Pakistan is reluctant to expand the bilateral air agreements with Central Asian States, and South Asian, Far Eastern and Middle Eastern countries. Source in the Ministry of Defence told Business Recorder here that Pakistan has not so far responded to the offers made by the Central Asian States (CAS), Sri Lanka, Thailand, Hong Kong, Malaysia, UAE, and Qatar to expand the existing bilateral framework on reciprocal basis. A cursory study of Pakistan's 'open skies' policy makes some interesting reading.
In 1992, Pakistan unilaterally declared Karachi airport as 'open skies', which meant that all foreign airlines, irrespective of their nationality or Air Services Agreements (ASA), were free to operate with as many frequencies as they could.
The purpose of this policy was to make Karachi airport a hub, just like Dubai airport. But this policy was withdrawn within one year of its implementation, obviously to save the national carrier, Pakistan International Airlines, from fierce competition.
Subsequently, it was underlined in Pakistan's 'open skies' policy of 2000 that unlimited open skies policy would not be maintained for the time being. However, 'selective' open skies policy would be implemented by having agreements on the principle of reciprocity and bilateralism with maximum number of countries.
PIA has always remained government's 'sacred cow'. Throughout past over five decades it has been protected and pampered to ensure that it comes of age. But the life saving drugs injected into the national carrier have yet to produce the desired results.
One of the maladies that have undermined the progress of the national carrier is the appallingly uncalled for bureaucratic and political interference in its day-to-day working. Unless it is allowed to run on purely commercial lines, the airline will continue to limp and remain a burden on national exchequer. The extent of interference could be gauged from the fact that during the past political governments blank appointment letters had been demanded by Prime Minister's Secretariat where names were filled in to oblige their supporters.
Experience shows that every new inductee who is given the reins to pull the airline out of the morass, howsoever clean and brilliant record he may be holding, finds himself in a whirlpool of intrigues and problems, not easy to overcome and demolish.
The new PIA Chairman, Tariq Kirmani, has come with an unblemished career record, apparently with something new up his sleeve. His well-wishers would keep their fingers crossed and pray that he produces the best in him to run the airline on commercial lines, resisting pressures all the way.
Presenting the open skies policy of the government as a handicap in the way of PIA's progress would not do any good. A case in point here is the unilateral open skies policy and its impact on Dubai.
It is well known that Dubai follows unilateral open skies policy and consequently there are more than 110 airlines operating at Dubai in competition with Emirates Airlines on all international routes. Yet the Emirates Airlines is able to carry about 58 percent of the total traffic (18 million in 2003-04) to/from Dubai airport. The traffic at Dubai airport is growing at the rate of about 20 percent per annum.
And, the annual revenue earned by aviation industry at Dubai airport and its affiliates ie hotel industry, fuel companies, duty-free shops and local transport etc, is in excess of $15 billion.
In Pakistan, PIA competes with 20 foreign and two Pakistani private airlines on all international routes, originating from Pakistan. PIA's share of international traffic is about 50 percent, Aero Asia about four percent and Shaheen International Airways three percent. Total annual international traffic is about 5.6 million passengers (2003-04).
Indian national carriers are competing with 60 foreign airlines and carrying about 40 percent of total annual international traffic of 14.5 million passengers (2003-2004).
Indian private airline, Jet Airways, has been permitted to compete with Air India and foreign airlines on UK and USA routes. Air Sahara and Air Deccan have also been permitted to compete on international routes at regional level. India has scores of scheduled and charter airlines operating in the country. Minimum five aircraft are required for an airline in India to commence operations.
Pakistan signed open skies with select countries like USA (1996), Switzerland (1998), Sweden (1999), Denmark (1999), Norway (1999) and UK (2000). It also signed open skies agreement, to the extent of Karachi only, with UAE (Dubai) and Singapore in 1998.
However, Pakistan took a U-turn in 2002 and attempted to undo bilateral air services agreements with seven countries whose designated airlines PIA could not compete with. These countries included UAE, Oman, Bahrain, Kuwait, Thailand and Singapore.
Singapore Airlines was driven out by PIA with the help of ASF in 2002 and talks could not be finalised with Singapore until now. Similarly, talks with Thailand and Oman were unsuccessful. Three rounds of talks were held with Qatar but without desired success. Qatar Airways will continue operating 13 weekly flights to four points in Pakistan, but will not carry more than 2400 passengers per week.
Talks with Bahrain and Kuwait were successful but Pakistan ended up giving more than what was already available to it. We are reluctant to hold talks with UAE.
India has permitted, on reciprocal basis, the designated airlines of all the 10 Asean countries to seven weekly flights each to four metros ie Bombay, Delhi, Calcutta and Chennai.
India has granted Gulf Air owning states, on reciprocal basis, a combined capacity 13,686 seats per week for operations of Gulf Air between Gulf countries (Oman, UAE and Bahrain) and six points in India. Additionally, the designed airlines of Oman can operate 3,774 seats per week between Oman and points in India. Total weekly seats: 17,460.
Pakistan has granted Gulf Air owning states, on reciprocal basis, a combined capacity of 3,200 seats (about 13 frequencies) per week for operations of Gulf Air between Gulf countries (Oman, UAE and Bahrain) and Karachi. Additionally, Pakistan has granted, on reciprocal basis, the designated airlines of Oman seven weekly frequencies (about 1700 seats) to northern gateways and four frequencies (about 1000 seats) to Karachi. The designated airlines of UAE (excluding Dubai) have also been permitted, on reciprocal basis, nine weekly frequencies (about 2100 seats) between Abu Dhabi and northern gateways, total weekly seats being about 8,000.
Aviation circles feel that interests of users would be best served if airlines are free to operate air services in competition with one another according to their commercial judgement. To this end, it is believed that long-term interests of users would be best served by full liberalisation of international aviation markets, involving the removal of all bilateral restrictions so that the airline industry could compete on the same footing as other industries.
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