Daily Times, 18 Nov. 2007

KARACHI: Airblue will start its major flight expansion programme from July 2009 onward after receiving the recently ordered aircraft, said Shahid Khaqan Abbasi, Chief Operation Officer (COO), Airblue.

“The government has granted us permission to operate flights for Jordan, Qatar and Kuwait,” Mr. Abbasi said in an interview to the Daily Times here Saturday. Briefing Airblue’s future strategy, Mr Abbasi said that the biggest private airline of the country has contracted to purchase 14 advanced A-320 aircrafts with the investment of $910 million aimed to expand business (flight operations) on international and domestic routes.

“It will be the second biggest investment in aviation industry of the country after PIA’s deal with Boeing to purchase eight 777-aircraft at a cost at $1.2 billion,” he claimed. According to the Airblue chief, the revenue of private national airlines is equal to one-sixth revenue of Pakistan International Airlines. “I estimated that Airblue will grow its revenue from $250 million to $400 million in the current fiscal year,” he said.

While referring to the population growth of the country and traveling of foreigners in the country, he said that country’s airlines should posses at least 150 advanced aircraft to facilitate its passenger, but, unfortunately it has nearly 60 aircraft and most of them are not advanced and cost-efficient. “You have to buildup capacity in order to make flourishing and healthy aviation industry because whenever the new airline emerges in the market, the volume of growth marks a significant change,” Mr Abbasi elaborated.

He said aviation industry is one of the highly competitive sectors in the world whereby establishing airlines companies are the most risky in nature and needs huge investment. In developing country like Pakistan, running airlines business profitably is a challenge as many private airlines have failed to survive in a short period of time.

Airblue chief observed that there is a big potential and handsome business opportunities for national airlines in the global aviation industry. But, he pointed out that establishing an airline company is highly risky task and needs a strong financial backing. He said with the entry of Airblue the country’s aviation industry witnessed 30 percent growth just in the first year. Now, the growth of aviation industry stands at 10 to 11 percent per annum with major contribution by Airblue.

Airblue carried out its first flight on June 18, 2004 on the domestic routes. It is now operating four international flights on daily basis and more than 20 nationwide flights weekly with its six aircraft in operation. Since its establishment, Airblue has made market of more than 1.2 million passengers in the country, Abbasi claimed.

He lauded the role of Civil Aviation Authority (CAA) for facilitating private airline companies and emphasized to formulate new “Aviation Policy” to strengthen the market’s competition among the international and national airlines. In his views, the aviation is a service industry so an airline company needs to maintain its standards among the passengers in order to compete with other national and international airlines. There is no problem for any new entrant airlines but customers definitely avail the benefits from competition, he explained. On the other hand, he stressed that the role of aviation regulator should be limited in the open skies market. “Fares are dictated by the market forces and if any restriction is imposed on airlines regarding fares and freight matters, it will collapse the market,” the Airblue COO observed. Airblue will start its domestic flights on the routes of Sialkot and Multan by next year and it has set the target to initiate flight operations on daily basis on the other domestic routes like Quetta, Islamabad, Lahore and Gawader.

Abbasi, who is also former chairman of PIA, expressed his wish to make contribution in the Hajj flights services throughout the country and claimed that Airblue has enough capabilities to run Hajj flights operations better than PIA.

He urged the government to promote tourism in the country, which will indirectly benefit the aviation industry as well passengers.

As far as surging airfares are concern, he pointed out that the prices of air fuel in the global market has compelled airlines companies to increase their fares with a proportion keeping the market’s dynamics of supply and demand. “When we (Airblue) started our airline we were purchasing Jet-fuel at Rs 16 per liter but now we are buying the same fuel at Rs 51 per liter,” he said adding “we could not pass on the entire burden of price surge to our passengers, but the problem is we cannot hedge oil at this stage as it is very risky as Airblue could not afford it.” Regarding human resource of the industry, Airblue COO said that Pakistan has very limited human resource and the airlines companies had to train them through massive investment. “Pilots are very few in number and they are trained from foreign country, where as ground engineers, cabin crew have also been prepared by Airblue itself at very high cost,” he added.

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