Increased competition on horizon, as five new airlines to enter Pakistan

Multan's air traffic has grown five-fold after the initiation of open-skies policy

KARACHI: Pakistan is set for entry of five new airlines, Afeef Zara, Askari Air, Air Sial, Go Green and Liberty Air in the next one year as competition increases in wake of increased demand.

At a recent ceremony marking launch of Emirates Standard Chartered Credit Card, the banks Chief Executive Officer Shahzad Dada said air traffic had surged over 40 percent in the last five years, touching 20 million passengers, reported Express Tribune.

The International Air Transport Association (IATA) forecast current rate of growth in Pakistan’s aviation sector could touch 9 percent per annum which could continue till 2020. According to former additional director, Civil Aviation Authority (CAA) Muhammad Afsar Malik stated these numbers highlighted the open skies policy had proved beneficial for Pakistan and its populace.

All these airlines are vying for far-off and lucrative routes like Gwadar, Panjgur, Khuzdar, Dalbandin, Parachinar, Muzaffarabad, Bannu, Turbat, Skardu and Chitral. From these routes places like Gwadar, Gilgit-Baltistan and Turbat provided lucrative profit opportunities due to work being carried under China-Pakistan Economic Corridor (CPEC).

Ex-CAA additional director Mr. Malik stated Pakistan’s domestic air traffic had risen 10 percent, which is 6 percentage points higher compared to 4 percent rise in international air traffic. Pakistan’s markets size is growing, but domestic airlines share is falling as it flew 42 percent of passengers in FY 2016-17 compared against 58 percent flown by international airlines.

Mr. Malik added airlines were reducing fares to attract customers due to increased competition in the sector, and it was a result of the open-skies policy otherwise ticket prices would have been Rs30,000 instead of Rs10,000.

But PIA’s spokesman believed on the contrary and in an emailed response stated private and foreign airlines were focusing on price cuts instead of providing more customer satisfaction.

Shaheen Air spokesman in a separate email said airlines moving passengers from one destination to another were struggling to break-even and advised the government to revisit its open skies policy as global carriers are permitted to enter without any restriction.

He added a new policy should be devised by the government called fair skies policy whereby domestic and foreign carriers get a fair stake of the market share.

However, Malik defended the open skies policy, highlighting this policy was in place globally and gave example of Europe which opened up its aviation market in 1978 and reaped its benefits. For example, Multan thanks to the open skies policy has seen a surge in traffic of five times.

 

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