When you have an open sky policy, sky is the limit!

Jinnah International: Still a potential global hub but waiting for the right policy!

The distance between Dubai and any major airport in Pakistan, say Lahore’s Allama Iqbal International, stays the same regardless of the direction of travel.  Whether you are travelling to Dubai from Lahore or to Lahore from Dubai, a typical airline would consume roughly same amount of fuel (ignoring the tail wind speed), will present same amount of food, and will employ similarly skilled staff. The logical conclusion: the airline should charge equal or approximately same prices to an average passenger both ways. However, when the prices of one-way travel are two to three times those of the other leg of the journey, there is something wrong somewhere.

In my recent journey to Dubai, I discovered that, on average, it costs a passenger at least twice, when travelling from any airport in Pakistan to Dubai than if the same passenger gets the ticket from Dubai to Pakistan. And this is true to all airlines. The major difference is that the airlines arriving at Pakistani airports are subject to disproportionately higher taxes, duties and operational costs than those arriving at Dubai airports.

The Civil Aviation Authority in Pakistan certainly does not have world’s best airport facilities nor does it hire the world’s finest brains. What ails it, is the government tendency to exploit the customers without any regard to its comparative quality of services. One instance is the sudden imposition and collection of additional airport taxes which have been slapped on all passengers disembarking from Pakistani airports these days.

It is well known that just before Dubai International was envisioned by the Emirati rulers as the world’s leading hub connecting the West with the Far East, in early eighties, that position was safely occupied by Jinnah International at Karachi. Despite being located at a geographically inferior location to Karachi, Dubai soon replaced it as the world’s preferred hub in this region. It primarily happened due to bad policy choices by the federal government that opted for higher taxes, increased costs and more red tape, thus flying away all major airlines of the world, one after the other.

 

Adopting an open sky policy has bode well for Dubai.

From now till 2020, 98.5 million passengers and over four million tonnes of air freight will pass through Dubai airports. At that time, aviation will generate 32% of Dubai’s GDP and 22% of its employment. The secret is captured in this line from Sheikh Ahmed bin Saeed Al Maktoum, President of Civil Aviation Authority, Chairman of Dubai Airports and Chief Executive of Emirates Airlines and Group: “Dubai has a model that recognizes aviation’s strategic importance. It starts with an open skies policy, competitive rates and a tax-free environment…”

If Pakistan could still open up its skies, make it competitive, and reduce its taxes and operative costs, it will be able to reap benefits from renewed air traffic across the globe that has remained under recession following 9/11. In the aviation industry, sky is the limit for those who have chosen to open up their skies.

Contributed by Ali Salman

About Ali Salman

Ali Salman is a founding member of Economic Freedom Network Pakistan. He works as a principal consultant at Development Pool, a socio-economic consultancy firm based out of Islamabad. He can be contacted at ali.salman@developmentpool.org.
This entry was posted in Competition and tagged , , , , , . Bookmark the permalink.

2 Responses to When you have an open sky policy, sky is the limit!

  1. Zubair Ahmed Malik . Chief Coordinator Economic Freedom Network Pakistan. says:

    Sorry the distance between Dubai and Lahore may be the same but the fuel consumption does not depend only on tail wind and speed there are other factors to, like type of aircraft, load factor, number and type of engines,weather , cruising spped and altitude etc etc. So you see the amount of fuel consumed in each case will differ, skilled and unskilled manpower per aircraft also adds up to the cost factor like our national airline has nearly 450 person per aircraft whereas average employment is around 150 to 165 person per aircraft. Yes I do agree Civil Aviation charges are exorbitant and that is the major reason we have lost many airline who know prefer landings at Bombay and New Delhi instead of Karachi and Lahore. Its only in Pakistan that the Civil Aviation Authority is assuming multiple roles e.g. Operator, Regulator and Investigator. Pakistan does have Open Sky Policy like Dubai but it has failed to reap the benefits of open sky policies Why ? making policy is one thing and implementing that policy is another ! In Pakistan we believe in concentration of power and authority in one hand in this case Civil Aviation Authority. till be start believing in deregulation and sharing of responsibility , building institutions and not individuals nothing will change no matter how good the Policy may be .

    • Ali Salman says:

      Mr. Zubair Malik raises an important point by pointing out towards the concentration of roles in CAA. That may well be a reason of the problems pointed out earlier. One wonders how the Civil Aviation Authorities in other countries are organized with respect to division of responsibilities.