Damaging Open Sky Policy | PIA Seeks Govt. Help in Price War
KARACHI: Mr. Bernd Hildenbrand, CEO Pakistan International Airlines (PIA) is calling for help from the government in fighting a price war with revenue wise very strong Gulf airlines; including putting restrictions on the number of flights, they can operate in its home market, Pakistan, indirectly asking the government to revisit its Open Sky policy.
He said that the majority state-owned airline is losing about 3.1 billion rupees ($30 million) per month while market share continues to rise for the likes of Emirates Airlines and its Abu Dhabibased neighbour Etihad Airlines, attracted by the potential growth in demand in a nation of nearly 200 million people.
“For us it is very difficult to compete with the emirates,” Hildenbrand said, conceding that the Middle Eastern-carriers offered better and cheaper services, whereas PIA is struggling to modernise its 35-plane fleet due to a lack of funds.
PIA therefore needs help from the government, including possibly putting “some limitations on the open-sky policy”, he said, alluding to Pakistan’s aviation service agreements with other countries.
In comparison he said the bilateral trade agreements of some other countries and blocs were more restrictive, citing Canada, which has limited the number of flights for Etihad and Emirates. “Even European countries don’t open up completely,” he added. “I am not against competition, but unlimited competition is also not possible.”
Hildenbrand said PIA’s total debt stood at 186 billion rupees ($1.8 billion) at the end of 2016 and has appealed to the authorities to help nurse the airline back to profitability. However, it would take at least three years to return the company to profitability and to truly transform PIA’s fortunes would take even longer. “What went wrong in 25 years you don’t change in half a year. Impossible,” he said.
