Bilateral air service: Fly Jinnah yet to meet all requirements of agreement: CAA

ISLAMABAD: Fly Jinnah, a joint venture of The Lakson Group and Air Arabia, has yet to meet all requirements of a bilateral air service agreement, including a certificate of operation.

This was revealed by the spokesperson Civil Aviation Authority (CAA) to this correspondent.

National Aviation Policy (NAP) 2019 stipulates that “to promote local participation in the aviation sector, airlines will be encouraged to be owned by Pakistani nationals. Foreign equity partnership in domestic commercial air transport carriers shall not exceed 49 percent or to the extent where controlling interest remains in local hands…However, foreign direct investment and joint ventures will also be permitted.”

Fly Jinnah: Pakistan's Lakson Group, Air Arabia to start a new low-cost airline

When asked about the exact percentage of Lakson group ownership in the joint venture as one requirement is that the airline is ‘substantially owned and effectively controlled’ by local interest the CAA spokesperson stated that Lakson Group will have the controlling stake but refused to divulge the exact percentage as he said it is ‘classified’ information.

The spokesperson further said the airline is still in the process of clearing the requirements to get the certificate of operation, thus it is too soon to tell when operations will actually commence.

Abdullah Hafeez Khan, PIA spokesperson, while talking to Business Recorder said the request for the foreign carrier to get more frequencies in Pakistan was illegal and against the NAP 2019, which required reciprocity and organic market growth to permit increase in capacity.

Elaborating, he stated that countries like the UAE or Turkey could only offer one or two stops while Pakistan with a large geographical area and population could offer several domestic stops.

The objective of the NAP Policy is to provide level playing field to all national operators to enable them to grow and compete successfully in both domestic and international markets by ensuring commercial reciprocity based on organic growth. The PIA spokesperson maintained that the NAP 2019 was formulated by the government and the regulator and they must uphold it in letter and spirit.

While talking about the impact of the foreign carrier’s entry in the domestic market, he said it would not impact on PIA much as the domestic network is not more than 20 per cent of overall revenue, while adding that this carrier would just operate on three sectors (mostly between Karachi, Lahore and Islamabad).

He further contended that “such compromises account for Pakistan aviation being in such bad shape, despite being one of the bigger markets.”

Copyright Business Recorder, 2022