Causes of Management Failure Of Pakistan International Airline.

2. GROUP MEMBERS
• Rida Muneer
• Iqra Hafeez
• Atifa Asghar
• Hafiza Bushra Khushi
• Ayesha Imtiaz

3. MANAGEMENT
FAILURE CASE

4. PAKISTAN
INERNATIONAL
AIRLINES
GREAT PEOPLE TO FLY WITH

6. CONTENTS
• History
• Introduction
• Facilities
• Downfall of PIA
• Financial Performance
• Problems
• Failure
• Causes
• Suggestions

7. HISTORY

8. HISTORY
• New airline ‘Orient Airways', was registered in Calcutta on
23 October 1946 by MR.Isphahani.
• On 11 March 1955, Orient Airways merged with the
government's proposed airline, becoming Pakistan
International Airlines Corporation.

9. INTRODUCTION

10. 1960’s
• In March 1960 , becoming the first Asian airline to induct a
jet-aircraft in its fleet.
• In same year, made a world record for the Speed over a
commercial airline service for powered landplanes of
938.78 km/h, a record which still holds to this day.
• In 1964, becoming the first airline of a non-communist
country flying to the People's Republic of China.

11. 1970’s
• In 1974, PIA launched Pakistan International Cargo,
offering air freight and cargo services.

12. 1980’s
• In 1984, the airline introduced Night-Coach service as a low-
cost alternative to day-time domestic flights.
• In mid-1980s, PIA also helped establish Emirates by leasing
two of its airplanes - Airbus A300 and Boeing 737 - as well
as providing technical and administrative assistance to the
new carrier.

13. 1990’s
• Farooq Umar handed over PIA to another MD March 1996
closing his tenure with great success and leaving PIA
profitable with last 6 months profit of more than 55 million
PKR. after his departure PIA started to nose dive.

14. SERVICES

15. SERVICES
Domestic
(Better performances)
International
(FACING SEVERE COMPETITION)

16. DOWNFALL OF PIA

17. DOWNFALL OF PIA
• Terrible service,
• Long delayed flights,
• Emergency crash landings,
• Cancellation of flights,
• Shortage of planes,
• Unclean toilets and
• Non-serious attitude of the administration

18. FINANCIAL
PERFORMANCE

19. FINANCIAL DOWNFALL
Year Revenues (PKR in Million) Profit/(Loss) (PKR in Million)
2014 Q1 28,000 (1,980)
2013 95,771 (44,531)
2012 112,130 (33,180)
2011 116,551 (26,767)
2010 107,532 (20,785)
2009 94,564 (5,822)
2008 88,863 (36,139)
2007 70,481 (13,399)
2006 70,587 (12,763)
2005 64,074 (4,412)
2004 57,788 2,307

20. PROBLEMS

21. PROBLEMS PIA FACING
• Nepotism
• Corruption
• Poor maintainence
• Global economic depression,
• Rising fuel costs,
• Stiff competition,
• Massive labour costs
• Recruitment of skilled staff
• Airline financing
• The poor image of Pakistan negatively affecting its ability to
attract passengers from other countries.

22. CONTINUED.
• It’s ironic when an airline cannot upload an accurate
destination map.
• Maintenance of PIA aircraft
• Landing gear to catch fire due to friction.
• Overstaffing,
• Devaluation of local currency,
• Suffered loss of 119 billion rupees from 2005-till now

23. FAILURE

24. FAILURES
• PIA is functioning with costs higher than returns.
• Un-skilled staff
• Increasing frequency of emergency landing
• Grounding planes (in 2011 Dec, 18 planes were grounded)
• Gap in engineering standards (Delayed induction of engineers
and technician, while serving personnel have retired or
migrated,
• Dearth of stand-by planes, causing flight delays
• Technical problem (e.g. hydraulics failure)
• Fuel leakage
• Poor environment for passengers.

25. CAUSES

26. CAUSES
• Overlooking the incidents
• Substandard raw material
• Substandard spare parts
• Political and personal preferences
• Civil Aviation Authority failure
• CAA also fails to perform its basic function of clearing runways
• Poor performance and
• Corruption is the major cause of its failure.
• Lack of experience relating to aviation industry for top management.
• Less technology advanced
• Lack of training facilities
• No proper and frequent advertisement.

27. SUGGESTIONS

28. WHAT SHOULD PIA DO?
1.
• Immediate Steps
2. • Short Term Measures
3.
• Long Term Measures
4.
• Managerial Work
5.
• Maintenance Improvement

29. IMMEDIATE STEPS
 LAHORE, Oct 11 2013: The Joint Action Committee of Pakistan
International Airlines Employees (JACPIAE) has suggested short-and
long-term measures to Prime Minister Nawaz Sharif to make it
profitable again, requesting him to drop the idea of its privatization as
it is no solution to the problem.
 Aircraft B-777 should be operated on long routes. This aircraft is
basically designed for a minimum of 7 and a 1/2 hrs per landing to be
able to retain its operational life for long period. Its operation to
destinations like Karachi, Lahore, Islamabad and Middle East
countries is surly a losing proposition.
 The letter said in view of high fuel costs no airline could make profit
solely on passengers alone. Therefore, freight service must be
introduced. At least for a period of five years, custom duty on aircraft
spare parts, levy of 24 per cent sales tax, 16 per cent additional sales
tax and five per cent income tax should not be applied.

30. SHORT TERM MEASURES
• While purchasing/leasing short route/fuel efficient aircraft similarity of
equipment corresponding to present technical infrastructure must remain
as a prime factor to avoid loss of precious foreign exchange by sending
the equipment for overhaul/repair abroad.
• Technical ground support equipment should be upgraded to assure on
time safe aircraft departures.
• To revive the EASA-145 approval necessary funds be provided to the
engineering department to rectify the discrepancies and upgrade the
technical infrastructure.
• Isphahani Hangar Facilities should be upgraded to match international
requirements. “Even drinking water is not available there

31. • Maintenance Repair Overhaul (MRO) required facilities should be
created to boost revenue. In this connection jet hangar be upgraded to
cater to outside party aircraft.
• Currently, small engines of privately owned aircraft are being sent
abroad for overhaul. A facility for this purpose can be created with a
low cost. Once it is created and approved, the government should ban
such engines to be sent abroad since the facility will be available in
Pakistan.
• A separate hangar be constructed and equipped to handle outside
party aircrafts.
• The employees further say the PIA is blessed with highly qualified
and experienced professionals (except those who sneaked through the
back door due to favoritism/nepotism).
LONG TERM MEASURES

32. MANAGERIAL WORK
• Exemplary leadership,
• Qualified and merit based staff and
• Technically strong administration to improve its performance
and save it from the clutches of the wolves.
• It has to overpower its weaknesses
• The average ratio of staff should not exceed 100 per aircraft
while PIA enjoys more than 400 employees per aircraft.
• It needs some hard decisions by the administration to run the
system smoothly.
• Pakistan International Airlines should give primary importance
to the safety of the passengers and make efforts to avoid any
untoward situation.
• The passengers should not suffer in its custody.

33. MANTAINENCE
• Tender for the maintenance of the aircrafts has been given to a
company that does not have international reputation.
• Substandard spare parts should be avoided
• It should discard its old and obsolete fleet of aircrafts and have new
one to improve its overall performance.
• Sagging seats and soggy seat covers, messy floor carpets, dirty and
gritty outlook, malfunctioning toilet doors, rattling planes and failing
equipment need refurbishment, better maintenance and planning.
• It is necessary for PIA administration to put on considerable effort to
avoid anxiety of the travellers.

34. CONCLUSION

35. CONCLUSION
The Pakistan International Airlines is suffering from severe financial crisis. It is, in
fact, passing through a critical phase because of poor management.There are
complaints of terrible service, long delayed & cancellation of flights,unclean toilets
and last but not least non-serious attitude of the administration.These issues create
frustration among the passengers.The Airlines is at the brink of disaster. It needs
exemplary leadership, qualified and merit based staff and technically strong
administration to improve its performance.The bad governance, poor performance
and corruption are the major causes of its failure.Unfortunately PIA is functioning
with costs higher than returns. PIA claims that increase in oil prices and devaluation
of Pakistani currency are the major reasons behind its deficit. It needs remarkable
effort and money to improve its ranking in the world airlines.