Open skies policy damaging PIA

The National Aviation Policy 2015’s continuation of the open skies policy adopted in 1992 is likely to hit the National Carrier (PIA) hard as its total international destinations have been reduced to 30 from 60 since the adoption of this policy.
The national aviation policy disclosed that the international passenger traffic from Pakistan has registered a 20% increase in the past four years (5% average growth per annum) but it ignored that the share of growth of the local airlines has been steeply negative.
‘This is happening due to the open sky policy that was first introduced in Pakistan in 1992. At that time, PIA had 42 aircrafts and over 60 international routes. Since the introduction of the open sky policy, foreign airlines gained access to Pakistan and started expanding their operations following the lead of PIA,’ said former deputy managing director (DMD) PIA, Khursheed Anwar.
PIA operates with only 18 operational aircrafts and flies to a mere less than 30 international destinations. ‘Routes and networks are considered to be the main strategic asset of any commercial airline. Countries through their policies and practices strive to protect and safeguard the commercial interests of their airlines,’ added the expert.
The criticism of open sky policies is not just a local affair; it in fact is one the most heated issues across the world where the airlines of even the most developed countries are objecting to it. US Pilots Association has initiated a campaign to restrict some foreign airlines in the US as they feel these airlines have introduced unfair competition and posed threats to jobs and long-term viability of US airline industry.
The National Aviation Policy defends the approach of open skies, though the same is now being challenged by its pioneers (the US and European carriers). In the policy, the reason for growth in traffic in the leading emerging economies of the world including China, Korea, India and Malaysia is wrongly attributed to the policy of open skies and liberalization, the expert added.
The non-native airlines are offering relatively cheap fares; they are carrying Pakistani passengers from their (foreign airlines’) airports to various destinations, especially to Europe and USA. ‘Pakistani airlines are therefore progressively losing their market share,’ said an Aviation expert.
According to an estimate, over $500 million business can be diverted to Pakistani airlines only if the service agreements of the foreign airlines are reviewed and rationalized, said the expert.
Furthermore, he added, a brotherly Muslim country’s airline has started carrying more and more passengers from Pakistan to USA, UK and other countries. ‘Even most developed countries, including USA, Japan and the UK who claim to be champions of liberalization and deregulation ensure protection to the commercial interests of their airlines. ‘For example, PIA since long has been trying to get traffic rights from London to East Coast of USA or from Tokyo to West Coast of USA, and the aviation authorities for both routes have continually declined several requests made by PIA,’ reasoned the expert.
While Pakistani airlines are not getting any help, some foreign airlines are getting massive subsides of billions of dollars from their respective governments, he said, adding that as per the fundamental principle of reciprocity and bilateralism, the frequency and capacity of flights between any two countries is always based upon the potential flow of genuine traffic between the respective countries.
PIA General Manager Public Relations Amir Memon said that in the era of open market economy, a conservative aviation policy would only alienate the country and damage revenues. He said that PIA’s market edge is its direct flights which are not being challenged by these non-native airlines carrying local passengers. He also mentioned that PIA is procuring more aircrafts as two A320’s would be added to the fleet in the next couple of months while four more aircrafts would be added to the fleet by the end of the year. This would further allow the national carrier to benefit from the policy instead of being a victim of it.