MBA 2016 - MACS

Session 3 - PIA
Assignment Questions
Question 1 Complete Exhibit 7 of the case for PIA and compare the results with three other
international airlines. At present revenue and cost structure, what will be the break-even load
factor for PIA? What will be the effect on profitability if PIA operates with similar load factors
and hours of flight per aircraft per day comparable to those of other airlines?

Question 2 Based on the results of your analysis of question 1 and the industry data in Exhibits
1, 2, 3 & 6, what do you think are the major problems facing PIA?

Question 3 According to the national media, PIA intends to purchase 30 new aircraft by 2020.
Based on your analysis in questions 1 and 2, do you think that it is the size of fleet which is the
biggest problem for PIA?

Question 4 Assume that the average number of passengers flying on the Islamabad-Sukkur route
is 115. Calculate the profitability of this route based on the following data; and then, on the basis
of your analysis, make suggestions as to what should be done?

Aircraft used: Boing 737-200ER

Seating capacity: 300 passengers
KMs /gallons (based on 300 available seats): 132
Price per gallon of Fuel1: Rs.210
Air distance: 1,000 km
Revenue/passenger KM charged for this route: Rs.6.86 per actual PKM

Repair and maintenance, aviation, and passenger costs can be assumed to be the same as are
given in the case for PIA.

http://www.indexmundi.com/commodities/?commodity=jet-fuel&months=120&currency=pkr