Steps PIA can take to get back on the track

Pakistan International Airlines (PIA) once the shining star of the aviation industry has now become the ‘sick man of the aviation industry’. It has been struggling to compete effectively with other airlines in the market.

PIA’s Air Traffic Share Drops

PIA’s revenue has been declining as more airlines have commenced their operations to Pakistan. The international passenger traffic market share of Pakistan International Airlines (PIA), which was 39% in 2011-12, dropped to 28% in 2015.

PIA Terminates Flights

Due to this drop in air share PIA had to stop flights to many major international destinations due to insufficient demand.These include Frankfurt, Amsterdam, Glasgow, Leeds Bradford, Chicago, New York, and the list goes on. PIA was facing heavy losses on all these routes.

What can PIA do for its Revival?

If PIA wants to succeed, start making the profit and re-establish its position in the market, it needs a huge overhaul of its current point-to-point operation models and moves towards the more feasible hub-and-spoke model.

Benefits of the Hub-and-Spoke Model

The model allows airlines to provide more flights to passengers. It also has less number of routes connecting all spokes and it also enables a more efficient use of air cargo transportation resources. PIA is a mid-range service airline with multiple hubs serving more than 50 domestic and international destinations.

It has a fleet of 33 airplanes having an average age of 10.93 years. It is currently operating on the point-to-point operating model. However, some of the PIA flights are scheduled with the hub & spoke system as well.

What is the Hub-and-Spoke Model?

In order to understand what hub-and-spoke operating model is, we need to understand the current operating model, the point to point model. A point to point operating model is based on direct flying operations between connecting cities. This model is although very comfortable for the customer but is very costly for the airline. It also requires a very solid demand before the route can be undertaken.

In the hub-and-spoke model, a hub is a central airport through which airline operates its flights and spoke are the routes that planes from smaller cities are flown to a large airport. From there, a large aircraft takes them to the common destination for these passengers.

PIA’s Eight International Stations in Pakistan

PIA has eight international stations in the country. These include Karachi, Lahore, Islamabad, Peshawar, Sialkot, Multan, Faisalabad, and Quetta.If we consider that the New Islamabad International Airport becomes the operational hub for PIA, it would make a lot of sense since Islamabad station already covers more than 40% of PIA operations.