Professional Documents
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Project On PIA by Zain PCBA
Project On PIA by Zain PCBA
BS (BA) 8TH B
JULY 20TH, 2009
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My beloved AMI and Bhai
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First of all I am thankful to Allah then I would like to record my heartful thanks to
specially my respected Professor Sir Aymen sajjad. And to my dear
friend Muhammad Umar who help me out in the report editing and
fromating.
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The pursuit of excellent through technology and quality control and ushering in a new era
of growth and development.
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1) EXECTIVE SUMMARY………………………………………………. 7
2) INTRODUCTION……………………………………………………… 8
4) HIERARCHY OF PIA………………………………………………….. 9
6) CORPORATE MISSION……………………………………………….. 10
7) VALUES………………………………………………………………… 10
8) REVENUE COMPOSITION……………………………………………. 14
9) MAJOR COMPETITORS……………………………………………….. 14
14) References…………………………..…………………………………… 32
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EXECUTIVE SUMMARY:
In 1955 Pakistan International Airline formed. 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.
PIA is three stars International Airline. In our report we did SWOT analysis and PEST
analysis on PIA, identify major strength we find as leading market position, brand
recognition, superior operating structure, network presence, hub airport at Karachi, and
effective use of technology. Formulation on GOVT rule, High dependencies on passenger
revenues, high debt, and reliance on oil prices are major weakness, opportunities are like
having MAX route and fleet, growth demand for low cost airline, customer loyalty,
shifting customer needs and industry recovery, and major threats are high interest rates,
accidents, strong competition by Air blue, interest and foreign currency exchange rates,
and decline in industry. In PEST analysis we discover major Government’s active role in
increasing competition in the airline industry, inflation rate, turning of social environment
of Pakistan liberal with the new regime. Innovation in technology, and its impact on
distribution and cost synergies from industry consolidation.
We recommend PIA for better service to decentralized its management system, develop
SBUs, adopt transparent promotion polices, employee empowerment to increase the
employee motivation and moral. Try to decrease its overhead cost, adopt effective
marketing policy, two way communication and TQM. Upgrade its fleet; purchase new
Airplane with twin engines these will reduce the operating cost of PIA. Improve control
over fares. Hire the services of IT specialists; improve service standards focusing on
quality.
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Pakistan International Airlines
INTRODUCTION:
When Pakistan was founded in 1947 it comprised two
territories on either side of the expanse of India. It was in this unusual circumstance that
Pakistan International was formed in 1955. Despite wars and economic trouble, the
carrier survived to grow and prosper. 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%). It has 19,263 employees (at March 2007).
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1) 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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2) CORPORATE VISION OF PIA:
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3) CORPORATE MISSION
4) VALUES:
6.2). Service:
PIA aims at providing valuable and unique services to its customers. They
are more personalized and courteous to their customers. The services are valuable and
rare; this is the reason why customers trust PIA.
28 Nov 2004, Pakistan International Airlines - PIA passed the IATA Operational Safety
Audit (IOSA) benchmark for global safety management The IATA Operational Safety
Audit (IOSA) is the benchmark for global safety management in airlines
KARACHI, 22 October 2007 – Abacus Pakistan officially launched Abacus Travel
Secure with AIG, providing local travel agents and travelers easy and convenient access
to AIG’s travel insurance policies. Available for the first time in Pakistan, Abacus Travel
Secure brings real time and immediate activation of travel insurance policies to the
Pakistan travel industry with a more streamlined and time saving application process for
travel agents
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6.3) Innovation:
PIA currently has a number of 43 fleets and aims at increasing this
numbers to 53 by the next few years.PIA is adoptive to changes and believe in innovation
that’s create new ideas and translating these ideas into action.
6.4) Reliability:
PIA is the most experience airline with its service with more than 53
years. This has built in PIA has become the most reliable airline. PIA is known for its
loyalty and consistency.
6.5) Safety:
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The most challenging responsibility of any organization is to provide
complete satisfaction to its employees and customers together. This satisfaction rewards
favorable and easy working conditions.
The in-flight services are customers friendly and the organizational the organizational
environment is also employees oriented.
6.6) Cohesiveness:
PIA has 12 departments working in their own direction and also
provides a number of services including speedex courier service, catering etc. The most
impressive part is these all department and services are integrated in a cohesive way.
Services
i) Business Class
It’s the only Business Class service that feels like First Class. A
comfortable seat makes all the difference on a long flight. PIA's Business
Class Seats elevate the concept of luxury to a new level, fully endorsing
your decision to choose PIA Business Class Sit back and relax in our
exclusive Business Class Lounges at the Karachi, Lahore, and Islamabad
airports.
Our hospitable staff will ensure that you're well looked after during your
stay with us at the airport Business Class passengers arriving at Airport will
receive a warm welcome from PIA.
Our representatives will walk you right through all the arrival formalities
so that you don't have to stand in line or worry about clearance.
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PIA’s economy class is also comfortable for
passenger as Business class. Economy Class offer seats with a 32-inch
pitch, adjustable footrests and "winglet" headrests for improved neck
comfort. The personal TV provides on-going entertainment including audio
and video on-demand choices.
Passengers enjoy the same caring service from our flight attendants, along
with skillfully prepared meals and a wide range of in-flight entertainment
options to choose from. Free newspapers are also provided to all Economy
class passengers.
The PIA in-flight magazine, Hamsafar, is provided to all passengers on all
international flights. Humsafar was introduced on PIA flights in 1980 and it
is published bi-monthly.PIA is providing its service in twenty-five cites of
Pakistan domestically which are as follows:
Giigit Quetta
Chitral Bahawalpur
Skardu Rahim Yar Khan
Saidu Sarif Dalbandin
Islamabad Sukkar
Peshawar Panjgor
Sialkot Sukkar
D.I,Khan Jacoababad
Lahore Turbat
Faisalabad Moemjodaro
Multan Gwadar
Zhob Pasni
D.G.Khan karachi
REVENUE COMPOSITION:
According to the latest report of
PIA, 87% of revenue generates from passengers, 8% of revenue generates
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from cargo and remaining 5% consists of others. Fleet Pakistan
International Airlines fleet includes the following aircraft (as of May 2008)
MAJOR COMPETITORS:
PIA is holding the first position in
market. It has 48% market share. Its major competitors are Airblue and
Shaheen International Airline. Airblue has a market share of 35% while
Shaheen International Airline has 17% market share. People feel
prestigious to travel with PIA as compare to Airblue and others.
9.2) E-Ticketing:
KARACHI, 22 October 2007 – Abacus
Pakistan officially launched Abacus Travel Secure with AIG, providing
local travel agents and travelers easy and convenient access to AIG’s travel
insurance policies.
Available for the first time in Pakistan, Abacus Travel Secure brings real
time and immediate activation of travel insurance policies to the Pakistan
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travel industry with a more streamlined and time saving application process
for travel agents.
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:: PIA PAKISTAN INTERNATIONAL ::
a 3 Star Airline
SUMMARY RANKING
Combined Quality of Product / Staff service in airport and onboard
environments
Business Class
Premium Economy Class
Economy Class
Airport Services
Check-In service - Business Class
Check-In service - Economy Class
Transfer Services - Business Class
Transfer Services - Economy Class
Arrival Services
Business Class Lounge - product facilities
Business Class Lounge - staff service
Onboard Features
Inflight entertainment may vary according to aircraft type
Cabin Safety Procedures
Inflight Entertainment
Amenities, Blankets, Pillows, Towels etc
Airline Magazine, Newspapers & other mags
Cabin Seat Comfort Seat Guide
Seating may vary according to aircraft type
Business Class - long haul
Business Class - short haul
Premium Economy Class - long haul
Economy Class - long haul
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Economy Class - short haul
Onboard Catering
Business Class - long haul
Business Class - short haul
Premium Economy Class - long haul
Economy Class - long haul
Economy Class - short haul
Cabin Staff Service
Business Class - service efficiency
Business Class - staff attitude & friendliness
Premium Economy Class - service efficiency
Premium Economy Class - staff attitude & friendliness
Economy Class - service efficiency
Economy Class - staff attitude & friendliness
Responding to Passenger requests
Cabin presence through flights
Assisting Parents with children
Staff Language Skills
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6) SWOT ANALYSIS
10.1) STRENGTHS:
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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.
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ticketing system and the second in South Asia to introduce self check in
systems at the Jinnah International Airport, Karachi.
10.2) WEAKNESSES:
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 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.
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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.
10.3) OPPORTUNITIES:
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have to spend money targeting new customers to replace those lost to other
airlines.
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.
10.4) . THREATS
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.
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Accidents can adversely affect customer confidence in PIA and result in
declined revenues intensifying competition.
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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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7) PEST ANALYSIS
i) POLITICAL FACTORS:
Political factors always have a great
influence on the way businesses operate in the airline industry and the
spending power of customers. In recent years it has been observed that
government played an active role in increasing competition in the airline
industry. A number of new airlines such as AirBlue and JS Air have been
awarded licenses to enter the domestic market.
Pakistan has achieved some political stability in recent years. If the
management of PIA believes that the present government will perform well
(consistently), then there will be more investment in the form of purchase
of new airplanes and latest technology. The over all industry will grow
resulting in more luxurious and comfortable flights. With the military
takeover government policies have become more liberal.
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Pakistanis living abroad particularly in the UK and USA. These countries
have strong economies coupled with high purchasing power. Customers’
purchase behavior depends very much on prices of the competing airlines
as well as services offered. As inflation rate is unstable in Pakistan,
spending power of consumers has effected in the long term. In fact growth
in Pakistani economy has resulted in an increase in spending power and has
positively impacted the airline industry.
Economically, the new millennium has been highly volatile; the September
11 attacks revolutionized the whole world. Consequently, there was a
global depression in the North America, South America, Australia and
Europe. However, in Asia especially Pakistan the effect in the short term
was otherwise. The economy began to boom because of greater remittances
from abroad and whole sum immigration by expatriates. As a result,
demand for air travel in South Asia rose.
Economic conditions of Pakistan are however improving. PIA has cost a
advantage over its competitors because of its newly acquired, improved,
long distance aircrafts from Boeing’ which give longer range and better fuel
economy than any other jet currently produced. This cost advantage is a
barrier to entry for new firms. However, this cost advantage will not be
significant on domestic routes.
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Hajj attracts a huge number of customers. The social environment of
Pakistan is turning liberal with the new regime. The initiative to automate
check-in and ticket booking process might not be very popular with the
general public (even educated population) is still technology averse.
E-ticketing might also face significant challenges as consumers are
generally reluctant to provide their credit cards information over the phone
and the internet. The consumers, however, have a warm reaction to the
prospect of less costly but quality service flights.
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8) RECOMMENDATIONS FOR PAKISTAN
INTERNATIONAL AIRLINES
a) Decentralization:
PIA should decentralize its structure that would
lead to the easy management, increased motivation, easy access to
information and resolution of the conflicts (as they would be resolved by
the immediate manger time span would then reduced). Since employees’
issues regarding their behavior would lessen, so it would ultimately lead to
more satisfied employees that would result in enhanced productivity of the
organization.
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task which can be performed by person PIA had 3 employees for that.PIA
should give bonus to the industrious and competent employees.
d) Employee Empowerment:
PIA should make efforts towards
empowering the employees that is going to lead to more employee
participation in the decision making process and also result in more
employee satisfaction and enhanced motivation. Apart from this, employees
would feel more independent to discuss the issues explicitly without
hesitation.
This would also enhance team work process at PIA as quality team and
cross-functional teams. The employees will work with more commitment
and dedication and every employee would work to his/her fullest due to
increased motivation.
However, with empowerment comes accountability, so it is suggested that
while they empower their employees, there should also be a “controlled
check’’ on them to ensue the correct usage of power delegated to every
employees within their circumscribed limits.
e) Overhead Costs:
PIA should also reduce its overhead costs that are
it should mange its resources: labor more effectively, so that with less
input, more out put can be achieved and the saved resources can be utilized
in other areas such as introducing more training courses for the employees
so that the quality of the workforce could be increased.
Hiring the services of expertise can improve the efficiency of their services,
so by saving the overhead costs, they can utilize that money for the
expertise services. So by analyzing the various segments of the organization
and making the right corrections, it can substantially improve the standards
of Organizational behavior.
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f) Marketing policy:
PIA should adopt good marketing policies so
that it will bring higher profit and maximum utilization of its available
resources, Business sector should be attracted to operate at full potential.
g) Two-Way Communication:
The suggestions of the employees can
prove to be very effective in improving the operations, as they are the ones
who manage them. Therefore, a top-down approach should be replaced
with two-way communications. In this way, the employees would feel
motivated and valued, as they would be included in decision-making
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There should be control on the increase of fares, as mediocre are in
majority in Pakistan, and it is highly difficult for to even think about the air
traveling. Management should think over it and at least they can start a new
packaged flight twice a week having 50% fares. Unnecessary facilities
provided to the Government Department should not be discouraged but
with drawn as it causes financial losses. Management should focus on
computerized system up gradation and implementation. Management
should hire the services of specialized IT personnel for their system
development and up gradation on time.
There should be clear and even distribution of work and only qualified
person should be appointed on jobs. There should be improved service
standards and that should focus on quality. PIA should offer its services of
reservation and seat confirmation with by SMS and flight confirmation
message should also be sent via SMS to the passenger.
PIA should give more incentives to its frequent flyer as it will generate
more brand loyalty by giving better incentives to the customers.
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Corporate image 6 3 4
Total Points 43 40 36
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References
Sites
www.piac.com.pk
http://en.wikipedia.org/wiki/Pakistan_International_Airlines_destinations3
http://en.wikipedia.org/wiki/Pakistan_International_Airlines
www.google.com
http://www.historyofpia.com/
http://www.airlinequality.com/Forum/pia.htm
http://www.britannica.com/EBchecked/topic/438805/Pakistan/23702/Trans
portation-and-telecommunications#ref=ref387351
http://aviation-safety.net/database/operator/airline.php?var=4931
http://www.centreforaviation.com/news/2009/07/10/pakistan-international-
airlines-reports-second-consecutive-operating-profit-in-1q2009/page1
http://findarticles.com/p/articles/mi_m0EIN/is_2006_May_8/ai_n16347759
/?tag=content-inner;col1
http://wwwagse.informatik.uni-kl.de/teaching/pia-scenario/
http://www.abacus.com.pk/news_events/travel_secure.asp
http://www.asiatraveltips.com/news06/95-Abacus.shtml
http://www.etq.com/airsafety/
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