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PRESENTED TO:
GULZAR AHMED
DGM(DISBURSMENT)
EJAZ CHAUDARY
MANAGER(PAX REVENUE)
CO-ORDINATOR INTERNSHIP 2008(FINANCE)
NAZEER TAHIR
SENIOR ACCOUNTS OFFICER
TITLE Page No
Acknowledgement 02
Introduction 03-04
History 05 to 09
Introduction to PIA 10
Vision 11
Mission 12
Values 13-14
PIA Network 15
Brief Introduction of PIA Department 16-18
Board of Director 19-20
Introduction of the report
Finance Department 21-22
Disbursement 23-28
Revenue Accounting 29-37
Accounting 38-39
Payrolls 40
Funds Management 41-44
Budget 45-48
SWOT Analysis 49-61
Conclusion 62-65
Recommendation / Suggestion 66
Bibliography 67
Air travel remains a large and growing industry. It facilitates economic growth,
world trade, international investment and tourism and is therefore central to the
globalization taking place in many other industries. From a global perspective,
the airline industry is making strides towards its goal of sustainable profitability,
partly by improving the efficiency of business operations, but also by
encouraging the public to return to the skies with a more desirable travel
experience.
In the past decade, air travel has grown by 7% per year. Travel for both business
and leisure purposes grew strongly worldwide. Scheduled airlines carried 1.5
billion passengers last year. In the leisure market, the availability of large
aircrafts made it convenient and affordable for people to travel further to new
and exotic destinations. Governments in developing countries realized the
benefits of tourism to their national economies and spurred the development of
resorts and infrastructure to lure tourists from the prosperous countries in
Western Europe and North America. The rapid growth of world trade in goods
and services and international direct investment has also contributed to growth
in business travel.
The outlook for the air travel industry is one of strong growth. Forecasts suggest
that the number of passengers will double by 2010. For airlines, the future will
hold many challenges. Successful airlines will be those that continue to tackle
their costs and improve their products, thereby securing a strong presence in the
key world aviation markets.
Pakistan is an Islamic republic located in the heart of Asia. It lies on the north-
west of the Indian sub-continent, with Iran on the west of it and Afghanistan in
the north. In Pakistan the airline industry is growing day by day as new airlines
have started their operations or are going to start their operations in the near
future on domestic & international routes. But the major problems faced by
aviation industry of Pakistan revolve round reduced volume of air passengers,
undeclared price war on the domestic and foreign sectors, extremely poor
financial health, absence of level playing field, and drastic increase in insurance
costs & inflation in the fuel charges.
To ensure safe and efficient civil aviation operations in Pakistan, the country
facilitates operations in the domestic & the international market of the safest
standards in conformity with ICAO standards by an optimum number of airlines
to encourage competition without dissipating the market. In Pakistan the
aviation industry is managed by the Civil Aviation Authority. The CAA’s
mission is to provide for the promotion and regulation of Civil Aviation
activities and to develop an infrastructure for safe, efficient, adequate,
economical and properly coordinated Civil Air Transport Service in Pakistan.
There are 42 airports in the country being managed by Civil Aviation Authority
(CAA). Out of these, 5 airports via Lahore, Karachi, Islamabad, Peshawar and
Quetta are international airports. The construction of Allama Iqbal Terminal
Complex, Lahore has recently been completed at the cost of Rs. 10.3 billion.
This terminal can handle 6.5 million passengers per annum. Rahim Yar Khan
and Bahawalpur airports have been upgraded for operations of Boeing aircrafts.
Recently the purgation of Gwadar & Turbat airports has been done. Construction
of new Islamabad international airport on BOT basis is being finalized. The
RAO WAHEED Page 7 MAJU
construction of Sialkot International Airport in the private sector is also in
progress.
The other main airlines operating in Pakistan except PIA are Aero Asia
International, Air Blue, and Shaheen Air International. While four other private
airlines; Raji, Hajviery, Safe and Bhoja, in the last after six years of operations,
have already wrapped up their operations.
HISTORY
Pakistan International Airlines PIA can trace its beginnings to the days when
Pakistan still was not a nation. In 1946, Muhammad Ali Jinnah, also known as
Quaid-e-Azam, realized the need for an airline network for the forming country.
He called upon the help of an experienced industrialist Mirza Ahmad Ispahani.
Due to passenger demand, the airline increased its fleet before the end of the
1940s. The government of Pakistan asked the airline to merge into a new
national airline that the government was planning. On March 11 of 1955, Orient
Airways merged with the Government's proposed airline, becoming Pakistan
International Airlines Corporation. Under the PIA name the same year the airline
opened its first international service, from Karachi to London Heathrow Airport
in London, United Kingdom, via Cairo International Airport in Cairo, Egypt and
Leonardo Da Vinci International Airport in Fiumicino, Italy using Lockheed
Constellations. The DC-3s continued operating the domestic services in
Pakistan.
The 1980s began with the opening of a cargo center in Karachi. In 1981, PIA
was named most efficient airline to the Hajj operation, and a duty-free sales
service was inaugrated. From 1982 saw the welcoming of Airbus A300 aircraft
to the fleet. In 1985 the PIA Planetarium tourist attraction was inaugurated in
Karachi and later in Lahore which had static Boeing 707s on display for the
general public. In the same year, five Boeing 737s joined the fleet. At the start of
1987 and 1988 flights were introduced to Malé and to Toronto Pearson
International Airport, respectively. In 1989, the first women pilots started to
command passenger flights.
THE 1990s:
PIA received the first of six Airbus A310-308 aircraft on 25 June 1991 from
Airbus Industrie. In 1992, flights started to Tashkent and in 1993, to Zürich,
Switzerland. In addition, PIA became a user of the Sabre, Galileo and Amadeus
global distribution systems or GDS.
During 1994 PIA added more destinations to its route map with Jakarta,
Fujairah, Balky and Al-Ain and for the first time air safari flights were launched
using a Boeing 737. In 1995 a 747 flight simulation system arrived, and the
purchase of a used Air France A300 aircraft. In 1996 the airline leased Tupolev
Tu-154 aircraft, and re-opened services to Beirut International Airport in Beirut,
Lebanon. In 1999 the airline leased five Boeing 747-300 aircraft from Cathay
Pacific to replace its aging Boeing 747-200 aircraft.
On delivery of the first three Boeing 777s the airline introduced a new livery to
all of its fleet. On 6 December 2005, PIA leased an additional new Boeing 777
from the International Lease Finance Corporation (ILFC). The aircraft will have
the same specifications as the previous Boeing 777-200ER that PIA operates.
The aircraft is due to be delivered in January 2007 and will be on lease to the
airline for ten years with an option to purchase at the end of the term.
On March 26, 2007, Tariq Saeed Kirmani resigned after severe pressure from
higher authorities because of the EU ban, including disagreements with the
engineering department, as well as the poor findings for the July 2006 Fokker
crash investigation. Zafar Khan has been appointed as new Chairman of Pakistan
International Airlines; he was previously the chairman of Karachi Stock
Exchange. A team from the European Union is due to visit Karachi in July,
2007, to check the condition of the planes at the time and review the ban. PIA
has grounded 8 aircraft (5 A310's and 3 B747's) and is conducting maintenance
work on them to bring them according to the E.U standards. EU ban on PIA
airbuses may last till November, 2007. On July 4, 2007, the EU lifted the
restriction on eleven aircraft that PIA could fly into Europe of which five were
Boeing 747's and six Airbus A310s. The remaining fleet of similar aircraft will
be reviewed in September and October timeframe, when full removal of the
restriction will be considered
CURRENT FLEET:
RAO WAHEED Page 11 MAJU
The Pakistan International Airlines fleet consists of the following aircrafts:
For PIA's short haul fleet, the airline is deciding a replacement for its fleet of
Boeing 737. They will be replaced by either eight A320-200 or 737-800 aircraft.
PIA is also planning to buy 3 new ATR 72 which may be delivered after the
seven ATR 42-500 in 2007. Also, PIA earns a majority of profits from its cargo
division and hence PIA is also planning to buy 3 new A310-300F for cargo
operations to replace the Boeing 747-200 Combi.
INTRODUCTION:
• First airline from an Asian country and the first airline from a
Muslim country to fly the Super Constellation.
• First asian airline to operate a jet aircraft.
• First asian airline to be granted maintenance approval by the US
Federal Aviation Administration (FAA) and the Air Registration Board,
predecessor of the British Civil Aviation Authority (CAA).
• First non-communist airline to fly to the People's Republic of
China, and operate a service between Asia and Europe via Moscow.
• First airline in Asia to induct the new technology Boeing 737-300
aircraft.
• An IBM 1401, the first computer in Pakistan, was installed in PIA.
• The first airline to introduce a second route to People's Republic of
China over the mighty Karakoram mountains.
• First airline in the world to operate scheduled helicopter services.
• First airline to show in-flight movies on international routes.
• PIA set up Pakistan's first planetarium at Karachi.
• The first airline in the world to fly to Tashkent, capital of the newly
independent state of Uzbekistan.
• First airline in the world to start Air Safari with jet aircraft.
• First Asian airline to start flights to Oslo, the beautiful capital city
of Norway.
VISION OF PIA
VALUES:
Customer Expectations
Service
Innovation
Cohesiveness
Integrity
Reliability
Safety
SOCIAL SERVICES
o Boy Scouts Association
o PIA Planetariums
o PIA Horticulture
o Support for Non-Profit Organizations
MEDICAL SERVICES
o PIA Employee Health and Medical Services
INTERNATIONAL NETWORK
DOMESTIC NETWORK
PIA is a huge organization with many departments within which there are
many divisions / sections. Brief introductions of these departments are as
follows: -
1. ADMINISTRATION
• Security Division
• Legal Services Division.
• Public Affairs Divisions.
• Personnel Services.
• Human Resources.
• Industrial Relation (Employee Relation)
• Industrial Engineering.
• Organization Planning.
• Employment.
• Staff Development Section.
• Polices and Remuneration.
• PIA Training Center.
2. FLIGHT OPERATIONS
• Planning & Scheduling Division.
• Crew Scheduling.
• Crew Planning.
• Technical Division.
• The Central Control Division
• Flight Control Center.
• Flight Dispatch Center.
• Performance Evaluation.
• Technical Evaluation.
• Customer Relation.
• Funds Management.
• Revenue Accounting.
• Accounting
• Emolument / Payroll.
• Passenger Revenue (PAX).
• Cargo Revenue.
5. CORPORATE PLANNING.
6. MARKETING.
• Tour Promotion.
• Cargo Sales Division.
• Pax Market Planning.
• Schedule Planning.
• Pax Tariff.
• CRC Central Reservation Control.
• Pax Sales Division.
• Marketing Intelligence.
• Advertising.
• Awards Plus
7. FLIGHT SERVICES.
• Flight Service
• Catering Division.
• Traffic.
PIA SUBSIDIARIES
► PIA Subsidiaries are follows International
► Advertising (Pvt.) Ltd. PIA Hotels Ltd.
► (Dormant)
► PIA Holdings (Pvt.) Ltd.
ASSOCIATED COMPANIES
(OVERSEAS)
1
PIA Investment Ltd.
.
Minhal Incorporated Pakistan
2
ASSOCIATED COMPANIES
(PAKISTAN)
PIA NETWORK
Consist of continent 04
Countries 46
Cities served 88
Board of Directors
Management
Managing Director
Captain Mohammad Aijaz Haroon
Director - Marketing
Mr. Salah uddin
Finance is a field that studies and addresses the ways in which individuals,
businesses, and organizations raise, allocate, and use monetary resources over
time, taking into account the risks entailed in their projects. The activity of
finance is the application of a set of techniques that individuals and
organizations (entities) use to manage their financial affairs, particularly the
differences between income and expenditure and the risks of their
investments. An entity whose income exceeds its expenditure can lend or
invest the excess income. On the other hand, an entity whose income is less
than its expenditure can raise capital by borrowing or selling equity claims,
decreasing its expenses, or increasing its income. Finance is one of the most
important aspects of business management. Without proper financial
planning a enterprise is unlikely to be successful.
1. Revenue Accounting
a) Pax Revenue
b) Interline Revenue
c) Cargo Revenue
2. General Accounting
3. Funds Management
4. Budget Section
D-15
Monthly expenditure report is called D-15 which consist of Pay
vouchers with relevant supports, payment book listing all the
disbursements made at station during a specific month, disbursement
accounting summary, staff payments register, budget control register,
bank imprest reconciliation and bank statements.
D-15 Process:
• Station whether they are domestic or international do their
expenditures within the month and prepare pay voucher against the
payments of every expenditure.
• At the end of the month they compile the information regarding to
every pay voucher and prepare D-15 reports.
• Then all the stations of both domestic and international send these
reports along with pay vouchers to head office which then forward it to
disbursement section.
• These D-15 are received by disbursement and their entries are recorded
in register.
• Then these P/V’s are forwarded to concerned staff for checking
according to their assigned stations.
• The staff then check the pay vouchers according to the following rules:
• If still any point does not satisfy the concerned staff so further
communication is being carried forward through e-mail system.
• When the inquiry is completed then the PVs are send for binding for
making records.
RECONCILIATION
Reconciliation is the process of reconciling the stations both domestic
and international with the help of reconciliation statement. Every
station prepares their reconciliation statement every month and sends
this statement along with the bank statement to the Disbursement
section. Disbursement section has its own account which is IMPREST
27.
The statement includes two parts “PART A” and “PART B.” the first
part includes the opening balance of the current month then there is the
amount of funds transfer after that there is the amount of D-15 and
then the total of PART A, in PART B first of all the bank balance
whether debit or credit is written after that there is the total amount of
UPC (un presented cheques) after that the amount of unlinked debit
and credit if any is written and then the total of PART B comes which
is revolving fund closing balance.
The total of both PART A and PART B must be same then this total is
carry forward in the next month’s statement as a opening balance for
that month.
PROCESS OF RECONCILIATION
The reconciliation process starts after receiving the ledger and the
reconciliation statement of the respective station for the current month.
The ledger we get from the GENERAL ACCOUNTING section which is
prepared by the CRC section after getting the disk from the respective
station. After receiving the ledger and statement we perform following
steps:-
• First we check the list of funds transfer and the list of UPC.
• If there is any stale cheque which is not reversed we note the cheque #
and the amount then send e-mail to the concerned station about that
cheque.
• The amount of unlinked bank debit and credit is checked in the bank
statement and then an e-mail is sent to the station to provide the detail
if there is any unlinked bank debit or credit shown by the station in
the reconciliation statement.
• If in any month the whole amount of D-15 is not came than we make
provision for that month’s D-15.
• The JV’s of previous months which are still not reversed are carried
forward in doing reconciliation of the next month.
After performing all these steps correctly we get the same amount as
of the ledger closing balance.
TASK ACCOMPLISHMENT
• RAWALPINDI
• LONDON.
• NEWYORK
• TOKYO
• ISLAMABAD
• TORONTO
♦ Interline revenue
♦ Cargo revenue
♦ Pax Revenue
1) Domestic Counter
2) Domestic Counter Refund
3) Agent Sales
4) Agents Refund
5) International Counter Sales
6) International Counter Refunds
7) International Agents Sales
8) International Agents Refund
TCN
Sales Balancing
Pax Lift
General Refunds
Documents Control
Sales Report Control
Tax Unit
Reconciliation Unit
Credit Control Unit
PAX REVENUE
Through counter
Through agencies
Domestic sales unit is also a unit of Pax Revenue and it also performs
the same activities as International Sales Unit performs. Domestic
sales unit comprise of :
Domestic counter
Domestic agency
AGENCY SALES UNIT
Agency sales unit is the subunit of Pax Revenue and this unit includes
the sales from agents. This unit involves ASR that is Agency Sales
Report and these reports include the tickets sold through agents and it
gives the complete information of ticket fare, taxes, class and also
shows the commission charged by the agent.
TAX UNIT
This is the payment which PIA pays to government and civil aviation.
It is an impost for raising revenue for the general treasury which will
be used for general public purposes.
PAX LIFT
Pax lift is the sub unit of Pax Revenue. Its main purpose is create earn.
International and Domestic stations send utilize flight coupons on daily
basis to Head Office of Pakistan International Airlines (PIA).
REFUND
1) Revenue ticket
2) Army APW/ TAC
3) Student Applicant
4) Difference of Fares
5) Agent Refund
6) Bank Commission
RECONCILLIATION UNIT
DEBIT CREDIT
INCOME *****
EXPENSE *****
CASH *****
CASH CLEARANCE ACCOUNT *****
CREDIT CONTROL
PIA is an airline industry and it provides services but will receive the
revenue later this is where credit control unit comes. Services extend
on credit for which payment will be received at later point of time.
Credit is extended by the marketing people; a person who extends
credit is also liable for recovery.
CREDIT PRINCIPLE
INTERLINE REVENUE
The money is not directly transferred between the two airlines but
through IATA clearing house
Interline Receivable
Interline Payable
INTERLINE RECIEVEABLE:
Interline receivable means PIA will receive the amount of the services
delivered to the customers of other airline as they issue ticket of other
airline but travel on PIA.
INTERLINE PAYABLES:
PIA has to pay the other airline if its customer travel on other airline
for reaching its final destination and the account will be treated as
Accounts Payable.
Documents
Lifted PK documents
Summary of invoice
Rejection memo
CARGO REVENUE
Lift unit
Sales unit
Mail unit
Pricing unit
The main difference between lift and sales unit is that lift unit
comprises of earned revenue whereas sales unit composed of unearned
revenue.
LIFT UNIT
Lift unit comprises of earned revenue that the cargo is been loaded.
The basic document for cargo is airway bill. in lift unit comes the lifted
airway bill.
PIA cargo unit must get the domestic airway bill within 24 hours and
international airway bill with the next available flight.
The second step after checking is that online punching is done. there
are approximately 13 to 14 fields, all date on airway bill will be
punched online. this would be done till the end of month and at month
end reports will be generated.
SALES UNIT
Sales unit receive airway bills from different station. they have a
standard called COSSAP.
Types of report:
R-2: this shows report from counter. Include sold copies of airway bill
R-11: this includes agency report, shows full detail and gives net
revenue. at month end credit period will be given including all
remittances and airway bills on station. Finance manager will issue
a receipt to the agent.
MAIL UNIT
The mail unit is concerned only with the post office. Different stations
send CN38 (old name AV7) document. Here comes the airway bill
document. The steps in mail unit are as follow:
Control: In mail unit first is the control section that checks whether the
document from flight is correct or not.
Coding
Sector wise Segregation
Batch making
Online punching
Report from DPC
PRICING UNIT
The main function of pricing unit is to check whatever rates mentioned
on air bill are in accordance with the approval given by marketing
division of PIA or not. If there is any deviation in the rates means if
they are not in accordance with the approval than through the software
named FOXPRO the Cargo Pricing unit will follow up to the concern
station. For this deviation the concern station will give justifications, if
he fails to justify his act than the matter will be raised in front of higher
management but if he gives good reason for that deviation PIA pricing
unit will make adjustment on FOX PRO. The cargo commission is 5%.
ACCOUNTING
FUNCTIONS
WORKING:
The purpose of this account is to record the revenues which are being
generated by two major sources one is by the sale of tickets for the
online transportation of passengers and second source is interline
DISBURSEMENT ACCOUNT
It records the cash payments for meeting the expenses. Checks are
issued for the payment. On domestic stations this account is always
remained zero.
FIXED ASSETS
PIA has the fixed assets of Rs.37000 and above. The fixed assets
having value less than Rs.10, 000 do not charged depreciation. Straight-line
depreciation method is being followed here
PAYROLLS:
FUNCTION:
To provide salaries to the employees of P.I.A working either
domestically or internationally.
WORKING:
i) Domestic Payroll:
This payroll is for the employees in Pakistan, payment is done through
a local bank, e.g. Habib Bank, MCB.
v) Final settlement:
This is the document prepared for the employees who are separated from
P.I.A for any reason like death, retirement, Termination etc.
\
Funds Management
PIA Bank Accounts
Foreign Stations:
115 Bank Accounts in 41 countries dealing with 38 different banks
& around 30 different currencies.
Domestic Stations:
77 Bank Accounts in 33 cities.
Primarily dealing with 3 local banks .i.e. HBL ; NBP & UBL
Foreign Stations
Collection Accounts:
Disbursement Accounts:
Domestic Stations
(All accounts held at “NIL” balance overnight)
Collection Account:
Disbursement Account:
Bank Reconciliation
Transfer to Imprest
Transfer to Territories
Bank Charges
Interest received
R9 Summary
Bank Statements
BUDGET SECTION
WHAT IS BUDGET?
Budget (taken from French word “Bougette”) generally refers to a list of all
planned expenses and revenues. A budget is an important concept in
microeconomics, which uses a budget line to illustrate the trade-offs between
two or more goods. In other terms, a budget is an organizational plan stated
in monetary terms. Budget is used at various levels almost in whole world
mostly at personal level or family level or government and corporate level
also. For a corporation, the budget of a company is normally compiled
annually. A finished budget usually requires considerable effort and can be
seen as a financial plan for the new financial year. While traditionally the
Finance department compiles the company's budget, modern software allows
hundreds or even thousands of people in the various departments (operations,
human resources, IT etc) to contribute their expected revenues and expenses
to the final budget. If the actual numbers delivered through the financial year
turn out to be close to the budget, this will demonstrate that the company
understands their business and has been successfully driving it in the
direction they had planned. On the other hand, if the actuals diverge wildly
from the budget, this sends out an 'out of control' signal and the profits could
suffer as a result.
A budget is the first step in maximizing the power of your money. A well
developed budget is an important tool in your overall resources and
expenditures management plan. The good and sound budget would not only
help the organization keep track of its loans and debts, but it will also help
you keep track of its other monthly, quarterly and yearly expenses. A budget
can be as simple as it is powerful. The basic idea behind budgeting is to save
money up front for both known and unknown expenses. The major benefits
of budgeting are as follows:
BUDGETING PROCESS
Creating and closely following a carefully planned budget is an important
component of the future success. To construct an expense budget for an
organization or any department or any sub-section, you will need to estimate
the daily/monthly/annual costs of your needs. These costs include any type of
expenditure which can be revenue or long-term expense. In most large
Zero-Base Budgeting :
is a technique of planning and decision-making. It reverses the working
process of traditional budgeting. In traditional incremental budgeting,
departmental managers need to justify only increases over the previous year
budget. This means what has been already spent is automatically sanctioned.
In case of ZBB, no reference is made to the previous level of expenditure.
Every department function is reviewed comprehensively and all expenditures
rather than only increases are approved. ZBB is a technique, by which the
budget request has to be justified in complete detail by each division manager
starting from the Zero-base. The Zero-base is indifferent to whether the total
budget is increasing or decreasing.
SWOT ANALYSIS
STRENGTHS:
Define areas the company excels in: i.e.
Company’s Core Competency
Resource analysis
WEAKNESSES:
Evaluate the company’s liabilities i.e.
What could be improved at company and what should be avoided?
Poor quality or damaged reputation
OPPORTUNITIES:
Analyze company’s customers and market attractiveness i.e.
THREATS:
Check out what company’s competitors are doing and assess other potential
challenges i.e.
In order to analyze the strategic positioning of PIA and evaluate its strengths,
weaknesses, opportunities and threats (SWOT analysis), a number of sources
of information have been used:
This method ensures that balance of staff input and external analysis has been
used.
By conducting interviews with staff at different levels of the organization and
from different departments, the analysis provides insight into the different
attitudes and priorities that exist.
The first includes the strengths and weakness of the airline based on business
results-the measures of business (Profits, Seat factor, Yield, Market share).
The Second stage takes the Strengths and Weakness back from on paper
results to business and marketing issues that create the results in Stage one.
The third stage strips the strengths and weakness down to the root causes of
the airlines performance.
\
BUSINESS MEASURE ANALYSIS
Business measures look at the strength and weaknesses of the airline based
on business results-profitability, seat factor, yield market shares and other
performances measures.
STRENGHTS:
WEAKNESSES:
There are a number of business measures which show some areas of concern
in the airline’s performance:
• Financial Position
Whilst the gulf and central Asian routes record respectable yield, some
routes achieve less than respectable yield (North America for example)
and other between half and two-thirds (Europe, batik and Africa for
example).
Although Business Class and Economy plus Class are sometimes full,
the seat factor for revenue passengers is relatively low. However,
recently this issue is being addressed rigorously.
Owing to continuation of low seat factor and poor yield, certain routes
are running at significant losses and adding new sectors is not off-
setting the loss but rather having a multiplier effect.
BUSINESS AND MARKETING ISSUES:
Behind the “on paper” strengths and weaknesses, there are business and
marketing reasons for the results outlined above.
STRENGHTS:
• Ethnic Loyalty
• Flag Carrier
PIA earns a sense of loyalty and pride as the national airline for
Pakistan and hence leverages this strength to funnel in untapped
customer potential.
• Infrastructure
Base support and maintenance facilities reduce PIA’s dependency on
outside help for keeping its fleet in fly-worthy condition.
PIA has some of the world’s firsts up its sleeve and it’s been in the
commercial aviation business for good 48 years; this gives it an added
advantage / edge over its rivals.
• Reservation System
• Diversified Operations
WEAKNESSES:
• Weak Branding
PIA products i.e. routes do not a have a strong brand image. Business
Class in particular, suffers from lack of use by Executives. Business,
Club, Sohni to describe the service (Menus, Tickets, Check-in etc) and
First class labels are often used which do not yield positive or the
intended results.
Despite the “golden years” when PIA had a strong reputation in the
market for service, the length of time over which the level of service
has deteriorated has left PIA with a generally poor image. This will
take a considerable time to overcome.
Apart from the fleet plan, there is absence of planning at all levels of
the organization which leaves mangers without a sense of purpose and
there staff lacking a sense of achievement.
1. Over-staffing
2. Unethical Work Practices and Commission Culture
3. Fast Deteriorating Infrastructure and aging fleet
4. Politicized work environment leading to low morale
5. Marketing Arrogance – The notion that PIA is way to big for
any competitor to bring it down
6. Top Heavy Management
7. Inefficiencies in operational processes
8. Lack empowerment of employees and Zero Trust Culture
ROOT CAUSES
The third stage of stripping back the reasons behind ‘on paper’ results,
exposes the most basic strengths and weakness at the root of the issues facing
the airlines.
STRENGHTS:
• Dedication Of Many Staff
Although staff morale is generally low / poor and there are high levels
of frustrations, there are still a significant number of staff-members
that are genuinely committed and loyal to the company.
For staffers who remember “the good old days” or those who see the
potential, there is a great sense of willing the airline to succeed.
This core of strength in the people of the company could form the
foundations of its future prosperity. Providing these strengths are
suitably harnessed and channeled in the right fashion.
• Training Of Employees
For many staff, apart from the on-the-job-training the technical training
in some areas is also given. And for the newly hired employees
different criteria for training is set and followed. In this regard the PIA
Training Centre (PTC) plays a very important role. The training to
existing employees is given to prompt their skills and abilities and to
newly hired employees for training them according to the requirements
of the jobs for which have been hired.
WEAKNESSES:
• Departmentalization
OPPORTUNITIES:
• Fleet replacement
• Tourism in Pakistan
THREATS:
The external factors that my pose a threat to the future progress of the airlines
have been carefully considered. These areas could have a significant impact
on the airline’s profitability, particularly those relative to revenue and cost.
• Political instability
Air travel remains a large and growing industry. From a global perspective,
the airline industry is making strides towards its goal of sustainable
profitability, partly by improving the efficiency of business operations, but
also by encouraging the public to return to the skies with a more desirable
travel experience. Worldwide, IATA, International Air Transport
Association, forecasts international air travel to grow by an average 6.6% a
year to the end of the decade and over 5% a year from 2000 to 2010. But, the
most dynamic growth is centered on the Asia/Pacific region, where fast-
growing trade and investment are coupled with rising domestic prosperity.
Air travel for the region has been rising by up to 9% a year and is forecast to
continue to grow rapidly. Yet there are undoubtedly problems that still need
to be addressed if the gap is to be bridged. Twenty-nine percent of airlines in
the region are still 100% paper tickets, despite a campaign spearheaded by
IATA to convert the industry to 100% e-tickets by the end of 2007.
To ensure safe and efficient civil aviation operations in Pakistan, the country
facilitates operations in the domestic & the international market of the safest
standards in conformity with ICAO standards by an optimum number of
airlines to encourage competition without dissipating the market. In Pakistan
the aviation industry is managed by the Civil Aviation Authority. There are
42 airports in the country being managed by Civil Aviation Authority
(CAA).Out of these, 5 airports viz Lahore, Karachi, Islamabad, Peshawar and
Quetta are international airports. The other main airlines operating in
Pakistan except PIA are Aero Asia International, Air Blue, Shaheen Air
International.
1. PIA considers its human resources as the only asset that appreciates
with the passage of time.
3. One of the main weaknesses of the department is that the set rules and
regulations are not being followed in the true spirit which can cause
great problems in the future.
The survey of the employees’ perception about PIA was also conducted to
make our research more practical-based on real figures. Thus, we have
conducted our survey through Sampling. We have collected data from 50
employees only. Thus, our results are generalized for all on basis of our
sample comprising of 50 employees working in Pakistan International
Airlines (PIA). There were 39 males and 7 females among our 50 member
sample and 4 people didn’t mention their gender. Some other interesting facts
revealed from questionnaire based survey are following:
• Only 28% of the employees believe that there are open lines of
communication among the superiors and subordinates of PIA.
• 20% of the total population agrees that PIA training center is fulfilling
its role in providing the quality training to the employees working in
PIA.
HR Department
20
Responses
15
10
5
0
NO YES TO SOME
Options EXTENT
International Standards
30
25
Responses
20
15
10
5
0
NO YES TO SOME NO
Options EXTENT RESPONSE
• Majority of the people in PIA showed their satisfaction towards the
overall package offered to them at PIA.
• According to the survey in PIA majority of the people i.e. 58% of the
total sample population prefers the overall package as their
motivational force while 16% of the total sample voted for promotion,
10% for increment in salary, and 2% for the delegated authority.
While, 4% did not respond to this question.
BIBLIOGRAPHY
• http://www.piac.com.pk/
• http://www.ptc.piac.com.pk/
• http://www.piac.com.pk/fleet/fleet.asp
• http://www.airindia.com/
• http://www.emirates.com/
• http://www.emirates.com/pk/
• http://www.britishairways.com/travel/globalgateway.jsp/global/public/
en_
• http://en.wikipedia.org/wiki/Encyclopedia