Key points
- Affordable fares key to boosting passenger numbers
- Fleet expansion and foreign technical partner planned
- UK, North America routes seen as growth drivers
KARACHI: Pakistan’s newly privatised national airline, Pakistan International Airlines (PIA), is planning to expand its flight operations to the Gulf Cooperation Council (GCC) region as part of a post-privatisation strategy aimed at achieving annual revenue growth of 7.5%, its new owner said this week.
A Pakistani consortium led by the Arif Habib Group acquired a 75% stake in PIA for Rs135 billion ($482 million) on December 23 following a competitive bidding process, valuing the airline at Rs180 billion ($643 million), reports Arab News.
The transaction represents Pakistan’s most ambitious attempt in decades to overhaul the debt-laden carrier, which has amassed losses exceeding Rs784 billion ($2.8 billion). The government said the sale was intended to end years of state-funded bailouts and support the airline’s recovery.
In an exclusive interview with Arab News, Arif Habib, chairman of the Arif Habib Group, said he hopes to attract around 70 million Pakistanis who travel each year on various airlines by offering more affordable airfares.
“That [GCC region] is our biggest market… We would definitely try to increase the frequency of flights, increase the number of planes there, and try to capture more market share in that area,” Habib told Arab News on Monday.
“So, there we see a lot of opportunity.”
New management of PIA
The new management of PIA, which currently caters to 4 million passengers annually, aims to target religious tourism, which Habib called a “captive market” in Pakistan and the Middle East.
Habib plans to invest around Rs112 billion ($400 million) in PIA to turn the airline around, implementing short- and long-term improvements ranging from upgrading seats to tripling the 19-aircraft fleet, and engaging a foreign airline as a technical partner through strategic divestment over the next seven to eight years.
The group also intends to reduce PIA fares to make air travel more affordable for passengers from Pakistan’s low-income groups.
“Yes, we have been advised that to increase our market share, we will have to rationalize the airfares,” Habib said. “That is in the plan, and we will unfold it as it comes.”
The new owners have engaged a global advisory firm, Seabury Aviation Partners, to identify viable markets for the newly privatized airline and expand its presence both locally and internationally.
Habib aims for up to 7.5% annual growth in PIA’s operational revenues to make it profitable and the new management is targeting European and North American markets, particularly routes to and from the United Kingdom, the United States and Canada, for this purpose.
“The UK is the most lucrative market where I think there is a lot of demand,” he said, adding they would also be seeking more flight destinations. “Even for the USA, there is demand there.”
On Tuesday, PIA announced that the airline will be expanding its UK operations and will operate four weekly flights from Islamabad to London starting Mar. 29.
“The flights are being resumed after a long gap of six years,” PIA spokesman Khan said in a statement. “PIA is already operating three weekly flights to Manchester.”
