Thursday, August 9, 2007

PIA, "The best waste of resources"

Asalaamu-Alykum,


Pakistan International Airlines, the the first Asian airline to granted FAA's maintenance approval, the first airline in world to have a scheduled helicopter service, and and PIA was the one to introduce a computer to the Islamic Republic of Pakistan when it installed an IBM1401, and not only that amongst many of the things it is known for is being the first airline that had in-flight movies on international routes. Looking at all these records one easily wonders what happened to PIA? Why did PIA go from being an innovator of idea, and a leader in industry to being in debt Rs. 28 bn?

Well the answer is simple, waste, wasting of resources, wasting money and not managing it well. Most of it comes in the form of having too many employees. PIA with only 42(43 after the delivery of Boeing 777-300ER in 2008) aircrafts flying to 66 destinations have close to 20,000 employees. While Japan Airlines, Asia's biggest airline has 135 aircrafts, 75 additional aircrafts that have been ordered and flies to nearly double, 125 destinations and still only has less than 18,000 employees.

All those employees, you'd think PIA get more work done, but not really. More than half of my experiences with PIA flights have been more than 7 hours late. Even with extra 14,000 employees PIA still can not get http://www.piac.com.pk to work properly, it is inconvenient, tedious, lacks information and I don't think it is ever updated.

There is a simple solution replace, delayer and downsize/expand, First step is to replace top management bring in some fresh minds with fresh ideas so PIA can be industry leader again. Next step delayer remove the different hierarchal positions to make communications faster and more reliable. Last step is downsize/expand, in other words buy more aircrafts to develop new routes to utilize the current good employees while downsizing and getting rid of the least productive employees, and Inshallah Pakistan International Airline will again become an industry leader it was.

Abu Abdullah,
The Doctor of Truth

Wednesday, August 8, 2007

E.U. Lifts ban on Eleven PIA Planes

Asalaamu-Alykum,


Pakistan International Airlines, was banned to fly into the European Union, consequentially PIA ended up losing more than Rs. 26.5 Billion. But recently European Union has lifted the ban from 11 additional airplanes.


A report published on July 5, 2007 in the Official Journal of the European Union stated "it is assessed that Pakistan International Airlines should be allowed to operate to the Community[European Union]." Now PIA, in addition to its Boeing 777s will now also be able to fly three of its Boeing 747-300's, each of which can carry 433 passengers, Two Boeing 747-200's, Which are configured to carry 298 passengers each, and Six Airbus 310's, which has the capacity to carry 198 passengers each.

With Pakistan 8* Boeing 777's including four 200-ER's able to hold 329 passengers each, two 200-LR's configured to seat 310 passengers each and two huge 300-ER which can carry 393 passengers per flight, after the completion of the procedures required by European Union Pakistan International Airline will have permission to fly 19 out of its 42 airplanes.

Even though the ban have been lifted it is not sure when PIA will be able to meet certified criteria, and resume its flights to European union. Once they do, it will again provide more competition and thus lower airfares for the customers.

Abu Abdullah,
The Doctor of Truth

*One of the Boeing 777-200ER is on lease from ILFC, and One more Boeing 777-300ER is due to be delivered in 2008

Tuesday, August 7, 2007

Pakistani economy Compare, Contrast and Analyze.

Asalaamu-Alykum,


I was recently wondering about Pakistan's Economy, so I decided to do a little research and I found some completely obvious and some utterly amazing answers.

Starting out with probably the least surprising is Pakistan's GDP per Capita, which sits at around $2600.00 per person as opposed to India's $3800(~150% of Pakistan's) or U.S.A. $44,000(~1700% of Pakistan's). But surprisingly India's GDP is not only 1.5 fold that of Pakistan but it is also growing at rate that is 139% of Pakistan. Pakistan GDP is growing at about 6.6% while India which is already ahead, is zooming at the rate of 9.2%. Not only India has achieved a greater economic success but it is en route to achieve some more. While America's GDP has reached near saturation and is growing at a mere rate of 3.2%

Another surprising fact is that Pakistan has a lower unemployment rate and poverty rate than India. India's unemployment rate is 7.8% while Pakistan is slightly behind at 6.5%. India has 25% of its population below poverty line while Pakistan has slightly less at 24%. Another major difference is the gini index(measure income inequality) of Pakistan is 41% while India is 32.5%. It means that there is a higher difference between income classes in Pakistan than in India. Pakistan has more rich-poor gradient than India.

Looking at all this you are probably wondering is that a solution to all this, Can Pakistan's Economy ever blossom? Well, the answer is always yes, but How? First of all Pakistan need increase it GDP growth rate, which can be accomplished by one of two ways. First Pakistan needs to increase exports and increase the income from outsourcing. The west has recently gotten a recent urge to outsource it programming and customer service contracts. India took a huge advantage of that and has made a lot of money from it while Pakistan is yet take advantage of it, primarily because India has a literacy rate of 61% while Pakistan only 50% that means India had more educated, English-speaking and unemployed people that Pakistan. But If Pakistan had a lower literacy rate than India therefore it must have a higher labor force, and since Pakistan has a higher gini index means there are a lot of rich people in Pakistan. Rich people+Poor labor force=Factories-->Jobs-->Exportable Goods-->Pakistan Success, Simple equation, basically rich gets richer, the poor get rich.

How do we get these Lazy and Rich people to make factories, simple TAX, if they have money that is not being used, they have to pay luxury-tax on it, any reasonable person will invest his money to make more money rather than give it away.


Abu Abdullah,
The Doctor of Truth

*All facts came from the CIA website.