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Topic: PIA To Be Privatized - Follow Malaysian Model
Username: LAXintl
Posted 2013-09-13 13:27:01 and read 6564 times.

While we've heard this idea before....


Pakistan Prime Minister Nawaz Sharif has expressed dissatisfaction over the performance of Pakistan International Airlines (PIA) and directed that the national flag carrier be partially privatized and follow the pattern of Malaysian Airlines restructuring.

The overstaffed and habitually loss making airline (reportedly USD $320mil+ loss in 2012) presently is managed from one crisis to another at taxpayer expense per the PM.

Under proposal initial 26% stake in the airline along with management control would be offered to international players under similar privatization model to how the Pakistan state telecom company was auctioned in 2000.

Former MH CEO Idris Jala was invited to attend the cabinet meeting and present details about Malaysian economic programs and government transformation of MAS.


Stories:
Pakistan to privatise national carrier
http://www.channelnewsasia.com/news/.../pakistan-to-privatise/812806.html

PIA to be upgraded on Malaysian Airlines model
http://www.brecorder.com/business-a-economy/189/1229883/

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Lets see how this goes over with labor unions, and what outside interest if any the 26% might garner. Maybe EY ?
  

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: Polot
Posted 2013-09-13 13:33:05 and read 6552 times.

Is MH really the best model to follow, or have things really improved for them?

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: mercure1
Posted 2013-09-13 13:36:19 and read 6526 times.

Since when is Malaysian Airlines a financial model to follow?

Last I see, they also continue to lose sums of money, and have experience a few rounds of their own restructuring trying to keep the ship afloat..

A better model to emulate would be something like Turkish Airlines - which went from 100% state owned loss making to partially private and extremely profitable.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: LAXintl
Posted 2013-09-13 13:46:55 and read 6473 times.

I agree MH is not exactly a shinning star of financial strength or efficiency but reading the article it says PM Sharif has an association with former Malaysian PM and have shared extensive discussions about economic reforms and experiences.
Hence here comes the former MH CEO as a special guest to help provide PK some guidance.

Its all political....

But agree, TK could be a great model, but as we know the unions torpedoed the planned JV with TK in 2011, so there still might be ill feelings.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: bennett123
Posted 2013-09-13 14:12:07 and read 6399 times.

According to airfleets, the age of the existing fleet is as follows;

A310 20.6 YRS
ATR 6.8 YRS
B737 26.3 YRS
B747 26.5 YRS
B777 7.6 YRS

It seems that a substancial fleet replacement programme is going to be needed within a couple of years.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: OA260
Posted 2013-09-13 14:45:06 and read 6298 times.

Quoting bennett123 (Reply 4):
It seems that a substancial fleet replacement programme is going to be needed within a couple of years.

They need a new fleet , a new mentality and new contracts for all staff. Its a shame to see a once decent carrier fall so far.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: 777way
Posted 2013-09-13 15:16:39 and read 6212 times.

Quoting LAXintl (Thread starter):
Lets see how this goes over with labor unions, and what outside interest if any the 26% might garner. Maybe EY ?

Yes lets see, as for investor it was supposed to be a local business group initially.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: Byrdluvs747
Posted 2013-09-13 15:18:53 and read 6209 times.

You would think the Pakistani govt would spend some of the billions in US aid on a few Boeing planes.

Quoting mercure1 (Reply 2):
A better model to emulate would be something like Turkish Airlines

Are you referring to TK's finances or their route network? I fail to see how a country infested with taliban fanatics will ever garner enough passenger traffic to emulate TK's hub.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: DTW2HYD
Posted 2013-09-13 15:28:12 and read 6176 times.

If EY is ready to invest, they should say goodbye to MH after initial presentation. Or let MH/local company invest. Otherwise too many cooks in the pot, Government/MH/Investors/Unions...

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: 777way
Posted 2013-09-13 15:28:46 and read 6176 times.



Quoting Byrdluvs747 (Reply 7):
I fail to see how a country infested with taliban fanatics will ever garner enough passenger traffic to emulate TK's hub.

PIA will never aspire to that, even if they are privatized 100%, I'm thinking more like Saudia, Sri Lankan, some of the better Indian LCC carriers or Air Blue at home, anything else is day dreaming.

[Edited 2013-09-13 15:36:54]

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: aerorobnz
Posted 2013-09-13 16:15:59 and read 6112 times.

Quoting Byrdluvs747 (Reply 7):
Are you referring to TK's finances or their route network?

He's referring to the successful transition from Govt owned to private equity. Not the profits or the hub stye ops that TK have.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: Polot
Posted 2013-09-13 16:22:24 and read 6090 times.

Quoting aerorobnz (Reply 10):
He's referring to the successful transition from Govt owned to private equity. Not the profits or the hub stye ops that TK have.

But they are closely linked however.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: ASA
Posted 2013-09-13 16:33:29 and read 6059 times.

Quoting Byrdluvs747 (Reply 7):

You would think the Pakistani govt would spend some of the billions in US aid on a few Boeing planes.

That's exactly they got the 777s in the early 2000s ... lots of aid flew into Pakistan after 9/11.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: MillwallSean
Posted 2013-09-13 22:27:55 and read 5767 times.

When we speak about this we need to see who they invited.
Idris jala, the man that actually did great when he ran MH. he took on to many of the cozy datuks though and got bumped upwards for it. He is really good and had he remained at MH the company would have stayed profitable.
he isnt MH anymore unfortunately. Idris jala is a Sarawakien christian as well so its a brave step to have him invited to Pakistan.

But as said its the transformation from public to private they invited him for not to see how present ownership is working.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: behramjee
Posted 2013-09-14 02:24:45 and read 5560 times.

PIA this year have floated a tender 3 times already for the dry lease of 10 narrow bodied A320/A321 or B738s but on all 3 occasions, it has been messed up through some form of outside interference.

Their B747 fleet after completion of Hajj 2013 operations shall be permanently grounded where as their A310s are now configured in a 227 seater all Y class cabin only. FRA and AMS have already been suspended with LBA next in line. I will not be surprised if both CPH and OSL too follow suit and mainland Europe is just left wit MXP and CDG which is operated 3 times per week using a B777 as ISB-MXP-CDG-ISB.

The A321-200 is the ideal replacement aircraft for the A310 for them to be used on the high density PAK-Middle East routes. This aircraft type can also be used to replace the A310 on their BKK-HKG services as the A321 can easily perform the 4.5 hour flight from PAK to BKK nonstop in both directions without a payload problem. The only route where it might face a hurdle is the 2 weekly ISB-PEK-NRT flight as PEK-ISB is a 6 hour 15 minute flight which can only be done with an A321-200 that has 1ACT (additional fuel tank) and not the standard model.

All being said though, it might not be a bad idea to completely shut down PIA write off the bad debts and start afresh with the B777s and ATRs being the only aircraft type of the current fleet being transferred over. The new PIA would have to get rid of the old dinosaurs of the current upper management team whose bad decisions have plagued this airline such the turn of the century. The long haul route network should focus only on UK, JFK, BKK and EY or EK via UAE and the Far East can be served via BKK with a code share with TG.

The core route network should encompass exploiting the higher yielding and higher volume PAK-Middle East market segment with A321s and B777s (mainly to JED/RUH and DXB only). The B777s configuration too needs to be changed to reflect reality i.e. having a J class cabin with 35 seats is fruitless for a non-premium branded airline like PK. It should maximum have 24 J class seats (all flat beds) on board its B772 and B773 fleet. The B773s though should have a 3-4-3 configuration in Y class (but not the B772 as they will be used on the longer flights primarily) in order to have great economies of scale especially on the higher volume PAK-Saudi flights + ISB/LHE-LHR/MAN.

JFK needs to be routed via SNN i.e. PAK-SNN-JFK-PAK so that the pax can clear U.S. immigration/customs easily at SNN and not have to endure the horror at JFK. The restructured fleet of the new airline would look like this:

6 ATR 42-500s (from current fleet) seating 50 pax

4 B777-200ERs
2 B777-200LRs
*both of the above would be from the current fleet and should be able to seat 320 passengers (24J + 296Y)

6 B777-300ERs (3 active and 5 are an additional order placed over a year ago but I dont feel a need for there to be 8 in the fleet so 2 would be canceled)
*these shall be transferred from the existing fleet and should be configured to seat 434 passengers (24J + 410Y with a 3-4-3 arrangement) which in turn will be used on flights to RUH, JED, DXB and MAN exclusively !

12 A321-200s (with 1ACT preferably) seating 186 pax (12J + 174Y)

5 A319s seating 122 pax (8J + 114Y)

Total desired fleet strength is 35 aircraft which is ideal !

The 6 B77Ws I would use in the following manner:

1 aircraft for 4 weekly LHE-JED + 3 weekly LHE-RUH
1 aircraft for 4 weekly ISB-RUH + 3 weekly ISB-JED
1 aircraft for daily KHI-JED-KHI-DAC-KHI same plane service
1 aircraft for daily ISB-MAN
1 aircraft for 4 weekly LHE-MAN + 3 weekly ISB-BHX
1 aircraft for daily ISB-DXB + daily LHE-DXB

The 2 B77Ls would exclusively perform:

1 aircraft for 3 weekly KHI-LHE-YYZ-LHE-KHI
1 aircraft for 4 weekly KHI-LHE-SNN-JFK-LHE-KHI

The 4 B772ERs would perform:

1 SPARE aircraft to cover for the B77Ls and B77W
1 for daily PEW-DXB + 4 weekly PEW-RUH
1 for 3 weekly KHI-LHR + 4 weekly ISB-LHR
1 for 3 weekly LHE-LHR + half aircraft spare as cover

The 12 A321s would perform:

1 aircraft for 4 daily KHI-LHE-KHI
1 aircraft for 4 daily KHI-ISB-KHI
1 aircraft for double daily KHI-PEW-LHE-PEW-KHI
1 aircraft for 6 weekly PEW-AUH + 3 weekly PEW-DMM + 3 weekly PEW-JED
1 aircraft for 4 weekly LHE-KWI + 3 weekly LHE-DMM
1 aircraft for daily LHE-MCT + daily LHE-BKK
1 aircraft for daily KHI-BKK-KUL (to be timed the same as LHE-BKK so that pax from both KHI + LHE can connect via BKK to KUL hence making BKK a small scissors hub)
1 aircraft for double daily KHI-DXB + daily KHI-MCT
1 aircraft for daily ISB-AUH + daily LHE-AUH
1 aircraft for 3 weekly ISB-DMM + 4 weekly ISB-MCT
0.5 aircraft for daily LHE-DOH
1.5 aircraft as SPARE back up in case of AOG/maintenance for A321s and A319s

[Edited 2013-09-14 02:28:21]

[Edited 2013-09-14 02:35:46]

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: 777way
Posted 2013-09-14 16:20:15 and read 3791 times.

Quoting MillwallSean (Reply 13):
Idris jala is a Sarawakien christian as well so its a brave step to have him invited to Pakistan.

what an ignorant thing to say, foreigners of all faiths visit Pakistan albeit in miniute numbers for business and other things, I see them at hotels including westerners.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: MillwallSean
Posted 2013-09-14 16:39:31 and read 3760 times.

Quoting 777way (Reply 15):
what an ignorant thing to say, foreigners of all faiths visit Pakistan albeit in miniute numbers for business and other things, I see them at hotels including westerners.

the brave step isnt that he is a christian but that he is not present management and one who took away alot of the priviliges and perks that present political cadres had gained in MH. They have now taken over the airline again and thus surprise surprise MH is posting losses again.
Inviting him means you effectively snub present MH management and their supporting ministers.

Him coming from Sarawak in East Malaysia and being christian means he isnt part of the groups and families that run Malaysia. he is an outsider having worked for Shell most of his life and thus wasnt corrupt or used to the political game or giving favours, enrichment of himself etc. this made him very disliked by certain parts of the management at MH.
Sold their nice London flats that the families could use whent hey flew in and when their kids studied etc.

Inviting him a minuster without portfolio is a brave step.

The friendlines towards visitors with other religions in pakistan, where i disagree with you, is for another thread.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: LAXintl
Posted 2013-09-14 17:16:56 and read 3707 times.

Comparison to Turkish has to do with the fact that TK not too long ago was a 50-aircraft loss making state airline as well, however in a relative short amount of time turned things around to great success.

PIA certainly wont grow to 200 aircraft or operate a large connecting hub, however as a nation Pakistan still has its own strengths not the least being is a significant home market. Pakistan is one of the worlds more populous states (180mil), so there certainly is upside to potential market demand needing to be served.

No reason why at some point the PIA cannot regain its reputation for professionalism, and restoring the brand while offering a respectable product and network.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: 777way
Posted 2013-09-14 17:57:03 and read 3659 times.

You can disagree all you like there are your types, yet there are loads who will vouch for the friendliness, but I thought you meant him being Christian and visiting Pakistan was an issue.

Quoting LAXintl (Reply 17):

Agree that's why I listed the airlines as examples of what PIA can be, I would love them to become like Saudia, definitely something they can aspire to.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: flightsimboy
Posted 2013-09-14 20:51:57 and read 3523 times.

Quoting behramjee (Reply 14):
2 B777-200LRs

Whatever happened to YYZ??? lol

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: behramjee
Posted 2013-09-15 01:44:58 and read 3410 times.

Quoting flightsimboy (Reply 19):
Whatever happened to YYZ??? lol


its mentioned as 3 weekly...see below

Quoting behramjee (Reply 14):
The 2 B77Ls would exclusively perform:

1 aircraft for 3 weekly KHI-LHE-YYZ-LHE-KHI
1 aircraft for 4 weekly KHI-LHE-SNN-JFK-LHE-KHI


Quoting LAXintl (Reply 17):
Comparison to Turkish has to do with the fact that TK not too long ago was a 50-aircraft loss making state airline as well, however in a relative short amount of time turned things around to great success.


very little chance of PIA returning to profitability over the next 3 years but losses can only be reduced through reduction of staff, fleet replacement of A310s / B733s and route network restructuring.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: aviasian
Posted 2013-09-15 19:24:13 and read 2949 times.

The notion of following a Malaysia Airlines model for running PIA must have germinated from some personal relationship between politicians ... doing this will certainly further impoverish PIA. Just see how unprofitable, asset-poor and poorly-planned Malaysia Airlines is compared with her competitors from all over Asia.

Hell ... even Biman Bangladesh Airlines appear to have better fleet-planning!

Malaysia Airlines' greatest experience is perhaps in its Business Turnaround Plan and all its subsequent permutations and evolutions. One after the other and in increasingly sexier references, they vouched to transform MH into a profitable premium carrier ... it hasn't been profitable in any sustained manner since ... and its service level has not been any more premium than it was before. It corporate identity transformation has been a disastrous confused mess, as was its plan for a premium regional carrier under Project Sapphire - tonnes of sexy names and references (much like reading those incredible advertisments for perfumes and fragrances in glossy airline inflight magazines).

I think Turkish Airlines certainly has some useful chapters in its books for PIA or even Garuda Indonesia.

KC Sim

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: mercure1
Posted 2013-09-15 22:21:32 and read 2858 times.

I have always been curious about the split in traffic between KHI / ISB / LHE.

It seems Pakistan does not really have a unified gateway hub any longer (I recall way back KHI seemed to be it) and now both regional and longhaul services are split up between multiple gateways, often at very low frequency.

It seems this might be another practical challenge for PIA as it ends up splitting its resources amongst so many cities.

Can Pakistan have a unified hub?

Also what is the traffic make up, and differences between KHI, ISB and LHE today?

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: flightsimboy
Posted 2013-09-16 03:31:31 and read 2722 times.

Quoting behramjee (Reply 20):

its mentioned as 3 weekly...see below

Thanks

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: behramjee
Posted 2013-09-16 04:10:32 and read 2675 times.

Quoting mercure1 (Reply 22):
Also what is the traffic make up, and differences between KHI, ISB and LHE today?

A vast majority of the traffic to/from PAK hails from the Punjab i.e. an area located between LHE and ISB in particular to the Middle East, Europe, UK and North America.

The only market segments where there is a higher demand to/from KHI versus LHE/ISB are as follows:

KHI-DXB
KHI-JED
KHI-JFK
KHI-YYZ
KHI-KUL
KHI-BKK

PIA can no longer afford to make KHI a hub as the GCC airlines in particular has killed its market share network wide from this city. From a competitive and higher yielding point of view, it is best suited in the long run for PK to establish LHE airport as a major hub connecting its Western routes via LHE to India/DAC/SE Asia.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: voodoo
Posted 2013-09-16 05:53:50 and read 2657 times.

Perhaps worthy of a separate thread, but I wonder how much the role of, and experience with, Shariah compliant financing has to do with some of these decisions. A quick google yields some interesting articles....e.g.:

http://www.gtreview.com/trade-financ...gets-Islamic-financing_10176.shtml

http://www.saudigazette.com.sa/index...me.regcon&contentid=20130402159483

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: bennett123
Posted 2013-09-16 15:00:47 and read 2420 times.

I seem to recall that most of the B747-300 fleet retired some time ago, (AP-BFV/BGG in 2007, and AP-BFY in 2011).

Did they return to service, or is it only for Hajj work.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: LAXintl
Posted 2013-09-16 18:32:27 and read 2329 times.

Quoting behramjee (Reply 24):
PIA can no longer afford to make KHI a hub as the GCC airlines in particular has killed its market share network wide from this city. From a competitive and higher yielding point of view, it is best suited in the long run for PK to establish LHE airport as a major hub connecting its Western routes via LHE to India/DAC/SE Asia.

OK on forgetting KHI even though its by far the most populated city, but how does the politics of ISB play into trying to develop a coherent hub operation?
I was always under the impression that growth and focus on ISB services were to please politicos since the relocation of the capital.

Its seems the geographic and population realities make it hard to serve the entire nation via a single gateway.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: 777way
Posted 2013-09-16 20:31:47 and read 2265 times.

Quoting bennett123 (Reply 26):

Atleast three are in active service, only one has been scrapped, one is grounded might get active and another has been phased out.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: A330243
Posted 2013-09-16 20:57:06 and read 2251 times.

Quoting LAXintl (Reply 27):
OK on forgetting KHI even though its by far the most populated city, but how does the politics of ISB play into trying to develop a coherent hub operation?
I was always under the impression that growth and focus on ISB services were to please politicos since the relocation of the capital.

The vast majority of UK bound traffic ex-Pakistan originates in ISB, with traffic to continental Europe split mostly among ISB and LHE with a smaller share from KHI. KHI accounts for most of the traffic to India/ Bangladesh and East Africa. Middle East and SE Asia traffic is split between KHI and LHE with a smaller amount from ISB.

Quoting behramjee (Reply 24):

The only market segments where there is a higher demand to/from KHI versus LHE/ISB are as follows:

KHI-DXB
KHI-JED
KHI-JFK
KHI-YYZ
KHI-KUL
KHI-BKK

KHI slso accounts for majority of traffic to DAC, India, and to Africa.

I thought NYC and YYZ had higher flows from LHE/ISB.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: behramjee
Posted 2013-09-17 00:08:02 and read 2105 times.

to South Africa, there is higher demand from LHE/ISB than there is from KHI.

The demand to/from DAC and India to PAK is minimal hence I didnt even bother mentioning it as they are not major market segments.

Quoting bennett123 (Reply 26):
I seem to recall that most of the B747-300 fleet retired some time ago, (AP-BFV/BGG in 2007, and AP-BFY in 2011).

B743s still operate domestic flights from KHI to ISB/LHE and selected flights to JED/RUH from LHE/ISB ! This will all end by Dec13 once the Hajj pilgrims return back home from Saudi Arabia.

Topic: RE: PIA To Be Privatized - Follow Malaysian Model
Username: 777way
Posted 2013-09-17 07:05:07 and read 1965 times.

Quoting behramjee (Reply 30):
B743s still operate domestic flights from KHI to ISB/LHE and selected flights to JED/RUH from LHE/ISB

Also KHI-JED and all flights from SKT-JED, however current schedule shows them as hajj flights only.

[Edited 2013-09-17 07:33:21]


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