transparency and accountability of democratically elected
governments, and encourages consistency of policy-making
across policy areas.

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SWOT ANALYSIS OF PIA
INTERNAL FACTOR
STRENGTHS:

i) . LEADING MARKET POSITION:

PIA is one of Pakistan’s leading air
carriers, with more than 800 daily flights. Around 150,000 passengers a month fly on
PIA, making it one of the major operators in the domestic market in terms of passenger
kilometers.
PIA’s international market share was 43.5%, In the Domestic market, its market share
was 69.4%. On a system-wide basis, PIA’s market share was 51.2% at the end of year
2007.Its strong market position is driven by consistently low fares as well as reliable
service, frequent and convenient flights, use of new technologies like e-ticketing and self
check-in terminals, comfortable cabins and superior customer service.

ii) BRAND RECOGNITION:

PIA has high brand recall. It is recognized by
travelers all over the country. PIA is a national airline, operating passenger and cargo
services covering eighty-two domestic and foreign. PIA has earned the number one

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ranking in customer satisfaction. This strong market position gives the company a scale
advantage and helps it strengthen its brand image.

iii) SUPERIOR OPERATING STRUCTURE:

PIA has maintained its position as
the low cost carrier. It has been first class Pakistani airline to use the latest technology.
Factors’ contributing consists of different series of Boeing and Airbus and an efficient,
high-utilization and point- to-point route structure.
Flying one type of aircraft significantly simplifies scheduling, maintenance, flight
operations, and training activities. PIA has continually achieved high asset utilization and
employee efficiency. Superior operating structure serves as the primary competitive
advantage of PIA.

iv) NETWORK PRESENCE:

PIA enjoys a strong network in key domestic and
international destinations. The company’s network includes three the major airports in
Pakistan, as well as major international airport such as Dubai International Airport.
Having a strong network means that PIA can generate traffic feed for both its domestic
and international Flights.

v) HUB AIRPORT AT KARACHI:

PIA operates from its hub in Jinnah
International Airport, Karachi. Jinnah International is one of the world’s busiest airports
in terms of number of passengers carried. It is also one of the largest international
gateways to Asia. It is also the leading international air passenger (and cargo) gateway to
Pakistan. The company’s strong presences in airports with heaviest traffic levels in
Pakistan give it a competitive advantage.

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 vi) EFFECTIVE USE OF TECHNOLOGY:
PIA has successfully incorporated
latest technology in all its systems, giving it an edge over competitors. PIA takes credit
for introducing most new technologies to the Pakistani market. It was the second carrier
in Pakistan to incorporate the c-ticketing system and the second in South Asia to
introduce self check in systems at the Jinnah International Airport, Karachi.

WEAKNESSES:

i) FORMULATION OF GOVT. RULES:

The Basic flaw of this organization is its
consolidation that is centralized system. The key policies, strategies and set of laws are
designed by the upper management. The centralized system is one of the biggest
obstacles of long term success of PIA. PIA centralizes structure lead to barrel between
different level of management, decreased motivation, hard access to information.

ii) HIGH DEPENDENCE ON PASSENGER REVENUES:

Passenger revenues
accounted for 87 percent of the PIA’s total revenue in 2007. Cargo services allow airlines
to generate additional revenues from existing passenger flights. In addition, cargo
revenues are usually counter cyclical to passenger revenues and have lower demand
elasticity than passenger business, which allows airlines to pass on fuel price hikes to
customers.

iii) DEBT:
PIA has a significant amount of 42 billion debts. Current and future debts
could have important consequences for stakeholders of the company. For example, debt
could impair PIA ability to make investments and obtain additional financing for working

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capital, capital expenditures, acquisitions or general corporate or other purposes. Debts
could also put PIA at a competitive disadvantage to competitors that have lesser debt and
could also increase the company’s vulnerability to interest rate increases.

iv) RELIANCE ON OIL PRICES:

PIA’s sustainability, growth and revenues
directly depend on oil prices. A steep rise in oil prices can seriously damage the long
term viability of any airline. Recently many airlines around the world went bankrupt due
to rising oil prices. Airlines need to hedge against this risk by taking proper measures.

OPPORTUNITIES:

i) . HAVING THE MAXIMUM ROUTE AND FLEET:

PIA is having the
maximum route and fleet domestic and international destinations network in Pakistan as
compared to its Competitors. Route and fleet expansion will positively impact the
company’s operations by increasing revenues.

ii) GROWING DEMAND FOR LOW COST AIRLINES:

The growing demand
for air travel is driven by lower fares and consumer confidence. A survey by International
Aviation Authority showed that ticket price is the number one criterion for passengers
when selecting a flight, well ahead of the availability of a non-stop service.

iii) CUSTOMER LOYALTY:

PIA’s frequent flyer and loyalty programs can help it
retain customers. PIA’s Awards+plus (frequent flyer program) was established to
develop passenger loyalty by offering awards and services to frequent travelers. Such
schemes encourage repeat travel on PIA, as passengers seek to accrue the benefits given
to regular travelers. This enables the airline to retain customers and reduce costs, as it

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does not have to spend money targeting new customers to replace those lost to other
airlines.

iv) SHIFTING CUSTOMER NEEDS:

The needs of air passengers are increasingly
changing, as they are becoming more and more price sensitive. If PIA succeeds in
making its prices more competitive, then the company will be able to gain significant
market share.

v) INDUSTRY RECOVERY:
Market analysts believe that the global airline
industry will experience an upturn in fortunes over the next few years. This represents an
opportunity for PIA, as it could generate increased revenues and command market share
if it capitalizes on increases in demand.

THREATS

i) HIGH INTEREST RATES:

The past few years have seen State Bank of Pakistan
impose high as well as low interest rates to check inflation and the over heating of
Pakistani economy. Inflation in Pakistan may see another raise in the short-term.

ii) ACCIDENTS:
There had been five accidents with PIA listed as below:

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 o Pakistan International Airlines Flight PK 705 was a Boeing 720 – 040 B
that crashed while descending to land on Runway 34 at Cairo International
Airport on May 20, 1965 resulting in 119 fatalities.

o Pakistan International Airlines Flight PK740 was a Boeing 707-340C that

crashed after takeoff from Jeddah International Airport on November 26,
1979. All 156 aboard were killed.

o Pakistan International Airlines Flight 268 was an Airbus A300B4-203,

registration AP-BCP, which crashed on approach to Kathmandu's
Tribhuvan International Airport on September 28, 1992. All 167 on board
were killed.

o PIA Flight 554 is the flight number of a Pakistan International Airlines

(PIA) Fokker F27 that was hijacked on May 25, 1998. The flight started
its journey at Gwadar in Balochistan after originating in Turbat, and was
flying to Pakistan's southern port city of Karachi. The aircraft was
carrying 24 passengers and 5 crew members.

o Pakistan International Airlines Flight 688 (PK688, PIA688) was scheduled

to operate from Multan to Lahore and Islamabad at 12:05 pm on July 10,
2006. It crashed into a field after bursting into flames a few minutes after
takeoff from Multan International Airport. All 41 passengers and four
crewmembers on board were killed. PIA has to continuously ensure
utmost safety and security of its passengers.

Accidents can adversely affect customer confidence in PIA and result in declined
revenues intensifying competition.

iii) STRONG COMPETITION BY AIRBLUE:

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 PIA is now competing against
carriers such as Airblue and Shaheen Airline. PIA remains Airblue’s strongest competitor
because of the huge market it has gained over time, strong brand image and customer
loyalty.
PIA has started new low-fares subsidiary “PIA Express” to stop the Airblue market share
growing to fast. Moreover, major legacy airlines have been focusing on restructuring
costs, which has improved their competitiveness. With costs restructured, the legacy
airlines are becoming more formidable competitors in terms of increasing capacity,
matching prices and leveraging their frequent flier programs. Increasing competition
could adversely affect the company’s margins.

iv) INTEREST AND FOREIGN CURRENCY EXCHANGE RATES:

Fluctuating
foreign currency exchange rates can have a significant impact on PIA’s earnings. For
example, as PIA is providing its services to the UK. Negative or positive effects arise
from exchange rate movements as change in expenses.
Strengthening of foreign currencies against the British Pound will positively impact PIA
and vice versa.

v) DECLINE IN AIRLINE INDUSTRY:

A number of factors have caused the
current decline in the airline industry. For example, the threat of further terrorist attacks
since September 11 and a fall in the number of business travelers have both caused
passenger numbers to fall.

These and other factors may continue to affect demand for air travel in the future, which
will affect revenues of PIA. The threat of terrorism may discourage people from traveling
by air and could especially reduce the number of passengers traveling on international
flights.

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