Internship Report PIA

TABLE OF CONTENT
Contents
TABLEOFCONTENT..........................................................................................................................1
PREFACE...........................................................................................................................................2
ACKNOWLEDGEMENT......................................................................................................................3
MISSIONSTATEMENT....................................................................................................................................6
STATEMENTOFETHICSANDBUSINESSPRACTICES.........................................................................................................7
INTRODUCTIONOFTHECOMPANY.......................................................................................................................8
Introduction......................................................................................................................................9
BriefHistory....................................................................................................................................10
ProfileofEmployeesandNumberofAircraft................................................................................................12
ProductLines...................................................................................................................................13
RooseveltHotel,NewYork...............................................................................................................13
ScribeHotel,Paris..........................................................................................................................13
MinhalHolidayInn,Riyadh...............................................................................................................14
CentreHotel,AbuDhabi..................................................................................................................14
ORGANIZATIONALSTRUCTURE.........................................................................................................................15
Organization....................................................................................................................................16
Organizational/CorporateStructureofPIAC.................................................................................................17
HIERARCHYOFPIACMANAGEMENT.............................................................................................................18
CorporateProfile...............................................................................................................................19
DEPARTMENTSOFPIAC..............................................................................................................................20
Network&RoutePlanningDepartment.................................................................................................21
AdministrationDepartment...............................................................................................................21
FinanceDepartment.......................................................................................................................22
MarketingDepartment....................................................................................................................22
EngineeringDepartment..................................................................................................................23
Pakistan International
FlightOperationsDepartment.............................................................................................................24
AirportServicesDepartment..............................................................................................................24
CoordinationDepartment.................................................................................................................25
ORGANIZATIONAL STRUCTURE AT DIVISIONAL LEVEL.............................................26
History of Multan air port..........................................................................................................27
Financial performance...............................................................................................................28
SWOT ANALYSIS........................................................................................................................38
STRENGTHS................................................................................................................................39
WEAKNESSES.........................................................................................................................42
OPPORTUNITIES.....................................................................................................................43
THREATS..................................................................................................................................45
PEST ANALYSIS..........................................................................................................................48
PEST ANALYSIS..........................................................................................................................49
1. POLITICAL FACTORS.....................................................................................................49
2. ECONOMIC FACTORS....................................................................................................50
3. SOCIAL FACTORS...........................................................................................................51
4. TECHNOLOGICAL FACTORS........................................................................................51
Achievements and Recognitions................................................................................................53
Recommendations.............................................................................................................................56
CONCLUSION..........................................................................................................................................59
PREFACE
All praise is to Almighty Allah for

bestowing me with the wisdom to
accomplish my task.
etting practical knowledge in one of the major aims of MBA program. Department
of business administration Bahauddin Zakariya University City Campus, Multan
has followed policy of assigning different practical assignments to its students so a
touch of real working environment can be given to the students apart from
classroom studies to widen their perspective.
PIAC is the national airline of Pakistan. The information has been gathered from
different sources including the web site, web pages related to the airline, personal
discussion with employees, and visit to the branch office situated in The abdali
road Multan.I have included all the information obtained from the mentioned
sources .
As regards the preparation of this project, all the topics are added in a proper
sequence, starting with the table of contents, including the history, overall view,
company information, management hierarchy, flow of information, types of
information systems, everything that was required for the completion of the
project.
ACKNOWLEDGEMENT
In The Name Of Allah the Most

Beneficent and the Merciful
I
am, with the esteem depth of my heart, thankful to the Head of
Department, Mr. Shoukat Malik, and to our teacher that all of them
provided me an opportunity to have a practical knowledge of all that I
have studied in the course and are busy in polishing my interpersonal qualities.
I have tried to accomplish the task assigned by the faculty to the best of my
abilities, but still nobody can claimed that he is perfect and there can be a
number of problems in this report that will be removed only by the guidance
from the faculty. I welcome and appreciate the error picking and suggestions
from the esteem members of faculty.
Here I would like to thank hole heartedly the respected employee of the PIA
Multan office, Abdali road Multan I acknowledge them with thanks for their
help. In my study of the organization.
It would not be fair to mention the name of my collogue who has helped me in the
compilation of this report as he was too busy in his own personal life but he stood
up as a good friend and helped me in conducting the financial analysis of the PIAC
,so thank you Mazher Islam for your guidance and support.
Salman ilyas
MBC-o8 -40
EXECUTIVE SUMMARY
P
akistan International is the largest air line of the country and the national flag
carrier for the state of Islamic republic of Pakistan. It came into existence in 1947 by
the advice of the Quaid Muhammad Ali Jinnah and ever since it has been serving the
nation. In addition to the convenience of domestic flyers PIAC is serving its International
customers throughout the country and also at several overseas locations.PIA is a 3 star air line by
skytrax international.
In this 6 weeks internship program, I have worked in different departments of the PIAC which
include Operations, Admin, HRM, Sales and Promotion, Cargo And Finance section of
PIA Multan and I have learnt a lot from these professional individual who have been working in
their respective fields.
During my internship, I have found that in airlines concentration and consistency is of utmost
importance. Your little mistake can create a big problem and can jeopardize the life of many
individuals. i have worked one week in the above mentioned departments and I have come to
conclusion that these guys are miracle workers. It seems like a in this advance all the jobs are
done by computers but there are still many people who are working for the smooth operations of
the PIAC. The statement feels true when we say that ‘it’s the man behind the gun that’s counts ‘.
This report contains the information and learning about UBL that I learnt during the 6 weeks
internship period in PIAC.
At the end of this report, on the basis of my observations during internship, financial analysis and
SWOT analysis of PIA is provided. Suggestions are also recommended as per learning from
analysis. This report will provide a better and brief learning about Pakistan international.
VISION
PIA’s vision is to be a world class airline meeting
customer expectations through excellent services,
on-time performance, innovative products and
absolute safety.
MISSION STATEMENT
AS A SYMBOL OF NATIONAL PRIDE, PAKISTAN INTERNATIONAL
MUST STRIVE TO BE AN AIRLINE OF CHOICE OPERATING PROFITABLY ON MODERN COMMERCIAL
CONCEPTS, CAPABLE OF COMPETING WITH THE BEST IN ITS ENTIRE
INTERNATIONAL AND DOMESTIC MARKETS CONSISTENTLY EXCEEDING CUSTOMER EXPECTATIONS. IT

SHOULD BE A CHOICE EMPLOY DEPLOYING MODERN TECHNOLOGY IN ALL SPHERES OF ITS
ACTIVITIES.
STATEMENT OF ETHICS AND BUSINESS PRACTICES

✔ The Corporation’s policy is to conduct business with honesty and integrity and be ethical in
all its dealings, showing respect for the interest of those with whom it has relationship.
✔ The Corporate complies with all laws and regulations. All employees are expected to
familiarize themselves with laws and regulation governing their individual areas of
responsibility, and not to transgress them. If in doubt, employees are expected to seek advice.
The Corporation believes in fair competition, and support appropriate competition laws.
✔ The Corporation does not support any political party nor contributes to the funds of groups
whose activities promote party interests.
✔ The Corporation in committed to provide services, which consistently offer value in terms of
price and quality and satisfy customer needs and expectations.
✔ The Corporation is committed to run its business in an environment that is sound and
sustainable. As a good corporate citizen, the Corporation recognizes its social
responsibilities, and will endeavor to contribute to community activities, for betterment of
society as a whole.
✔ The Corporation believes in and fully adheres to the principles of reliability and credibility in
its financial reporting and in transparency of business transactions.
✔ The Corporation in an equal opportunity employer. Its employee recruitment and promotional
policies are free of any gender bias, and is merit and excellence oriented. It believes in
providing its employees safe and healthy working conditions, and in maintaining good
channels of communications.
✔ The Board to ensure that the above principles are complied with, for which the Board has
constituted the audit committee, to be supportive of compliance.
✔ The Corporation expects its employees to abide by certain personal ethics, whereby
Corporation information and assets are not used for any personal advantage or gain. Any
conflict of interests should be avoided, where it exists it should be disclosed, and guidance
sought.
INTRODUCTION OF THE COMPANY

Introduction
When Pakistan came into being on 14th August 1947 there was only one Airline in
operation called “Orient Airways”. After some time two more airlines “Pakistan
Air limited” and “Crescent Airways” started commercial operation. None of
these small Air Service Companies could succeed to cover the requirements of the
Air Traffic of the country. Ultimately two of these failed to continue their
operation. In 1952 “Orient Airways” was the only operational company operating
on domestic routes.
The government and the people of Pakistan were sincerely struggling hard for
development of their country with the aim to reach to the similar level of
advancement as of other free nations of the world. Communication system is the
basic requirement of country. So in 1955 the Government took an initiative and
passed an ordinance to form an Air fleet under the name of Pakistan International
Airlines (PIA) to meet the needs of domestic and international air traffic.
PIA began operation on Karachi-Dhaka sector with three aircraft in 1955. Later
PIA and Orient Airways, a private carrier, were merged to form PIAC (Pakistan
International Airline Company). Over the years PIA gradually expanded its
network and is now serving 83 destinations in four continents.
Brief History
PIA entered the international aviation with service from Karachi to London via
Cairo and Rome. Until about the middle of 1956, PIA had been running in loss but
in 1957, it should make profit. In 1958-59 PIA started modernizing its fleet as a
result of which Boeing 707 was added to the PIAC fleet. PIA was the first airline to
operate jets in Asia. New York-Karachi route was inaugurated in 1957. Boeing
flight was introduced between two wings of Pakistan in 1961-62. PIA became first
non-communist airline to fly to the People’s Republic of China and operated two
services between Asia and Europe via Moscow in 1963-64. PIA made record
operating surplus of Rs. 49.22 million (about 54.71% of paid up capital). In 1966-
67 engines overhaul shop was commissioned and completed.
In 1967-68 first batch of PIA trainee pilots completed their training from PIA
flying school and received commercial pilot’s license. A new jet hanger for Boeing
was completed in 1967-68. In 1969-70 PIA started to extend engineering services,
domestic operation, international operation, agreements were signed with other
airlines like Yugoslavia Airline. Terminal facilities were expanded at Islamabad
and Karachi and management agreement was signed with Air Malta under which
PIA seconded a Management team to Malta in 1972-73. During this year wide
body Douglas DC-10 was introduced. Full time chairman of the Board of Directors
was appointed in 1973-74.
PIA earned Rs. 152.08 million profit, introduced pension scheme employees and
added four more aircraft to the fleet during 1976-77. Technical services to Somali
Airlines, Air Malta and Yemen Airways were started in 1977. Two subsidiaries
were established and registered in the UAE to promote hotels. Boeing 747 was
introduced in 1977.
In house computerized reservations system (REPAK), New Flight Control System
at Karachi Airport is the achievements of 1980-81. PIA introduced first time,
“Direct Inward Dialing” telephone facility in Pakistan and installed Mini-Micro
computers in PIA Head Office. Automation in budgeting finance revenue, and
other important areas, was also introduced in 1982-83. International flights were
started from Peshawar, Islamabad and Lahore. Night Coach
Service was introduced into the fleet of PIA ion 1983-84. Flight Kitchen of PIA,
which was commissioned in February 1977 was extended and modernized in 1983-
84. Five 737-A300 aircraft were introduced into the fleet of PIA in 1984-85.
“Sohni” Executive class on all PIA B-747 aircraft on international flights was first
time introduced by the corporation in 1985.
Auto ticketing flight kitchen at Islamabad routes on Civil Air Transport, were
achievements of PIA in 1986-88. During the period many new routes were
introduced including Twin Otter operation to Muzaffarabad and Rawalakot.
Automated reservations and ticketing facility introduced at Larkana during 1989-
90. Two women pilots were inducted in PIA for first time in the history from
Lahore and International flights from Mohen-Jo-Daro airport (Larkara) were

started.
Profile of Employees and Number of Aircraft

Right now PIAC has more than 25000 employees out of whom about 17,500 are
permanent, and remaining are working on daily wages. PIAC has 47 aircraft in its
fleet details of which is as under:
Boeing 747-300 6
Boeing 777-24ER 3
Boeing 747-200 4
Airbus A-300-b4 8
Airbus A-310 6
Boeing 737-300 7
Fokker F-27-200/400 11
Twin Otter 2
* Lease Aircraft
** PIAC also has 2 * B747-200 and 2 * B-707 grounded aircraft.
PIAC also a way to replace its fleet. For the purpose, Aircraft Acquisition
Committee (AAC) by the Board of Directors of PIAC. PIAC signed an agreement
with Boeing Company for B777-200ER aircraft and also want to induct Airbuses,
presently taken on lease. PIAC wants to replace its fleet in phases. In first phase, 2
* B747-200, 8 * A300 B4 and 11 * Fokker aircraft were taken off by replacing
these aircraft with newly inducted 6 * B747-300, 3 * B777-200ER, 4 * A310-300
and 7 Turbo Prop aircraft. In the second phase, PIAC planned to replace its 2 *
B747 Combo by inducting 2 * B777LR and 2 * A310-300 Freighter.
Product Lines
PIAC, the National Flag Carrier, is basically service-oriented organization and its
product is space in the aircraft, which is sold to its customers for passenger or
cargo in particular flight on a particular sector whether domestic or international.
PIAC other than its original product i.e., airline industry also has PIA Investment
Limited (PIAIL) which is a wholly owned company of PIAC and an initial
investment of US$ 10 million was made in it by PIAC as 100% of the paid-up
capital. The shareholding was altered in 1979 with the equal participation of
H.R.H. prince Faisal, under a Shareholders’ Agreement. PIAIL was incorporated
on 10th September 1977 at Sharjah (UAE) as a limited company under a decree
issued by H.H. the Ruler of Sharjah. PIAC unvested in the following four hotels:
 Roosevelt Hotel, New York
 Scribe Hotel, Paris
 Minhal Holiday Inn, Riyadh
 Centre Hotel, Abu Dhabi
Roosevelt Hotel, New York

Constructed in 1924, the Roosevelt Hotel is an historic classically styled NY City
Hotel, with 1033 rooms, 27700 sq.ft of meeting and banquet space, a restaurant,
two lounges and approximately 40000 sq.ft of rental, office and restaurant space.
The 22-story property contains approximately 670000 sq.ft of gross building area.
Scribe Hotel, Paris

The Scribe Hotel, situated on 1, Rue Scribe-Paris is rated as a 4 Star Hotel having
217 rooms. CN France SA (CNF) has leased the building to Minhal France SA
(MFSA) (a Subsidiary of PIAIL) to operate the building as a hotel up to 31
December 2030.
Minhal Holiday Inn, Riyadh

Riyadh Minhal Hotel Company Limited (RMHC or the company) is a Saudi
Arabia Limited Liability Company established in 1979 under Commercial
Registration No. 10100181290 to provide Hotel and Restaurant Services.
Currently, the company owns a Hotel in the city of Riyadh with 255 guestrooms
under the management of Holiday Inn Worldwide operating as Minhal Holiday Inn
Riyadh. The management agreement dated 23 April 1991 is between RMHC and
Holiday Inn Riyadh limited for a period of 20 years.
Centre Hotel,Abu Dhabi

A Joint Venture Partnership Agreement (JVPA) was executed between PIAC and
(Late) Sheikh Hamdan and 8 June 1977 to convert an on-going construction of an
office/apartment building into a hotel. The “Centre Hotel” was thus opened for
business on 2 October 1979 as a first class hotel in Abu Dhabi. The capital
contribution of the partnership in proportion of 51% (Dhs 48,712,951) Sheikh
Hamdan and 49% (Dhs 46,802,638) of PIAC.
ORGANIZATIONAL STRUCTURE
Organization
Corporation (PIAC) has been divided into different departments as shown in
organizational chart. PIA is one of the biggest commercial organization in our
country and has worldwide operation the corporation has network of flights around
the globe to control worldwide operation, there is a department meant for overall
management of PIAC. Administration Department consists of different Division
and units. A Director heads each department, GM, each section, heads each
Division by Manager and subsections and assistant managers control units.
Organizational/Corporate Structure of PIAC

HIERARCHY OF PIAC MANAGEMENT

Corporate Profile
DEPARTMENTS OF PIAC
PIAC Airline has been divided into the following function units.
Network & Route Planning
Administration
Finance
Marketing
Engineering
Flight Operations
Airport Services
Cargo Sales & Services
Precision Engineering Complex
Flight Services
Coordination
Network& Route Planning Department
This department carries out formulation and implementation of overall corporate
plans. This department provides guidelines to each division/department to fix their
goals and formulate strategies to achieve them. It has the following subdivisions:
International and Civil Aviation Affairs Division
Economic Planning Division
Fleet Planning Division
Administration Department
Administration department is one of the pivotal departments, which is responsible
for the administration of human resources and formulation of the corporate
personnel policies; it has coordinating and regulatory body, which regulates
relationship between management and employees. Further subdivision is as under:
Human Resource Division

Personnel Division
PIA Training Center
Policies and Remuneration Division
Security Services Division
Medical Services Division
Industrial Relations Division
Legal Services Division
Sports Division
Finance Department
Finance department is one of the biggest departments in the airline, which is
responsible for provision of efficient and effective accounting/budget. The
feasibility of extending financial, administrative, technical facilities is control by
this department. It is also responsible for internal auditor of PIAC. It has further
divisions, which are as under:
Planning and Budget
Funds Management
Accounting
Internal Audit
Subsidiaries
Marketing Department
It looks after development of Marketing Plans & Policies. This department
performs all marketing functions. Subdivision is given below:
North (KHE) Division
South (KHI) Division
UK (LON) Division
USA & Canada (NYC)

Europe (FRA) Division
Saudi Arabia (JED) Division
Asia Pacific (SIN)
Cargo Sales Division
Market Planning & Services Division
Gulf (DXB) Division
Passenger Sales Division
Reservation & Yield Management Division
Engineering Department
This department takes care of planning, base/line maintenance and overhauling of
whole of the PIA’s fleet. To keep pace with the new technology, it has a special
branch named as “Development Engineering” to meet the future challenges in the
sphere of avionics. Following are its further subdivisions:
Planning and Project Division
Quality Assurance Division
Avionics and overhaul Division
Base Maintenance Division
Line Maintenance Division
Development Engineering Division
Power Plant Division
Resource Management Division
North Division
Flight Operations Department
This department coordinates the training, flight engineering, planning and
scheduling of flight operations. It is responsible for all the activities of the flight
operation in PIA and ensured central control over all flights. The department has
been organized on the following line:
Flight Engineering Division
Standards Division
Central Control Division
Planning & Scheduling Division
Technical Division
Coordination Division
Training Division
North Division
Airport Services Department

Customer Services Department has two subdivisions, which are given blow:
Passenger Services Division
As the name implies, this division is responsible to provide services to the
passengers as well as aircraft at the airport. This subdivision in addition to
the Passenger Services also possesses Facilitation & Planning, Technical
Ground Support (TGS) and Terminal Services (KCI).
Flight Services Division

This subdivision provides for provisioning of all in-flight services like food,
cabin crew and field services.
Coordination Department
The purpose of Coordination Department, which is headed by Director
Coordination, is to coordinate all matters received through Government of
Pakistan.
ORGANIZATIONAL STRUCTURE AT
DIVISIONAL LEVEL
History of Multan air port

Multan Airport traces its origins to the British Empire, when the Royal Air Force used the open
space to fly in and out of the Multan region during 1919. The area was used for aircraft that were
able to land on gravel and grass surfaces; however, there was very little development to the area.
In 1934, Imperial Airways started to use the airfield for civil aircraft flights since Multan was
considered a strategic position within the Punjab province of India. It was not until 1938 that
Imperial Airways started to operate a regular flight out of Multan. The flight would originate at
Lahore, then fly into Multan, where it would continue its journey to Jacobabad and then Karachi.
Following independence, the airline Pak Air started operations from the airport and the Multan
Flying Club was formed. Since the formation of the national carrier, Pakistan International
Airlines, in 1957 PIA started operations from Multan using the Douglas DC-3 aircraft. In 1963,
due to growth of the number of flights and larger aircraft requirements, the runway, taxi-ways
and aprons where carpeted using the material bitumen. A new control tower was constructed to
meet the technological changes of new aircraft traffic control systems. In 1971, since PIA had
acquired Boeing aircraft, the runway was extended to 9000' by 100' to handle heavier aircraft and
more passengers. The terminal building was also extended in 1977 which also saw the operations
of Boeing 720 aircraft operations from Multan. In 1980-88, the runway was strengthened and re-
carpeted for the arrival of Airbus aircraft especially the Airbus A300.
During 1999, PIA as well as Aero Asia International gave Multan an international status by
operating flights to the Middle East such as Dubai and Kuwait. To cater for the Multani
population living or traveling to more lucrative destinations. In 2005, the local government and
the CAA decided to upgrade the airport terminal and airfield to meet international standards with
emphasis on the runway, terminal building, facilities as well as apron areas. On 15 December
2006, Shaheen Air started four weekly flights from Karachi to Multan. Shaheen Air was the first
airline in the private sector to operate flights to Multan.The airport reported an operating profit of
Rs1 Billion in 2007. The airport is also being considered for Hajj and umrah flights to Saudi
Arabia which is expected to generate more revenue as well as growth of international routes out
of Multan.
Financial performance
The profitability of PIA as published in the 2008 annual report by Pakistan International Airlines
Corporation with figures in millions of Pakistani Rupees. The following table suggests the key
financial results for the end of year period of the financial year. PIA explains that the loss was
caused by two key exogenous factors that caused the continued loss in PIA's profitability: the
weakening of the Pakistani rupee and the rise in crude oil prices during 2008.
Operating Performance
Year Revenues Rs Millions Profit/(Loss) Rs Millions
2008 89,202 (35,880)
2007 70,481 (13,339)
2006 70,587 (12,763)
2005 64,074 (4,412)
2004 57,770 2,307
2003 47,788 1,299
Business volume
Financial
Analysis
All the amounts are in thousand rupees.

All the analysis has been done on data provided in the annual report by PIAC.
Liquidity ratio
Current ratio
Working ratio
Quick ratio
Current Ratio:
Current Ratio= Current asset

Current liabilities
2008 2007 2006

15039282 / 71707905 13251331 / 52049542 21032248 / 42635389
0.20x 0.25x 0.49x
Current ratio shows the relationship between current assets and he current liabilities and ability
of the firm weather the firm is able to pay its current obligations.
The current ratio of PIA is last three years was less than one (1) where as the thumb rule says that
current ratio of any organization is should be two (2).
So the current ratio of the PIA is very unsatisfactory.
Working Capital:
Working Capital =Current Assets –Current Liabilities
Working
Year Cur Assets – Cur Lib
Capital
2008 15039282 - 71707905 (56668623)
2007 13251331 - 52049542 (38798211)
2006 21032248 - 42635389 (21603141)
Working Capital is the amount required by the organization to meet its current needs. Working
capital of PIA for the last three years was in negative it means in the past three years PIA has no
working capital.
Quick ratio:
Quick Ratio = current Asset - Trade Debts

Current liabilities
2008 2007 2006

15039282- 13251331- 21032248-
(5757849+1418616) (5012778+1043971) (6521586+1100676)
71707905 52049542 42635389
0.10x 0.13x 0.31x
Profitability ratio:
Net profit margin
Gross profit margin
Return on asset
Return on Equity
Net profit / Loss Margin:
Formula = Net profit / Loss Margin *100

Sales
2008 2007 2006

35880157*100 13398706*100 12422816*100
89201567 70480434 76435189
(40%) (19%) (16%)
Net profit loss margin shows the percentage of profit or loss for any organization with respect to
sales so the profit loss margin for the last three years for the PIA was.
2008 40%
2007 19%
2006 16%
Gross Profit Margin:

Formula = Gross profit *100
Sales
2008 2007 2006
3639290*100 3924239*100 171192*100
89201567 70480434 76435189
(4%) (5.56%) (2.23%)
Gross profit margin shows the percentage of gross profit with respect to the sales .gross profit
ratio of PIA is very low as compared to the other air lines in the past three years which is not the
good sign for the organization .low gross profit means no net profit but big loss.
Return on assets:
Formula = Net profit Loss *100
Total assets
2008 2007 2006

35880157*100 13398706*100 12422816*100
139669867 118773574 131403846
(25.68%) (11.28%) (9.45%)
The return on assets for the PIA shows the percentage of profit or loss with respect of total assets
for few years PIA was in consistent loss and in the last three years the return on assets are
2008 25.68
%
2007 11.28
%
2006 9.45%
Return on Equity:
Formula = Net profit Loss *100

Total Equity
2008 2007 2006

35880157*100 13398706*100 12422816*100
46701927 11903558 2425864
76.82% 112.56% 512.09%
The return on equity for the PIA shows the percentage of profit or loss with respect to total
equities profit as well as equities was in negative in the last three years for the PIA. So the return
on equities was not satisfactory.
Activity ratios:
Debtor turnover
Days sales outstanding
Total asset turn over
Fixed asset turn over
TIE ratio
Debtor turnover:
Formula = Net sales
Debtors
2008 2007 2006

89201567 70480434 76435189
5757846 5012778 6521586
15x 14x 11.72x
Debtors turn over shows how many times the debtor are turn over for the last three years .debtor
turnover for the last three years are following.
2008 15x
2007 14x
2006 11.72
x
Days Sales Outstanding:
Formula = 365
Debtor’s turnover
2008 2007 2006

365 365 365
15 14 11.72
24days 26days 31days
This ratio shows in how many days the debtors of PIA are received, DSO in 2008 was 24 days,
in 2007 it was 26 days and in 2006 it was 31 days.
Total asset turn over:
Formula = Sales
Total assets
2008 2007 2006

89201567 70480434 76435189
139669867 118773574 131403846
0.63times 0.59times 0.58times
Total asset turnover shows that how many times the sales are generated with respect to its total
assets.
Fixed asset turn over:
Formula = Sales
Fixed assets
2008 2007 2006

89201567 70480434 76435189
124630585 105522243 110371598
0.71times 0.66times 0.69times
Fixed asset turnover shows that how many times the sales are generated with respect to its fixed
assets.
TIE Ratio:
Formula = EBIT
Interest
2008 2007 2006

(31337642) (5935076) (7594638)
8351648 7135845 6174350
(3.75x) (0.831x) 1.23x
This ratio shows how many times any organization pays interest cost in one year for this
calculation we can say that PIA for the last two years haven’t pay any interest expense where as
in 2006the TIE ratio was 1.23 times.
MARKET RATIO
EPS (Earning Per Share):
Year 2008 2007 2006
EPS 17.79 6.61 6.62
In the last three years PIA Was baring Loses so there is no earning per share ,loss per share in the
last three years are given above in the table.
Dividend yield Ratio:
No dividend has been paid in the last three years.

SWOT
ANALYSIS
Frame1
STRENGTHS
1.LEADING MARKET POSITION
PIA is one of Pakistan’s leading air carriers, with more than 800 daily flights.
Around 150,000 passengers a month fly on PIA, making it one of the major
operators in the domestic market in terms of passenger kilometers. PIA’s
international market share was 43.5%, In the Domestic market, its market share
was 69.4%. On a system-wide basis, PIA’s market share was 51.2% at the end of
year 2007.
Its strong market position is driven by consistently low fares as well as reliable
service, frequent and convenient flights, use of new technologies like e-ticketing
and self check-in terminals, comfortable cabins and superior customer service.
2.BRAND RECOGNITION
PIA has high brand recall. It is recognized by travelers all over the country. PIA is
a national airline, operating passenger and cargo services covering eighty-two
domestic and foreign.
PIA has earned the number one ranking in customer satisfaction. This strong
market position gives the company a scale advantage and helps it strengthen its
brand image.
3.SUPERIOR OPERATING STRUCTURE

PIA has maintained its position as the low cost carrier. It has been first class
Pakistani airline to use the latest technology. Factors’ contributing consists of
different series of Boeing and Airbus and an efficient, high-utilization and point-
to-point route structure. Flying one type of aircraft significantly simplifies
scheduling, maintenance, flight operations, and training activities. PIA has
continually achieved high asset utilization and employee efficiency. Superior
operating structure serves as the primary competitive advantage of PIA.
4.NETWORK PRESENCE
PIA enjoys a strong network in key domestic and international destinations. The
company’s network includes three the major airports in Pakistan, as well as major
international airport such as Dubai International Airport. Having a strong network
means that PIA can generate traffic feed for both its domestic and international
Flights.
5.HUB AIRPORT AT KARACHI

PIA operates from its hub in Jinnah International Airport, Karachi. Jinnah
International is one of the world’s busiest airports in terms of number of passengers
carried. It is also one of the largest international gateways to Asia. It is also the
leading international air passenger (and cargo) gateway to Pakistan. The
company’s strong presences in airports with heaviest traffic levels in Pakistan give
it a competitive advantage.
6.EFFECTIVE USE OF TECHNOLOGY

PIA has successfully incorporated latest technology in all its systems, giving it an
edge over competitors. PIA takes credit for introducing most new technologies to
the Pakistani market. It was the second carrier in Pakistan to incorporate the c-
ticketing system and the second in South Asia to introduce self check in systems at
the Jinnah International Airport, Karachi.
WEAKNESSES
1. FORMULATION OF GOVT. RULES
The Basic flaw of this organization is its consolidation that is centralized system.
The key policies, strategies and set of laws are designed by the upper management.
The centralized system is one of the biggest obstacles of long term success of PIA.
PIA centralizes structure lead to barrel between different level of management,
decreased motivation, hard access to information.
2. HIGH DEPENDENCE ON PASSENGER REVENUES

Passenger revenues accounted for 87 percent of the PIA’s total revenue in 2007.
Cargo services allow airlines to generate additional revenues from existing
passenger flights. In addition, cargo revenues are usually counter cyclical to
passenger revenues and have lower demand elasticity than passenger business,
which allows airlines to pass on fuel price hikes to customers.
3. DEBT
PIA has a significant amount of 42 billion debts. Current and future debts could
have important consequences for stakeholders of the company. For example, debt
could impair PIA ability to make investments and obtain additional financing for
working capital, capital expenditures, acquisitions or general corporate or other
purposes. Debts could also put PIA at a competitive disadvantage to competitors
that have lesser debt and could also increase the company’s vulnerability to interest
rate increases.
4. RELIANCE ON OIL PRICES

PIA’s sustainability, growth and revenues directly depend on oil prices. A steep rise
in oil prices can seriously damage the long term viability of any airline. Recently
many airlines around the world went bankrupt due to rising oil prices. Airlines
need to hedge against this risk by taking proper measures.
OPPORTUNITIES
1. HAVING THE MAXIMUM ROUTE AND FLEET

PIA is having the maximum route and fleet domestic and international destinations
network in Pakistan as compared to its Competitors. Route and fleet expansion will
positively impact the company’s operations by increasing revenues.
2. GROWING DEMAND FOR LOW COST AIRLINES

The growing demand for air travel is driven by lower fares and consumer
confidence. A survey by International Aviation Authority showed that ticket price
is the number one criterion for passengers when selecting a flight, well ahead of
the availability of a non-stop service.
3. CUSTOMER LOYALTY
PIA’s frequent flyer and loyalty programs can help it retain customers. PIA’s
Awards+plus (frequent flyer program) was established to develop passenger
loyalty by offering awards and services to frequent travelers. Such schemes
encourage repeat travel on PIA, as passengers seek to accrue the benefits given to
regular travelers. This enables the airline to retain customers and reduce costs, as it
does not have to spend money targeting new customers to replace those lost to
other airlines.
4. SHIFTING CUSTOMER NEEDS

The needs of air passengers are increasingly changing, as they are becoming more
and more price sensitive. If PIA succeeds in making its prices more competitive,
then the company will be able to gain significant market share.
5 .INDUSTRY RECOVERY
Market analysts believe that the global airline industry will experience an upturn in
fortunes over the next few years. This represents an opportunity for PIA, as it
could generate increased revenues and command market share if it capitalizes on
increases in demand.
THREATS
1. HIGH INTEREST RATES
The past few years have seen State Bank of Pakistan impose high as well as low
interest rates to check inflation and the overheating of Pakistani economy. Inflation
in Pakistan may see another raise in the short-term.
2. ACCIDENTS
There had been five accidents with PIA listed as below:
• Pakistan International Airlines Flight PK 705 was a Boeing 720 – 040 B that
crashed while descending to land on Runway 34 at Cairo International Airport on
May 20, 1965 resulting in 119 fatalities.
• Pakistan International Airlines Flight PK740 was a Boeing 707-340C that crashed
after takeoff from Jeddah International Airport on November 26, 1979. All 156
aboard were killed.
• Pakistan International Airlines Flight 268 was an Airbus A300B4-203,
registration AP-BCP, which crashed on approach to Kathmandu's Tribhuvan
International Airport on September 28, 1992. All 167 on board were killed.
• PIA Flight 554 is the flight number of a Pakistan International Airlines (PIA)
Fokker F27 that was hijacked on May 25, 1998. The flight started its journey at
Gwadar in Balochistan after originating in Turbat, and was flying to Pakistan's
southern port city of Karachi. The aircraft was carrying 24 passengers and 5 crew
members.
• Pakistan International Airlines Flight 688 (PK688, PIA688) was scheduled to
operate from Multan to Lahore and Islamabad at 12:05 pm on July 10, 2006. It
crashed into a field after bursting into flames a few minutes after takeoff from
Multan International Airport. All 41 passengers and four crewmembers on board
were killed.
PIA has to continuously ensure utmost safety and security of its passengers.
Accidents can adversely affect customer confidence in PIA and result in declined
revenues intensifying competition.
3. STRONG COMPETITION BY AIRBLUE

PIA is now competing against carriers such as Airblue and Shaheen Airline. PIA
remains Airblue’s strongest competitor because of the huge market it has gained
over time, strong brand image and customer loyalty.
PIA has started new low-fares subsidiary “PIA Express” to stop the Airblue market
share growing to fast. Moreover, major legacy airlines have been focusing on
restructuring costs, which has improved their competitiveness. With costs
restructured, the legacy airlines are becoming more formidable competitors in
terms of increasing capacity, matching prices and leveraging their frequent flier
programs. Increasing competition could adversely affect the company’s margins.
4. INTEREST AND FOREIGN CURRENCY EXCHANGE RATES

Fluctuating foreign currency exchange rates can have a significant impact on PIA’s
earnings. For example, as PIA is providing its services to the UK. Negative or
positive effects arise from exchange rate movements as change in expenses.
Strengthening of foreign currencies against the British Pound will positively
impact PIA and vice versa.
5. DECLINE IN AIRLINE INDUSTRY

A number of factors have caused the current decline in the airline industry. For
example, the threat of further terrorist attacks since September 11 and a fall in the
number of business travelers have both caused passenger numbers to fall. These
and other factors may continue to affect demand for air travel in the future, which
will affect revenues of PIA. The threat of terrorism may discourage people from
traveling by air and could especially reduce the number of passengers traveling on
international flights.
PEST
ANALYSIS
PEST ANALYSIS
The macro-environment includes all factors influencing a company that are not
within its control. These include political, social, economic and technological
factors. These are known as PEST factors. A technique of analysis of the macro
environment is PEST analysis. Environmental analysis should be continuous arid
precede all aspects of planning. Since the airline industry is very much influenced
by changes taking place in the environment and has undergone rapid and dramatic
changes during the last decade, this analysis is especially important for PIA.
Frame1
1. POLITICAL FACTORS
Political factors always have a great influence on the way businesses operate in the
airline industry and the spending power of customers. In recent years it has been
observed that government played an active role in increasing competition in the
airline industry. A number of new airlines such as AirBlue and JS Air have been
awarded licenses to enter the domestic market. Pakistan has achieved some
political stability in recent years. If the management of PIA believes that the
present government will perform well (consistently), then there will be more
investment in the form of purchase of new airplanes and latest technology. The
overall industry will grow resulting in more luxurious and comfortable flights.
With the military takeover government policies have become more liberal.
2. ECONOMIC FACTORS
Currently, Airlines industry has three major players: Pakistan International
Airlines, an Airblue, Aero Asia and Shaheen Airlines. Their target market includes
domestic travelers as well as Pakistanis living abroad particularly in the UK and
USA. These countries have strong economies coupled with high purchasing power.
Customers’ purchase behavior depends very much on prices of the competing
airlines as well as services offered. As inflation rate is unstable in Pakistan,
spending power of consumers has effected in the long term. In fact growth in
Pakistani economy has resulted in an increase in spending power and has

positively impacted the airline industry.
Economically, the new millennium has been highly volatile; the September 11
attacks revolutionized the whole world. Consequently, there was a global
depression in the North America, South America, Australia and Europe. However,
in Asia especially Pakistan the effect in the short term was otherwise. The economy
began to boom because of greater remittances from abroad and whole sum
immigration by expatriates. As a result, demand for air travel in South Asia rose.
Economic conditions of Pakistan are however improving. PIA has cost a advantage
over its competitors because of its newly acquired, improved, long distance
aircrafts from Boeing’ which give longer range and better fuel economy than any
other jet currently produced. This cost advantage is a barrier to entry for new firms.
However, this cost advantage will not be significant on domestic routes.
3. SOCIAL FACTORS
The social arid cultural influences on business vary from country to country. The
social structure of Pakistan is closely tied. The trend is now changing as the
general public is educated and is pursuing professional goals. Customers are more
aware of market conditions and available options and want to get best value for
their money. They spend considerable time and money on entertainment hence
increasing the need of in-flight entertainment systems. Also, word of mouth has a
significant impact in the use of airline services. Hajj attracts a huge number of
customers.
The social environment of Pakistan is turning liberal with the new regime. The
initiative to automate check-in and ticket booking process might not be very
popular with the general public (even educated population) is still technology
averse. E-ticketing might also face significant challenges as consumers are
generally reluctant to provide their credit cards information over the phone and the
internet. The consumers, however, have a warm reaction to the prospect of less
costly but quality service flights.
4. TECHNOLOGICAL FACTORS
Technology is vital for competitive advantage and is a major driver of the airlines
industry. Major technological changes are taking place in the airlines industry with
innovations in the reservations and booking systems. In-flight entertainment
systems and auto check in counters are two examples of such innovations. Internet
plays a key role in e-ticketing as consumer can easily reserve tickets or check the
status of the flight. A key issue will be the extent, to which technological
advancements (such as Internet) impact distribution and cost synergies from
industry consolidation, can offset upward pressures on costs. PIA has always led
the path of technological innovations by introducing new technologies ahead of its
competitors such as its auto check-in counters which has helped it gain market
share. It was the first airline in Pakistan to install Saber system followed by the
market leader.
Achievements and Recognitions

PIA were the first Asian airline to receive the Boeing 737-300
PIA was the first airline to take delivery of the Boeing 777-200LR World Liner.
First airline from an Asian country to fly the Super Constellation.
First Asian airline to operate a jet aircraft.
First Asian airline to be granted maintenance approval by the US Federal
Aviation Administration (FAA) and the Air Registration Board, predecessor
of the British Civil Aviation Authority (CAA).
First non-communist airline to fly to the People's Republic of China, and
operate a service between Asia and Europe via Moscow.
First airline in Asia to induct the new technology Boeing 737-300 aircraft.
First airline in the world to operate scheduled helicopter services.
First airline to show in-flight movies on international routes.
The first airline in South Asia to introduce auto-ticketing facility.
The first airline in the world to fly to Tashkent, capital of the newly
independent state of Uzbekistan.
First airline in the world to start Air Safari with jet aircraft.
First Asian airline to start flights to Oslo, the capital city of Norway.
First airline in the world to induct the Boeing 777-200LR, the world's
longest range commercial airliner.
First airline in the world to take delivery of the Boeing 777-200LR World
liner (Longer Range Variant).
Pakistan International Airlines Flight Services Department was awarded the
ISO 9001:2000 certification award during May 2006.
First airline in Pakistan to operate a flight with an all female crew at

command and in the cabin.
First airline in the world to operate the Boeing 777-200ER, 777-200LR and
777-300ER altogether - all the three variants available on the market at the
time.
PIA Flight Kitchens in Karachi were awarded the HACCP Certification.
PIA was given three awards in 2008: The "Brands of the Year" Award,
"Consumers Choice Award" and "One The Best Airlines Award (Cargo)".
Recommendations
PIAC should use all modules of SabreSonic systems, as it’s the complete suit
for any airline to improve efficiency.
SABRE complete airline solutions helps in:

Operate
Our Operate solutions consist of vital tools to help airlines manage daily operations
so they can efficiently fly their schedules.
Crew management
Dining and cabin services
Flight operations
Flight planning
Maintenance, repair, and overhaul
Planning and scheduling
Resource management
Market
Our Market solutions provide advanced tools for airlines to plan and analyze data,
to determine how to best offer their schedule to customers and make the most
revenue.
Cargo management
Fares management
Inventory management
Loyalty management
Planning and scheduling

Passenger revenue accounting
Revenue integrity
Revenue management
Sell
Our Sell solutions help airlines increase sales by enhancing their ability to reach
customers through their preferred distribution channels.
Booking engines
Channel distribution
Customer relationship management
Market data and analysis
Reservations
Shopping options
Ticketing
Serve
Our Serve solutions offer systems to improve the travel experience and ensure
customer satisfaction, making it easy for travelers throughout their journey.
Customer check in
Customer processing
Trip organization
COSSAP – III should be web based (online) in order to save precious time in
transferring of data.
Proper computer training should be provided to the employees of the company
accordingly.
Government Corporation should be made independent under a new division of
aviation in the ministry of communication.
There should be clear distribution of work and only qualified person should be
appointed on jobs.
More motivation campaign should be introduced to increase employee’s
efficiency.
Refund facilities should be provided on airport.
Management should give more attention on computer up gradation and
implementation.
Monitoring at all level to achieve the organization’s objective i.e., to gain
maximum business/profit and provide better services to the customers and also
increase in popularity of the airline
The staff should be made more punctual to improve the productivity. In this
regard strict disciplinary action is recommended against the defaulters.
There should be proper downsizing/rightsizing in PIAC
There should be improve service standards and that should be quality oriented
There should be more advertisement in print & electronic media
CONCLUSION
Being a student of Business Administration is very useful for us to have some practical
knowledge about any good organization. This internship not only gives us an opportunity to
understand PIAC as a whole but also enhance our experience, thoughts and skills towards airline
industry. While collecting information from officers of PIAC-Multan office, we learnt a lot and
observe theoretical lessons of basic Management, and how this is being put in practice. PIAC,
being a service organization, cannot afford lose any customers. Customer’s satisfaction is
therefore the most important element of Airline. So to establish a good customer loyalty the
PIAC has started many loyalty programs for the customers.
Finally, we further concluded that PIAC no doubt, has many positive points whereas it has a few
weaknesses too. We have highlighted the weak areas and made certain recommendations. We are
sure that these recommendations will be of some value to the Top Management of PIAC.
References
http://www.airlinequality.com/Airlines/PK.htm
www.piac.com.pk
www.wikipedia.com
www.google.com
www.historyofPIA.com
IMPORTANT
DOCUMENTS
PIA Network
Countries Cities IATA Codes Served since
Bahrain Bahrain BHA 1967
Bangladesh Dhaka DAC 1976
Canada Toronto YYZ 1988
China Beijing, Hong Kong PEK , HKG 1973
Denmark Copenhagen CPH 1974
France Paris PAR 1966
Germany Frankfurt FRA 1962
Greece Athens ATH 1972
India Delhi, Mumbai DEL, BOM 1955
Indonesia Jakarta JKT 1993
Italy Rome ROM 1957
Japan Tokyo TYO 1969
Kuwait Kuwait city KWI 1966
Libya Tripoli TIP 1971
Malaysia Kuala Lumpur KUL 1972
Nepal Katmandu KTM 1983
Netherland Amsterdam AMS 1971
Norway Oslo OSL 1999
Oman Masqat MCT 1971
Philippines Manila MNL 1989
Qatar Doha DOH 1967
Jeddah, Riyadh
Saudi Arabia ,Dhahran JED, RUH, DHA 1966
Singapore Singapore SIN 1972
Sir lanka Colombo CMB 1965
Thailand Bangkok BKK 1967
Turkey Istanbul IST 1967
Dubai, Abu Dhabi,
U.A.E Sharjah DXB, AUH, SHJ 1982
UK London LON 1955
USA New York, Chicago NYC 1961
Uzbekistan Tashkent TSA 1992

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TABLE OF CONTENT

All praise is to Almighty Allah for

In The Name Of Allah the Most

INTERNATIONAL AND DOMESTIC MARKETS CONSISTENTLY EXCEEDING CUSTOMER EXPECTATIONS. IT

STATEMENT OF ETHICS AND BUSINESS PRACTICES

INTRODUCTION OF THE COMPANY

Lahore and International flights from Mohen-Jo-Daro airport (Larkara) were

Profile of Employees and Number of Aircraft

Roosevelt Hotel, New York

Scribe Hotel, Paris

Minhal Holiday Inn, Riyadh

Centre Hotel,Abu Dhabi

Organizational/Corporate Structure of PIAC

HIERARCHY OF PIAC MANAGEMENT

Human Resource Division

USA & Canada (NYC)

Airport Services Department

Flight Services Division

History of Multan air port

All the amounts are in thousand rupees.

Current Ratio= Current asset

2008 2007 2006

Quick Ratio = current Asset - Trade Debts

2008 2007 2006

Net profit / Loss Margin:

Formula = Net profit / Loss Margin *100

2008 2007 2006

Gross Profit Margin:

2008 2007 2006

Formula = Net profit Loss *100

2008 2007 2006

2008 2007 2006

2008 2007 2006

Total asset turn over:

2008 2007 2006

Fixed asset turn over:

2008 2007 2006

2008 2007 2006

Dividend yield Ratio:

No dividend has been paid in the last three years.

3.SUPERIOR OPERATING STRUCTURE

5.HUB AIRPORT AT KARACHI

6.EFFECTIVE USE OF TECHNOLOGY

2. HIGH DEPENDENCE ON PASSENGER REVENUES

4. RELIANCE ON OIL PRICES

1. HAVING THE MAXIMUM ROUTE AND FLEET

2. GROWING DEMAND FOR LOW COST AIRLINES

4. SHIFTING CUSTOMER NEEDS

3. STRONG COMPETITION BY AIRBLUE

4. INTEREST AND FOREIGN CURRENCY EXCHANGE RATES

5. DECLINE IN AIRLINE INDUSTRY

Pakistani economy has resulted in an increase in spending power and has

Achievements and Recognitions

First airline in Pakistan to operate a flight with an all female crew at

SABRE complete airline solutions helps in:

Planning and scheduling

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