PIA revenue increases by 11% - to acquire more 777s on lease

[Abbas Ali]

Airline negotiating to acquire more Boeing 777s on lease

KARACHI, April 3 (APP): National carrier PIA achieved a revenue of Rs. 64.07 billion, indicating an increase of Rs.6.2 billion in 2005 over 2004, showing a growth of 11%.

This was achieved despite intense competition faced by the airline from private domestic carriers in Pakistan as well as foreign carriers, a meting of the PIA Board of Directors, held at PIA Head Office, was informed Monday.

The meeting, chaired by Chairman and CEO, Tariq Kirmani, approved the audited accounts and reviewed the performance for FY 2005.

The airline, like the entire aviation industry, was adversely affected by unprecedented rise in fuel prices.

For PIA, the fuel bill increased from Rs. 17.9 billion in 2004 to Rs. 26.5 billion in 2005 reflecting a rise of 47% with impact of price increase alone being at Rs. 7.8 billion.

The airline, however, was able to restrict the increase in all other operating costs (other than fuel) to 5.7% as against the inflation rate of around 10%.

All key performance indicators relating to the aviation industry namely, yield, market share, seat factor, number of passengers, aircraft utilization, services standards and share value showed significant improvement during 2005 over FY 2004.

In 2005, PIA carried 3.2 million International passengers capturing a market share of 49% and 2.2 million in the domestic area achieving 65% share.

Seat Factor on scheduled services was 73.1% in 2005 as against 69.1% in 2004. Both domestic and international seat factors recorded increase. Passenger and freight yields have also recorded improvement over 2004.

Fleet utilization was higher than last year and even better than the industry average.

PIA had the highest flight punctuality in the last 26 years which stood at 87% in 2005. More encouraging was unprecedented PIA flight regularity recorded at 98.2% in 2005.

This showed that all scheduled flights flew regularly without being canceled and the cancellation percentage was less then 2% while 87% of these flights flew on time.

In 2005 a high strategic priority in the Corporate Planning area was assigned to reduce the overall fleet age from existing 21 years to less than nine years in the current Business Plan tenure.

PIA currently has a fleet size of 41 aircraft with the planned inclusion of 29 new aircraft by 2011.

PIA fleet size will increase to 52 aircrafts after some old aircraft are retired or disposed off. Out of 29 new aircraft, will also include seven new ATR-42-500 turbo props besides twelve 777 LRs and ERs which are already in the process of acquisition.

Three ERs and two LRs have already arrived, and three more are scheduled to arrive and negotiations to acquire four more on lease is underway.

The reorganizing of PIA’s Marketing Department contributed immensely to the overall functional efficiency and performance indicators of the airline.

The Marketing Department was restructured into four income streams namely passenger, cargo, group tours and charters and other business, which includes the newly activated SpeedEX, PIA’s Courier Service.

In 2004, the average number of comment cards received was around 200 per week, of which complaints averaged 42 percent.

In 2005, with customer involvement and new methods of their engagement on board, they have responded with a feedback of averaging 2000 comment cards per week, of which the complaints fell down to 19 percent.

This amply proves and is a sure indicator of the fact that the strategy and policies of PIA are on the right path to recovery and its positioning as a world-class airline.

Recently, PIA acquired the IOSA certification for all the operational areas and became one of 60 world airlines to achieve this feat.

Similarly Engineering and Maintenance had successfully acquired EASA Certification after a detailed audit conducted by relevant agencies. This enhances cost and functional efficiency, together with enhanced growth and improved competitiveness of the airline.

The meeting was attended by Kamal Afsar, Syed Muhammad Fazal Agha, Nawid Ahsan , Maj. Gen. ® Muhammad Ashraf Chaudhry, Dr. Sughra Junejo, M.H.K Khaishgi, Asad Ali Khan and Javed Saifullah Khan.

Source: Associated Press of Pakistan

[Amaad Lone]

Looks like the four additional 777 to be aquired on lease will partially replace the 747s from 2008.

Also is PIA getting the three 300ERs earlier then planned?

Currently in Rome, traveled on Qatar Airways. Amazing A330 from Lahore to Doha, great onboard entertainment system. Took some nice pics at Doha, where by the way photography is not allowed, so some quickies, but they came out nice. will email them to abbas to post. From Doha to Rome was A300, which seemed ancient when compared to the brandnew A330.

PIA needs to return the leased A310s to Airbus, and buy some new A330s for the European and Far East routes.