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• Iqra Hafeez
• Atifa Asghar
• Hafiza Bushra Khushi
• Ayesha Imtiaz
GROUP MEMBERS
MANAGEMENT
FAILURE CASE
PAKISTAN
INERNATIONAL
AIRLINES
GREAT PEOPLE TO FLY WITH
• History
• Introduction
• Facilities
• Downfall of PIA
• Financial Performance
• Problems
• Failure
• Causes
• Suggestions
CONTENTS
HISTORY
• New airline ‘Orient Airways', was registered in Calcutta on
23 October 1946 by MR.Isphahani.
HISTORY
INTRODUCTION
• In March 1960 , becoming the first Asian airline to induct a
jet-aircraft in its fleet.
1960’s
• In 1974, PIA launched Pakistan International Cargo,
offering air freight and cargo services.
1970’s
• In 1984, the airline introduced Night-Coach service as a low-
cost alternative to day-time domestic flights.
1980’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.
1990’s
SERVICES
Domestic
(Better performances)
SERVICES
International
(FACING SEVERE COMPETITION)
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
DOWNFALL OF PIA
FINANCIAL
PERFORMANCE
Year Revenues (PKR in Million) Profit/(Loss) (PKR in Million)
FINANCIAL DOWNFALL
PROBLEMS
• 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.
CONTINUED.
FAILURE
• 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.
FAILURES
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.
CAUSES
SUGGESTIONS
1.
• Immediate Steps
4.
• Managerial Work
5.
• Maintenance Improvement
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.
IMMEDIATE STEPS
• 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.
• 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).
MANAGERIAL WORK
• Tender for the maintenance of the aircrafts has been given to a
company that does not have international reputation.
• 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.
MANTAINENCE
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.
CONCLUSION