ABSTRACT

Government of Pakistan introduced PIA (Pakistan International Airlines) in 1955 main

head offices situated in Karachi while it has sub head offices in Lahore, Islamabad,
Rawalpindi. PIA is considered 16th biggest airline of Asia having fleet size of 38, it is the
countrywide flag c a r r i e r o f P a k i s t a n . I t o p e r a t e s p a s s e n g e r a n d f r e i g h t
s e r v i c e s around the world having vast network expand the globe covered 25 cities
of Pakistan and 30 states internationally. PIA also provide different travelling
packages including Hajj , Umrah , private charter flights for gas and oil companies
and many others. The company owns two hotels named Roosevelt and sofitel paris
scribe. Till 2005 PIA performance was up to mark but la ter the performance started
decreasing and leads to financial crises of firm.

Purpose: The main purpose of this report is to carry out the in-depth SWOT (strength,
weakness, opportunities and threats) Analysis of the two airlines namely Air-blue and PIA in
order to identify internal and external factor and its affect on future performance of these airlines.
It is very important to know SWOT of a company in order to compete in the market and make
rational decision for current and future firm operations, it also provide good ground for
analyzing and implementing strategies based on the findings and results. Beside SWOT, in our
interviews with high profile of these airlines we will try to get insight for PESTAL and porters 5
forces model which then will be analyze along with SWOT; moreover with the help of these
strategies and model we will conduct our research in order to make PIA and Air-blue more
efficient and overcome their lacking.

Methodology /Design/ Approach: Research Design Is exploratory in nature, study is based on

mix methodology qualitative, in qualitative interviews from PIA seniors person and
management will be conduct and through thematic analysis a common SWOT analysis will be
deduced data will be presented in useful information. In this research both primary and
secondary approaches are used, in primary approach in-depth interviews IDIS will be conduct
and during interview questionnaire will be given to employers and employees related to SWOT
of PIA. While secondary data collected from Journals, Articles, company reports and websites.

Research Implications/ Limitations: The aim of research is to basically identify and examines
the SWOT of PIA and air-blue and present it in comparison. Thus the main limitation of the
study is, it only Focus on PIA and air-blue both local airline and both havent performed well in
past few years therefore study cannot categorize between good and bad airline. Apart from it the
study only focuses on the management of PIA and air-blue due to time constraint we cannot
collect information from the final user regarding what they consider as a strength, weakness,
opportunity and threat for PIA.
Scope: Through this study it will help PIA and Air-blue to get better understanding of their
strength, weaknesses, opportunity and threats on their company with the help of this research
they can forecast the future operations of the firm and improve performance as well.

Keywords: SWOT, Airline industry, Passenger, PIA, Air-Blue

Paper Type: Research Paper

 Literature Review #1(Reviewed by Shahzeb Ather)

An assessment of service quality and resulting customer satisfaction in Pakistan

International Airlines

PURPOSE OF RESEARCH:

The researchers of this journal are Faizan Ali, BiditLal Dey and Raffaele Filieri. The journal was
published in International Journal of Quality & Reliability Management, Vol. 32 Issue 5 pp. 486
- 502, 2015. The aim of this research paper is to evaluate the service quality of PIA (Pakistan
international airline) and its effects on customers satisfaction among overseas Pakistanis and
foreigners.

RESEARCH METHODOLOGY:

Quantitative approach used in this research data will be gathering through both primary and
secondary methods for secondary different journals of quality management and reliability were
used beside this article, websites and different books were used. While for primary data
collection survey questionnaire has been adopted survey conduct from foreign and nonresident
customers of PIA Westbrook and Oliver (1991). Data instrument consist of 39 items in
questionnaire including airline tangibility, terminal tangibility, personal item, empathy item and
customer satisfaction items are based on the research hypothesis which is test through 5 points
likert scale Prayag (2007). Before conducting the actual survey pilot study from 25 customers of
PIA who have travelled through PIA in last 12 months was gathered in order to check the
reliability of the questionnaire.

SAMPLE SIZE:

Target population of this study are all passenger who flown through PIA in the last 12 month,
survey conducted face to face in the waiting lounge of Manchester airport and Birmingham
airport in 2012 through convenience sampling. Sampling conducted by distributing questionnaire
to passenger on different times over a day and night for 8 week time period. Sample size of the
study is 848 out of which 498 were handed back with response rate of 58% shows better result
than the previous research on the same area.
RESEARCH FINDINGS:

The research observe the relationship between customer satisfaction and service quality
elements and the study focus on overseas Pakistanis and foreigners who travelled from PIA and
acquire their services . Research findings shows that all hypothesis are positive and support the
study and shows relationship between independent and dependent variable and customers are
influence by the PIA service quality dimension, airline tangibles, terminal tangibles, personnel,
empathy and image. The findings and results of the study are contrast with the previous study
and this study shows that by improving the aircraft and terminal tangibility customer satisfaction
level will improve more. More over study also suggest better quality of interaction with
personnel will result in improved customer satisfaction. Empathy and brand image also indicates
positive relationship with the customer satisfaction.

Apart from this the results also show that beside the stated dimension of service quality
management should also focus on others aspects in order to increase customer satisfaction level.
Lastly Paper suggests that PIA should start a strategy of service differentiation in order to
improve its lacking area in quality of service. Furthermore in service quality of airline catering
service play a vital role therefore PIA should update and focus on their catering. Paper also
recommend in order to create good and reliable image of PIA among overseas Pakistanis and
foreigners PIA should do the periodic maintenance and service of their planes and engines along
with effective cargo handling procedures.
 Literature Review # 2(Reviewed by Sanaullah Munir)

IMAGE BUILDING IN AIR LINE INDUSTRY: A CASE OF PAKISTAN

INTERNATIONAL AIRLINE

PURPOSE OF RESEARCH:

The researchers of this journal are Muhammad Zaheer, Muhammad Tahir Akbar and Dr.
Muhammad Ramzan. The research was published in INTERDISCIPLINARY JOURNAL OF
CONTEMPORARY RESEARCH IN BUSINESS, Vol. 5, Issue 2 pp. 192 - 204, 2013. The main
aim of this research was to understand how customers perceive Pakistan International Airlines
based on the level of satisfaction through their travel journeys along with identifying reasons that
adds to the bad image of PIA prevailing in the Aviation industry by critically examining its
strengths and weaknesses from the point of frequent flyers considering various dimensions of a
good airline service, i.e. in-flight services, customer services, food quality, crew members'
attitude, fare rates and flight delays.

RESEARCH METHODOLOGY:

This research uses both primary and secondary methods of gathering and analyzing data. Primary
data was collected from conducting interviews with the frequent flyers of the airline as they are
the people who have clear idea of the service quality of the PIA residing in Lahore. Along with
this, questionnaire was formulated based on some variables that would clearly define the image
of PIA in terms of customers perception. Secondary data was collected by analyzing various
descriptive studies, articles, journals and annual reports.

SAMPLE SIZE:

In this research in depth interviews were taken from only the frequent flyers residing in Lahore;
10-12 respondents were selected based on their past travelling frequency.

RESEARCH FINDINGS:

Understanding this research, it was inferred that PIA faces many problems being a part of the
aviation industry in Pakistan in terms of the competition they are facing along with an increase in
the labor costs and extra charges that they have to borne despite stagnant performance.
Furthermore, it is found that an airline to be no-frill, must take into considerations the regulations
that affects the civil aviation along with adherence to the safety regulations that are an industry
norm.

Secondly, the variables that contribute to the bad image of the airline in the minds of the
consumers are lack of quality ambience in an aircraft, non-cooperative crew members, and
unjustifiable fare rates that are making them lose their market share despite being the market
leader. Furthermore, PIA has a lot of image building to do because it has not created an
impressive image in the market in the past few years. The main reasons were last minute
cancellation or late timings of the local flights. Also the planes used for local flights were in very
poor condition.

Lastly, the research explains that in order to gain their image back in the minds of the consumer
especially the people who fly very frequently with the airline, PIA has to focus on improving the
quality of their service along with improvement in the in-flight services, booking services, food
and most importantly their overall flight experience from the start to the end.
 Literature Review # 3(Reviewed by Yasir Abbas Merchant)

AIRLINE SERVICE QUALITY IN PAKISTAN A CUSTOMER PREFERENCES

ARRPOACH

PURPOSE OF RESEARCH:

This work of Mr. Sartaj Qasim (2015) sheds light on the service and value factors that are of the
highest importance to passengers traveling by air transport mostly on domestic flights within
Pakistan. The research is an airline industry specific document which revolves around the
Pakistani customer preferences only.

RESEARCH METHODOLOGY:

The primary research objective was to recognize those service aspects that airline passengers
typically consider most and least important when travelling via domestic airlines in Pakistan. The
mean importance ratings obtained for each of the service items were calculated and ranked from
the highest to the lowest scores. Overall, the service factors were ranked within the following
four dimensions labeled: convenience of booking, cabin services, cabin crew, and timeliness of
flight. The literature gathered around domestic flying airline passengers like: PIA, Air Blue,
Shaheen and Bhoja Air.

A questionnaire was developed by De Jager (2013) which was adopted with certain minor
modifications in order to gauge the foregoing attributes and passengers expectations regarding all
phases of the air travel experience. It was used to collect information from passengers at Quaid e
Azam International Airport, Karachi over a two week period. In addition to this, they also took
personal interviews with passengers and the information was recorded over a 2 week period. A
7-point Likert scale was used ranging from 1 being most important and 7 being not at all
important. The Hypotheses presented by the research argued upon each of the 4 service quality
aspects being important to the traveling passengers.
SAMPLE SIZE:

The sample size was 100 passengers from Quaid e Azam International Airport. The sample was
selected through convenience sampling technique. The survey methodology included personal
interviews from the passengers.

RESEARCH FINDINGS:

The main research objective revolved around recognizing those service aspects that domestic air
passengers rate the highest and the lowest in importance. The mean importance rantings obtained
for each service item were calculated and ranked from highest to lowest. The highest mean rating
was given to convenience in making the reservation/booking by the Pakistani passengers
whereas; the lowest rating was given to adequacy of information on airline websites. The factor
rated the second most important was the allowance of weight by the passengers. In the second
phase of the study, the relative importance of the four dimensions were analyzed and studied.
The results show timeliness of flights was rated the most important dimension amongst all three
dimensions.
Research Findings and Discussion: (Thematic Analysis of Interview with PIA
and Air-blue management staff.)

1: Would you please share your main achievements over the last three years?

Participants Answers Theme

PIA P1 Recently many developments have been taken
place. Things have started to pick up, the PIA has
started operation to India and Far East, and the
foreign carriers who closed their Pakistan
operations are back.
PIA P2 As per PIA achievements - fleet status:
PIA in 2013 owned only 21 aircrafts
including 8 777 aircrafts, 6 A310, 5 ATR,
1 B747 and 1 B737, however it increased
to the number of 38 in 2015 by adding 4
ATR, 3 777 and 13 A320 whereby 1
A310 was sold. In 2017 the even figure
will increase to total of 43 aircrafts
including the increase of 2 A320, 2 ATR
and 6 A330/777.
PIA has managed to trim down the
employee to Aircraft ratio from 790 per
Improvement in operations
aircraft, which was in 2013, to 390
employees per aircraft in 2015, and it is
expecting to further reduce to the number
of 295 employees per aircraft. However,
the fleet age which was 16 years in 2013
and 10.7 years in 2015 will further be
reduced to the number of 9.5 years.

PIA has been ranked as a 3-star airline

by Skytrax, the worlds official airline
and airport reviewer.
First airline in the world to start Air Safari
with jet aircraft
First airline in the world to induct the
Boeing 777-200LR, the worlds longest
range commercial airliner
 PIA Flight Kitchens in Karachi were
awarded the HACCP Certification
PIA has been ranked as a 3-star airline
by Skytrax As per PIA achievements -
fleet status: PIA in 2013 owned only 21
aircrafts including 8 777 aircrafts, 6
A310, 5 ATR, 1 B747 and 1 B737,
however it increased to the number of 38
in 2015 by adding 4 ATR, 3 777 and 13
A320 whereby 1 A310 was sold. In 2017
the even figure will increase to total of 43
aircrafts including the increase of 2 A320,
2 ATR and 6 A330/777.
PIA has managed to trim down the
employee to Aircraft ratio from 790 per
aircraft, which was in 2013, to 390
employees per aircraft in 2015, and it is
expecting to further reduce to the number
of 295 employees per aircraft. However,
the fleet age which was 16 years in 2013
and 10.7 years in 2015 will further be
reduced to the number of 9.5 years.
PIA has been ranked as a 3-star airline by
Skytrax, the worlds official airline and
airport reviewer.
First airline in the world to start Air Safari
with jet aircraft
First airline in the world to induct the
Boeing 777-200LR, the worlds longest
range commercial airliner
PIA Flight Kitchens in Karachi were
awarded the HACCP Certification
PIA has been ranked as a 3-star airline
by Skytrax, the worlds official airline
and airport reviwers
First airline to show in-flight movies on
international routes
The first airline in South Asia to introduce
auto-ticketing facility
ytrax, the worlds official airline and
 airport reviewers.
First airline to show in-flight movies on
international routes
The first airline in South Asia to introduce
auto-ticketing facility

Air-Blue
P3

2. Can you please tell us about your success in achieving your strategic objectives?

Participants Answers Theme

PIA P1 PIA aims to carve the utmost flying experiences
consistently. Our objective is to set the standard
of excellence for flying across the globe by
always striving hard to provide unmatched
services to all our prestige guests when it comes
to safety, entertainment and punctuality and the
most state of the art airplanes gives us an extra
edge to meet our customer needs consistently and
to grow more.
PIA P2 Increase market share Of PIA by 5%
Monitoring routes successfully Strengths that they had
Introduce PRI (Pakistan remittance worked upon in increasing
initiatives) and make it successful their market share and also
Introduce new flights and work on tax praising of their airlines.
revenue management system
However we have achieved our objectives up to
certain extend and still working on it to
accomplish our goals with further improvement
in overall structure but still there are some
lacking on the management side of PIA and due
to the external factors revenue of airline affected
badly with overall performance.
Air-Blue
P3
3. Please share your experience about targets? Have you met or exceeded your targets?

Participants Answers Theme

PIA P1 I believe I have covered it in last questions
PIA P2 It is the market share that we targeted and we
They believe they have
have achieved it though we think that it was not a
achieved the target which
very difficult one to achieve
they set for themselves.
Air-Blue
P3

4: What do you think about your current services? Do these services meet users requirements?

Participants Answers Theme

PIA P1 Customers are never satisfied we are doing a lot
to satisfy them but they just dont seem to get our
effort always criticizing our airline. I dont know
what they dont like about us but there are a lot of
things they dislike about us. But we know we are
giving them valuable and unique services. Our
staff They are more personalized and courteous Here they have focused on
to their customers. The services are valuable and their weaknesses that are in
rare; we provide competitive tariff, extensive flight customer experiences
care, convenience to their valued and potential and perception about it.
customers
PIA P2 We believe there are still a lot of things in flight
that can be improved and which will then bring a
satisfaction in customers
Air-Blue
P3

5: Would you please share your opinion about how is your organization regarded externally?
Does it have a good reputation? Are you able to build effective relationships with those you wish
to influence? Do you have a positive relationship with your funders/supporters?
Participants Answers Theme
PIA P1 I still remember the time when PIA was one of
the few things we could talk about with our heads
held high. We felt pride not at the condition of
the age-old planes or technology; not at the in-
flight entertainment system or even the food. It
was not pride in the basic comfort and facilities
provided. Rather, this pride, was for the people
working in PIA the quality and finesse of the
pilots, the expertise and competence of the
technical staff and engineers, the knowledge and
capability of the cabin crew, and of course their
grace and beauty. But now PIA is not regarded as
a reliable and good option for traveling. With the
decline in service and quality, PIA got trapped Here they have focused on
into endless scandals and losses, not just in dollar their weaknesses and
value but in goodwill and reputation. Its hard to reminiscing the old times
believe that the airline that was Asias first to and telling their current
acquire a jet plane in its fleet back in the 1960s situation.
has fallen behind all its peers in the race to
upgrade, update and improve its image. Therefore
its relationship has become weaken with its
supporters.
PIA P2 Certainly not it was in old times but not now we
listens news regarding its downfall in service
quality and management mishaps on television
which shapes the perception about our air line
and as I said we need to improve a lot of things to
be like we were in the past and benchmark for
even emirates back then.
Air-Blue
P3

6. Please share your view about the effectiveness of your management systems and
processes? Is your organization well-structured and efficient or overly bureaucratic?

Participants Answers Theme

PIA P1 Like all other state-owned enterprises PIA has a
strong hold of unions. Privatization of PIA is Bureaucratic
being delayed because of the resistance from
 labor unions. Despite of the fact that there is
overstaffing in PIA, the issue cannot be resolved
because of these unions. Furthermore
Performance and appraisal system in PIA is
pathetic. There is no accountability and reward
system which has resulted in employees
demotivation and laid back attitude. These issues
and rigid structure has resulted in the loss of
effectiveness of systems and management.
PIA P2 Pakistan international airline is government
organization therefore its structure same as other
government owned groups that is Bureaucratic
form, PIA has centralized structure authority and
delegations of power is limited while on the other
side Air blue has open and decentralized culture
as it is private company there organizational
structure is very efficient and have proper chain
of command company follows, Their culture tell
the leadership style, communication style and
group dynamics in organization. Due to the
structured hierarchy of Air blue it impact internal
organization and employees positively and the
sense of motivation and responsibility along with
personal growth and development direct in the
employees.
Air-Blue
P3

7. Please tell about the competition from other or similar organizations in your area?

Participants Answers Theme

PIA P1 PIA is now competing against carriers such as
Airblue and Shaheen Airline. PIA remains
Airblues strongest competitor because of the
Telling about the
huge market it has gained over time, strong brand
competition and what they
image and customer loyalty. PIA has started new
do differently to gain
low-fares subsidiary PIA Express to stop the
customer loyalty.
Airblue market share growing too 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 companys margins.
PIA P2 PIA operates both domestically and
internationally. So it has different competitors on
both scales of operations. Within the country PIA
has Airblue as a competitor.
Airblue is a private airline based in Karachi,
Pakistan. It is a scheduled domestic and
international airline operating 30 daily services
linking seven domestic destinations and
international services to Dubai and Manchester.
Its main base is Jinnah International Airport,
Karachi. Airblue was the first airline in Pakistan
to introduce-ticketing, wireless check-in and self-
check-in kiosk facilities.
PIA is having market share of 48.4% in the
international market and having tough
competition from its international competitors.
International competitors of PIA are Thai Airline,
Ethad Airways, Qatar Airways and Singapore
Airline
Air-Blue
P3
SWOT ANALYSIS OF PIA:
Strength
1. Subsidized fares.
2. Halal meat available at all flights
3. Electronic ticketing by web and through
SMS.
4. Highly Professional Staff.
5. Having Governments protection.
6. PIA has status of being Flag Carrier of
Pakistan.
7. Highest Market Share at domestic
network.
8. Multilingual Staff on Board.
9. Booking Offices in all major cities both
at domestic and International
10. PIA has well established brand as its
oldest airline in Pakistan.
Opportunities
1. PIA has huge potential market in Middle
East if PIA upgrades its fleet.
2. PIA has largest domestic network and
by proper route planning PIA can
generate huge amount of Revenue with
higher profit.
3. PTDC provides favorable market for
domestic as well as international sectors
for the airline.
4. PIA can generate more revenue by
attracting customers through Web and
Mobile Reservations system.
5. Un served markets (Speed Ex. courier
service can be made international)
6. Better training programs
SWOT ANALYSIS OF AIRBLUE:
Weakness
1. Old aging fleet of PIA causing higher
operating cost.
2. Huge burden of Employees which cause
financial burden.
3. Inadequate space on the aircraft.
4. Charging of higher fare as compared to
competitors.
5. Lack of marketing activities as
compared to competitors.
6. Poor quality of food/service on board
especially in domestic flights.
7. Corrupt management
8. Lack of professionalism among staff
9. Low salary of staff specially engineers
Threats
1. Negative rising perception about the
country, regarding terrorism.
2. Political instability and law and order
situation.
3. Rising fuel prices in the world.
4. Over staffing at all levels.
5. Strong competition
6. Frequently rising Airlines fare.
7. Fast growing domestic and international
competitors.
8. Effective promotion strategies adopted
by other competitors like Emirates and
Shaheen and Air blue.
PESTEL ANALYSIS FOR PIA AND AIR-BLUE:

Political Economic Social

1. Political instability 1. Rise in fuel prices lead 1. People are more in to
2. Political pressure to rise in fare price travelling.
2. Inflation also cause 2. Security is main
problems in economy concern

Technology Environment Legal

1. No proper supply 1. Fuel Emission 1. Liquor cant be served
chain 2. Green Fuel 2. Redundancies of
2. Logistical issues employees cause court
issues.

PORTERS FIVE FORCES MODEL:

Threat of new entrant high (due to globalization of services and ease by government)

Bargaining power of buyer high (as there are a lot of airlines which serve the same services
and in better ways

Bargaining power of supplier low (as there are many available as them)

Substitutes products high (taxi, boats, ships, trains)

Rivalry among existing firms high (high as each one is competing for market share)

Conclusion: