The announcement of a new private airline, Air Karachi, applying for a Regular Public Transport (RPT) license from the Pakistan Civil Aviation Authority (PCAA) has sparked discussions about the feasibility of yet another private carrier in Pakistan’s already struggling aviation industry. With key shareholders including influential business figures such as Aqeel Karim Dhedhi, a leading stockbroker and investor; Arif Habib, a prominent businessman in Pakistan’s financial sector; SM Tanveer, an industrialist and former chairman of All Pakistan Textile Mills Association; Bashir Jan Muhammad, a seasoned businessman in the shipping and manufacturing industry; Khalid Tawab, a senior leader in the business community and former vice president of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI); Zubair Tufail, a businessman involved in the chemical sector; and Hamza Tabani, a notable entrepreneur, the financial backing of the airline appears strong. However, the broader question remains: Is there a real need for another airline in Pakistan, and can Air Karachi succeed where others have failed?
Pakistan’s aviation sector has seen multiple private airlines enter and exit the market. Air Indus, Bhoja Air, Shaheen Air, and Raji Aviation are just a few examples of airlines that launched with ambitious plans but ultimately ceased operations. The primary reasons for their failures included financial mismanagement, regulatory hurdles, poor customer service, and unsustainable operational costs. Additionally, heavy taxation on the aviation sector, fluctuating fuel prices, and limited access to profitable international routes have made survival difficult for private carriers.
One of the most notable attempts at establishing a private airline was Air Sial, founded by a group of Sialkot businessmen. The airline was launched in 2020 with the aim of catering to business and leisure travelers, particularly from industrial hubs like Sialkot, Faisalabad, and Karachi. Despite initial enthusiasm, Air Sial struggled with fleet expansion, regulatory challenges, and increasing operational costs. The airline remains operational but has not been able to make a significant impact on the market due to financial constraints and competitive pressure.
The domestic air travel market in Pakistan is significant but volatile. In 2023, the domestic aviation sector served around 6.5 million passengers, with major routes connecting Karachi, Lahore, Islamabad, and Peshawar. Business travel and tourism contribute substantially to this market, but both are heavily influenced by economic conditions and political stability. The ongoing economic crisis in Pakistan, marked by inflation and currency devaluation, has affected consumer spending power, making air travel less accessible for the average traveler.
PIA, the national carrier, has been unable to effectively fill the gap left by defunct private airlines. Struggling with financial losses, outdated aircraft, and frequent operational disruptions, PIA has lost consumer confidence. Its inability to modernize its fleet, improve service quality, and expand domestic and international routes has allowed room for new private airlines to enter the market. However, the challenges faced by PIA also serve as a cautionary tale for new entrants like Air Karachi.
A feasibility analysis of Air Karachi must consider key factors such as operational costs, competitive pricing, customer experience, and route selection. If the airline intends to focus on underserved domestic routes, there is potential for success, especially if it can provide reliable service and competitive fares. The perception of private airlines in Pakistan is mixed; while consumers seek better alternatives to PIA, they also remember the failures of previous private carriers, making trust and reputation critical factors for Air Karachi’s success.
Additionally, the international market could provide lucrative opportunities if Air Karachi secures permission to operate on key Gulf routes, catering to the large Pakistani expatriate workforce. However, this would require overcoming regulatory challenges and competing with established airlines such as Emirates, Qatar Airways, and Etihad.
Air Karachi’s financial backing is a significant advantage, but sustainable success will depend on its ability to navigate Pakistan’s complex aviation landscape. Effective management, strategic route planning, and superior customer service will be essential. If the airline can avoid the mistakes of its predecessors and address the gaps left by PIA, it could establish itself as a major player in Pakistan’s aviation industry.
The views expressed in this article are the author’s own and do not necessarily reflect Coverpage’s editorial stance.
