CHAPTER # 1

INTRODUCTION
1.1 Back Ground Of Study
As part of the academic requirement for completing Bachelor of
Business Administration ( Honors) the students are required to under go 8
weeks of internship with any reputed organization. The internship is to serve
the purpose of acquainting the students with practicing knowledge of the
discipline of business Administration. This report is about Pakistan
International Airlines. Pakistan International Airline was formed on March
11,1955 which was previously a private Airline operating with the name of
Orient Airways. PIA has expended its network, becoming the largest
commercial Airline in Pakistan. Offering unique services to it’s customers,
both at Domestic and International Network.
1.2 Purpose Of The Study
The main purpose of the study in hand is to gather relevant information
to compile internship report on Pakistan International Airlines.

1. To observe, analyze and interpret the relevant data competently and in a

useful manner.
2. To know how to practically work in an organization.
3. To develop interpersonal communication.

1. 3 Scope Of Study
As an internee in PIA the main focus of my internship was on Finance
Department. I included all the concerned sections in which I learned how to
make different types of reports and I was given different responsibilities for
certain durations. I have written about these in Finance Sections Chapter.

Accordingly, different sections of PIA are also covered in this report.

1.4 Methodology Of Study
The report is based on my two months internship program in PIA
Islamabad/ Rawalpindi Station. The methodology reported for collection of
data is primary as well as secondary data. The primary source of information
is my personal observation while working with staff and having discussion
with them. Formally arranged interviews and discussions also helped me in
this regards. Specially, in Finance Section and I also spent time in HRM and
Marketing department to get the relevant information about certain topics.

1
1.4.1 Primary Data:
 Personal observation
 Interviews of staff
 Lectures by Finance Manager
 Practical work
1.4.2 Secondary Data:
 Annual Reports 2006, 2007 and 2008.
 Newspapers.
 Finance Manuals.
 Internet www.piac.com.pk www.wikipedia.org. www.google.com

2
CHAPTER# 2
HISTORICAL BACKGROUND OF PIA

2.1 HISTORY OF PIA.

2.1.1 Birth of a Nation, Birth of an Airline
Air transport has probably never been more important to the
development of a new nation than in the case of Pakistan. In June 1946, when
Pakistan was still in the offing, Mr. Mohammad Ali Jinnah, the Founder of the
upcoming nation, instructed Mr. M.A. Ispahani, a leading industrialist, to set
up a national airline, on a priority basis. With his singular vision and foresight,
Mr. Jinnah realized that with the formation of the two wings of Pakistan,
separated by 1100 miles, a swift and efficient mode of transport was
imperative
2.1.2 Orient Airways Takes to the Skies
On 23rd October 1946, a new airline was born. Initially registered as a
pilot project in Calcutta, Orient Airways Ltd. had at its helm Mr. M.A.
Ispahani as Chairman and Air Vice Marshal O.K. Carter as General Manager.
The new carrier's base remained in Calcutta and an operating license was
obtained in May 1947.Four Douglas DC-3s were purchased from Tempo of
Texas in February 1947 and operations commenced on 4th June 1947.

The designated route for Orient Airways was Calcutta-Akyab-Rangoon,

which also happened to be the first post-war international sector to be flown
by an airline registered in India. Within two months of Orient Airways'
operational beginnings, Pakistan was born. The birth of a new nation generated
one of the largest transfers of population in the history of mankind.

Orient Airways, along with the help of BOAC aircraft which had been
chartered by the Government of Pakistan, started relief operations and
transportation of people between Delhi and Karachi, the two capitals.
Subsequently, Orient Airways transferred its base to Pakistan and established a

3
 vital link between Karachi and Dacca, the two capitals of the two wings of
Pakistan. With a skeleton fleet of just two DC-3s, three crew members, and
twelve mechanics, Orient Airways launched its scheduled operations. The
initial routes were Karachi-Lahore-Peshawar, Karachi-Quetta-Lahore and
Karachi-Delhi Calcutta-Dacca. By the end of 1949, Orient Airways had
acquired 10 DC-3s and 3 Convair 240s which were operated on these routes.
In 1950, it had become increasingly apparent that additional capacity would
have to be inducted to cater to the growing needs of the sub-continent.

2.1.3 A New National Flag Carrier for Pakistan

Orient Airways was a privately owned
company, with limited capital and resources. It
could not be expected to grow and expand
independently. It was then that the
Government of Pakistan decided to form a
state-owned airline and invited Orient
Airways to merge with it. The outcome of the
merger was the birth of a new airline, named Pakistan International Airlines
(PIA) on 11 March, 1955.

In addition to transport activities,

Orient Airways had established the
nucleus of overhaul and maintenance
facilities and acquired trained pilots,
engineers and technicians, these measures
proved to be a great asset for PIA during
its teething phase.
2.1.4 PIA’s First International Service
The year 1955 also marked the
inauguration of the fledgling airline's first
scheduled international service - to the
glittering, glitzy capital city of London,
via Cairo and Rome. Initially, there was

4
 much criticism, as the public could not comprehend or justify the need to
operate an international route when, in their opinion, other projects vital for a
developing country should have been given a higher priority. However, PIA's
focus was, and continues to be, to serve the Pakistani community at large. The
provision of transportation to expatriates has remained one of the foremost
priorities of the national airline. Moreover, PIA earned substantial foreign
exchange through international services, which it invested in the purchase of
aircraft and spare parts, as fleet expansion was a grave necessity for the airline
2.1.5 New Planes, New Directions, New Management
In 1956, orders were placed for
two Super Constellations and five
Viscounts which were to be delivered in
1959. At this juncture, PIA possessed a
small fleet which comprised of Convairs,
Viscounts, Super Constellations and DC-
3s.

While Mr. M.A. Ispahani was the first Chairman of the new dynamic
airline; it was the first Managing Director of PIA, Mr. Zafar-ul-Ahsan, who in
his 4 year tenure, got the ball truly rolling and set the shape of things to come.
The PIA Head Office building at Karachi Airport, which houses all the major
departments of the airline, was the brain-child of Mr. Zafar-ul- Ahsan. In fact,
on his departure from the airline, the employees presented him with a silver
replica of the building with the caption,
"The House You Built".

In 1959, the Government of

Pakistan appointed Air Commodore Nur
Khan as the Managing Director of PIA.
With his visionary leadership, PIA 'took
off' and within a short span of 6 years,
gained the stature and status of one of the world's frontline carriers. In aviation
circles, this period has often been referred to as the "golden years of PIA".

5
 Development, expansion, and growth were keywords that the new
management was committed to. In March 1960, PIA launched its first Boeing
707 jet service on the London-Karachi-Dacca, route which later proved to be
very successful. This trail-blazing accomplishment resulted in PIA becoming
the first Asian Airline to operate a jet aircraft, setting trends for the future. In
1961, the airline took on the mammoth task of initiating a cross-Atlantic
service from Karachi to New York. By this time, PIA had placed orders for
more new aircraft, which included Fokker F-27s, Boeing 720Bs and Sikorsky
helicopters. Helicopter services in East Pakistan had gained momentum by
1962 and expanded to include Sylhet, Chittagong, Dacca, Comilla and Ishurdi.
PIA's helicopter services carried over 70,000 passengers during the first year
of operation. At the time, it was regarded as a stellar operation, equal to any
other in the world. Unfortunately, due to two mishaps, the service was
discontinued in 1966.

2.1.6 Historic Firsts and Unbroken Records

In 1962, finding the upper winds forecast favorable, PIA set out to
break the record for the fastest flight between London and Karachi. With
representatives of FAI (Federation Aeronautique International) on board to
monitor the official timings, PIA completed the flight in 6 hours, 43 minutes,
51 seconds, a record which remains unbroken to this day.

In 1964, PIA achieved another historic first, regarded as a major

milestones in the chequered history of the airline. On 29th April, 1964, with a
Boeing 720B, PIA earned the distinction of becoming the first airline from a
non-communist country to fly into the People’s Republic of China. PIA's first
service to China was from Karachi to Shanghai via Canton. In 1964-65, PIA
expanded its fleet further with the addition of a fourth Boeing 720B and two
Fokker F-27s. Serious development had become a reality and the PIA team
continued to move ahead with ambitious plans and goals for the national flag
carrier.

6
 A collective pride and a joyous buoyancy was pervasive within the PIA
family. Riding high on the crest of success, PIA became a household name in
Pakistan in the mid sixties. The war between India and Pakistan, during 1965,
further tested the national airline. PIA played a major role in providing
logistical support to the Armed Forces by operating special flights using
Boeings, Super Constellations, and Viscounts. The Founder of the Nation, Mr.
Jinnah had predicted that the Pakistan Air force would need the support of a
civil airline in special circumstances, and this came into evidence during the
war.

In 1966, a system of feeder services linking eight new points in West

Pakistan was introduced. By this time, the airline's Viscounts were proving
inadequate owing to traffic growth, and had to be replaced by Tridents. The
airline continued up the growth curve, receiving two Fokker F-27s, two
Boeing 707s and one Trident in the following year
2.1.7 Style, Glamour, and Charisma
Around this time, the airline saw
a change in the top slot. Air Vice
Marshal, Asghar Khan took over the
reigns of PIA for a tenure of 3 years. A
number of highpoints are attributed to
this period. The most colorful, if not the
most significant, occurrence for PIA was
the introduction of a new air-hostesses'
uniform designed by none other than the
renowned French designer, Pierre
Cardin. Taking the aviation world by
storm, this move, more than any other
single factor, imprinted PIA's name on
the international market. The uniforms
were an instant hit, both at home and
abroad.

7
2.1.8 The Pursuit of Excellence Through Technology and Quality
Control
Not content with a number of historic firsts under its belt, PIA made
history yet again, by installing Pakistan's first computer, an IBM1401, in 1967.
PIA's first Engine Overhaul Shop, located near the Head Office building, was
also completed and commissioned around this time. The Ground Training
School (GTS) now known as the PIA Training Centre, was first conceived and
developed during 1961-62. Interestingly, training was initially imparted in the
T-shaped building which has now become the PIA Dispensary, close to the
Head Office building.

Besides visible development and growth in traffic and revenues in the

sixties, PIA added additional destinations, new equipment, and cutting-edge
technology to support its ever expanding operations. A new Jet Hangar for
Boeings with a supporting airframe overhaul shop was completed and
commissioned in 1968.

In 1970, PIA set up its own Flight Kitchen in Karachi, which caters,
even today, to the national airline as well as other carriers. Over the years, with
the airline's expansion and increased capacity, the need for a second Flight
Kitchen became imperative.

2.1.9 Ushering In a New Era of Growth and Development

PIA heralded the nineties by
donning a bright new corporate
identity. Old-timers may remember the
flutter that the earlier green and gold
livery had created when it was first
introduced in 1974. However, in
keeping with the changing times, PIA
introduced a smart, sporty 90's look.
The familiar PIA green was reinforced
with moss green and pale blue stripes

8
were incorporated into the new corporate identity. The stripes, a universal
symbol of sport, highlighted PIA's active participation and sponsorship of a
diverse range of national games. PIA's players have always been at the
forefront of Pakistani Cricket, Hockey, Squash, Football, Chess, Bridge, Polo
and Table-Tennis teams. The nineties also saw the expansion of PIA's massive
Haj and Umrah operations to Pakistan's smaller cities, in addition to the major
cities of Islamabad, Peshawar, Lahore, Quetta and Karachi.

PIA's growth continues unabated and the airline now operates globally,
covering the entire domestic landscape and international destinations spread
over 4 continents. Impressive statistics for a comparatively young airline.
Since its inception in 1955, PIA has indeed, come a long way.

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2.2 HISTORIC ACHIEVEMENTS OF PIA

• First airline from an Asian country to fly the Super Constellation.

• First Asian airline to operate a jet aircraft.
• First Asian airline to be granted maintenance approval by the US Federal
Aviation Administration (FAA) and the Air Registration Board, predecessor of
the British Civil Aviation Authority (CAA).
• First non-communist airline to fly to the People's Republic of China, and
operate a service between Asia and Europe via Moscow.
• First airline in Asia to induct the new technology Boeing 737-300 aircraft.
• First airline in the world to operate scheduled helicopter services.
• First airline to show in-flight movies on international routes.
• The first airline in South Asia to introduce auto-ticketing facility.
• The first airline in the world to fly to Tashkent, capital of the newly
independent state of Uzbekistan.
• First airline in the world to start Air Safari with jet aircraft.
• First Asian airline to start flights to Oslo, the capital city of Norway.
• First airline in the world to induct the Boeing 777-200LR, the world's longest
range commercial airliner.
• First airline in the world to take delivery of the Boeing 777-200LR Worldliner
(Longer Range Variant).
• Pakistan International Airlines Flight Services Department was awarded the
ISO 9001:2000 certification award during May 2006.
• First airline in Pakistan to operate a flight with an all female crew at command
and in the cabin.
• First airline in the world to operate the Boeing 777-200ER, 777-200LR and
777-300ER altogether - all the three variants available on the market.
• PIA Flight Kitchens in Karachi were awarded the HACCP Certificate. (Hazard
Analysis and Critical Conrol Points)

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2.3 CURRENT FLEET OF PAKISTAN INTERNATIONAL
AIRLINE.

Passenger
Type Total (Business/Economy Routes Notes
Plus*/Economy)

184
long, medium and short haul
(12/40/132) 6 leased from
Airbus (Europe, Far East, Gulf,
12 205 Airbus
A310-300 Subcontinent and Domestic
(18/43/144) industriee
routs)
(18/45/142)

short haul
ATR 42- 48
7 Domestic, Afghanistan and
500 (0/8/40)
Gulf

medium and short haul

118 Afghanistan, Gulf, Indian and
Boeing (0/24/94) Domestic Cities
6
737-300 119
(0/27/92)

medium and short haul

Boeing
298 ————————
747-200 1
(38/30/196) Far East, and Domestic
Combi
Destinations

Boeing 433 medium and short haul 1 of which is

5
747-300 (45/60/328) Saudi Arabia and Domestic stored

Boeing 4 320 long, medium and short haul 1 of which

777- (35/45/240) (Europe, Saudi Arabia USA is leased from
200ER 329 and Domestic ILFC

11
 (35/54/240)

long, medium, short and

Boeing
310 ultra-long haul (North
777- 2
(35/60/215) America, Europe, Saudi Arabia
200LR
and Domestic)

Boeing long, medium and short haul

393
777- 3 (Europe , North America, and
(35/54/304)
300ER Domestic )

Updated
40 February
2009

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2.4.1 Vision
PIA's vision is to be a world class airline exceeding customer
expectations through dedicated employees, committed to excellence.
2.4.2 Mission
 Employee teams will contribute towards making PIA a global
airline of choice:
 Offering quality customer services and innovative products
 Participating in global alliances
 Using state-of-the-art technologies
 Ensuring cost-effective measures in procurement and operations

13
2.5. Values
Customer Expectations

Convenience, Caring, and Competitive Tariff

Service

Personalized and Courteous

Innovation

Cherishing New Ideas, Translated Into Action

Cohesiveness

Respect for Individuals, Teamwork, and Effective Communication

Integrity

Business Ethics, Accountability, and Transparency

Reliability

Loyalty and Consistency

Safety

Passengers, Employees, Environment, and Health

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 CHAPTER # 3
3.1 ORGANIZATIONAL STRUCTURE OF PIA

CHAIRMAN
PIAC

SA to Chairman Secretary PIAC

Managing Director

Director Precision Chief Operating Director Coordination/

Engineering Officer SA to MD

Director Airport Services Director Director

Flight Operation’s
Administration

Director Network & Route

Director Flight Services Director Finance Planning

Director Cargo Sale &

Director Engineering
Service Director Marketing

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 3.2 ORGANIZATION STRUCTURE – PIAC ISLAMABAD OFFICE

Admin DISTRICT
Officer
MANAGER

Ticket Officer Passenger Sales Public Relation

Manager Manager Manager

Cargo Sales
Manager Tours
Finance Manager
Promotion
Manager

3.3 MANAGEMENT OF PIAC

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Managing Director
Captain Mohammad Aijaz Haroon
Chief Financial Officer
Mr. Arif Majeed
Director - Corporate Planning
Mr. Shahnawaz Rehman
Director - Engineering and Maintenance
Mr. Maqsood Ahmed
Director - Finance
Muhammad Ziyad A Syed
Director - Flight Operations
Capt. Shuja Naqvi
Director - Information Technology
Mr. Shahid Sarwar
Director - Human Resource & Administration
Mr. Hanif Pathan
Director - Marketing
Mr. Salah uddin
Director - Precision Engineering Complex
AVM Muhammad Kamal Alam Siddiqui
Director - Procurement, Logistics and Food Services
Mr. Imran Ahmed Khan
Director - Training and Development
Mr. Dilawar Farid Baig
Director
Mr. S. Kamran Hasan

3.4 BOARD OF DIRECTORS

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Ch. Ahmed Mukhtar
Minister for Defence and Chairman - PIA

Syed Naseer Ahmed

Malik Nazir Ahmed

Mr Javed Akhtar

Lt. Gen (Retd) Syed Athar Ali

Federal Secretary Defence
Capt. Mohammad Aijaz Haroon
Managing Director – PIA

Prof. Mian Ijaz ul Hassan

Mr Mubashir Iftikhar

Dr. Waqar Masood Khan

Federal Secretary Finance
Mr Husain Lawai

Mr Shaukat Ali Rana

Mr Muhammad Shuaib
Secretary-PIA

3.5 DOMESTIC NETWORK OF PIAC

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Islamabad - Rawalpindi (Benazir Bhutto • Northern Areas
International Airport) Hub o Gilgit
o Skardu

North West Frontier Province (NWFP) • Sindh

o Hyderabad
o Chitral o Karachi (Jinnah
o Dera Ismail Khan International Airport) Hub
o Moenjodaro
o Peshawar (Peshawar o Sukkur
International Airport) Focus
City
• Punjab • Balochistan
o Bahawalpur o Dalbandin
o Dera Ghazi Khan o Gwadar
o Faisalabad o Panjgur
o Lahore Hub o Quetta
o Multan o Turbat
o Rahim Yar Khan

o Sialkot

3.6 INTERNATIONAL NETWORK OF PIAC

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INTERNATIONAL DESTINATIONS OF PIAC

20
South East Asia North America

• Malaysia • Canada
o Kuala Lumpur o Toronto
• Thailand • United States
o New York City (JFK)
o Bangkok

Southwest Asia Europe

• Bahrain • Denmark
o Manama o Copenhagen
• Kuwait • France
o Kuwait City o Paris
• Oman • Ireland
o Muscat o Dublin [plan to start
• Qatar Summer 2009/pending
o Doha Dammam approval]
o Jeddah • Italy
o Riyadh o Milan
• United Arab Emirates • Netherlands
o Abu Dhabi o Amsterdam
o Dubai • Norway
o Sharjah o Oslo
• Russia
o Moscow (Sheremetyevo
Airport)
• Spain
o Barcelona
• Turkey
o Istanbul
• United Kingdom
o Birmingham
o Glasgow
o Leeds/Bradford
o London (Heathrow &
Stansted Airport)

o Manchester

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CHAPTER # 4

DEPARTMENTS OF PIAC

PIAC Airline has been divided into the following function units.

 Network & Route Planning

 Administration

 Finance

 Marketing

 Engineering

 Flight Operations

 Airport Services

 Cargo Sales & Services

 Precision Engineering Complex

 Flight Services

 Coordination

4.1 Network & Route Planning Department

This department carries out formulation and implementation of overall
corporate plans. This department provides guidelines to each
division/department to fix their goals and formulate strategies to achieve them.
It has the following subdivisions:
 International and Civil Aviation Affairs Division

 Economic Planning Division

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  Fleet Planning Division

4.2 Administration Department

Administration department is one of the pivotal departments, which is
responsible for the administration of human resources and formulation of the
corporate personnel policies; it has coordinating and regulatory body, which
regulates relationship between management and employees. Further
subdivision is as under:
 Human Resource Division

 Personnel Division

 PIA Training Center

 Policies and Remuneration Division

 Security Services Division

 Medical Services Division

 Industrial Relations Division

 Legal Services Division

 Sports Division

4.3 Finance Department

Finance department is one of the biggest departments in the airline,
which is responsible for provision of efficient and effective accounting/budget.
The feasibility of extending financial, administrative, technical facilities is
control by this department. It is also responsible for internal auditor of PIAC.
It has further divisions, which are as under:

 Planning and Budget

 Funds Management

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  Accounting

 Internal Audit

4.4 Marketing Department

It looks after development of Marketing Plans & Policies. This department
performs all marketing functions. Subdivision is given below:
 North (KHE) Division

 South (KHI) Division

 UK (LON) Division

 USA & Canada (NYC)

 Europe (FRA) Division

 Saudi Arabia (JED) Division

 Asia Pacific (SIN)

 Cargo Sales Division

 Market Planning & Services Division

 Gulf (DXB) Division

 Passenger Sales Division

 Reservation & Yield Management Division

4.5 Engineering Department

This department takes care of planning, base/line maintenance and
overhauling of whole of the PIA’s fleet. To keep pace with the new technology,
it has a special branch named as “Development Engineering” to meet the
future challenges in the sphere of avionics. Following are its further
subdivisions:

24
  Planning and Project Division

 Quality Assurance Division

 Avionics and overhaul Division

 Base Maintenance Division

 Line Maintenance Division

 Development Engineering Division

 Power Plant Division

 Resource Management Division

 North Division

4.6 Flight Operations Department

This department coordinates the training, flight engineering, planning
and scheduling of flight operations. It is responsible for all the activities of the
flight operation in PIA and ensured central control over all flights. The
department has been organized on the following line:
 Flight Engineering Division

 Standards Division

 Central Control Division

 Planning & Scheduling Division

 Technical Division

 Coordination Division

 Training Division

 North Division

25
4.7 Airport Services Department

Customer Services Department has two subdivisions, which are given blow:

4.7.1 Passenger Services Division

As the name implies, this division is responsible to provide services to

the passengers as well as aircraft at the airport. This subdivision in addition to
the Passenger Services also possesses Facilitation & Planning, Technical
Ground Support (TGS) and Terminal Services (KCI).
4.7.2 Flight Services Division

This subdivision provides for provisioning of all in-flight services like

food, cabin crew and field services.

4.8 Coordination Department

The purpose of Coordination Department, which is headed by Director
Coordination, is to coordinate all matters received through Government of
Pakistan. Co-ordination playing very important role in airlines so PIAC as has
well established co-ordination department so it may run it’s business affairs
swiftly. Which brings more productivity and positive working relations with
the Government departments.

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CHAPTER # 5
FINANCE DEPARTMENT OF PIAC.
The duties and functions of a typical finance department can be classified
into two generic categories. The first category is PLANNING and the second
function is CONTROLLING. These activities are inter-related and inseparable
because if there is no planning these will not be any control. Therefore, planning
and control move together.
Planning refers to the activities, which bridge the gap from the starting
point to the terminal point. Planning in the finance department under review refers
to the activities of Cash Flow and Budget preparation. These are the major
activities (planning) in any such department.
5.1 FUNCITOSN OF FINANCE DEPARTMETN

5.1.1 Planning
Planning is fundamental to the management process, a process of
sensitizing an organization to external opportunities and threats, of determining
desirable and possible objectives, and of deploying resources to match the
objectives. Without planning there is no basis for controlling for planning
provides the foundation upon which the control function operates. The planner
should be able to visualize the proposed pattern of activities individually and
collectively, internally and externally.
5.1.2 Budgets
The budget is not only the most important plan of an enterprise, but also
the basic link of accounting with management. The use of budgets, particularly in

27
 connection with the control phase of management has been termed as “budgetary
control”. A company’s organization chart and its chart of accounts from the basic
framework on which to build a coordinated and efficient system of managerial
planning and budgetary control. The organization chart defines the functional
responsibilities for the budgets rests with executive management, all managers
are, responsible for the preparation and execution of their departmental budgets. If
a budgetary control system is to be successful, these managers must fully
cooperate and must understand their role in making the budget system successful.
5.1.3 Controlling
This function of the finance department is carried out in the light of
standards set in the planning stage. The actual performance is compared with the
preplanned objectives and standards, which lead to the rectification of any
deviation and improvement suggestions, which will assist in the future planning.
Management control is the systematic effort by the business management to
compare performance to plans the control function is of prime importance in the
accomplishment of objectives. The need for control increases with the size and
complexity of the organization. Continuous supervision of an activity, task, or job
is required to keep it within previously defined boundaries. These boundaries
termed and “budgets” in the planning phase, are set up for manufacturing,
marketing, finance and all other activities. Actual results are measure against
plans; and if significant differences are noted, remedial actions are taken.
5.2 Department of Finance
Out of the nine divisions in the department “Revenue Division” is the
most important division. Some of the important divisions/sections are
described below in detail.
5.2.1 Revenue Division
Airline sells space and services and these are measured in terms of money.
Revenue division controls the revenue in terms of money. It is further subdivided
into these sections:
a) Passenger Revenue

28
 b) Cargo Revenue
c) Interline Revenue
d) Pricing
For each type of the revenue stream there is an independent unit. So Revenue
Division is discussed in units:

A. Passenger Revenue:
i. Sales: Revenue function starts from printing of tickets. Thickets of
airline contains few coupons with a jacket (bearing instruction on it)
tickets are sold at station and at agents offices. Sales of tickets may be:
(a) Direct Sale or
(b) Indirect Sale
Direct sales mean sale at stations of PIAC, whereas indirect sales are by agents.
a) Direct Sale

There are many locations for direct sales all over network of PIA. Three
types of ticketing are practiced i.e. manual ticketing and auto ticketing and
E-Ticket. Manual ticketing involves procedures of pencil paper work on
printed tickets. Whereas auto ticketing involves advance system of
computerized ticketing and on the spot computerized ticket printing.
Regarding direct sales following four documents are important:
i. Passenger Revenue/Extra Baggage Carrier Ticket:

The ticket has four/three coupons. First is audit coupon, second is issue
office coupon, third flight/lift coupon and fourth the revenue coupon. Flight
coupons are arranged for one/two or four sectors. Audit coupon and flight
coupons are most important coupons. Because flight coupon is the only
coupon to be used either for lift, or for refund/reissue/travel on non-PK
carrier, etc. whereas as audit coupon is meant for PIA’s revenue record.

29
 Audit coupons are sent to head office with sales statements from each
station. Accounting to entry is based on audit coupon.
ii. Miscellaneous charges order (MCO):

These documents contain, audit issue office and exchange coupons,

these are meant for exchange if for the time being you don’t want to travel

but want to block a seat. Or if you were charged higher fare than the class

you traveled in.

iii. Prepaid Ticket Advice (PTA):

This is for sponsoring the tickets or the relative, friends, etc. for any
other country/destination the money paid by the person sponsoring the
ticket in advance and after the checking of the documents of the nominee of
the sponsored, sponsoree is issued this ticket. The responsible station
communicates through telexes.
5.2.2 Agency Sales:
There are three types of agents selling tickets of PIA. IATA approved
agents, General Sales Agents (GSAs) and Non-IATA Agents. Agents are paid
commission on domestic 5% and on international 9% and sometimes paid 3%
above the normal rates. Agents as well as stations are required to submit the sales
statements. These may be daily/weekly/monthly as the case may be.
5.2.3 Refund Unit:
Persons who do not report 72 hours before the flight the seat are
automatically canceled. In case of international tickets the unused tickets are fully
refunded. Jacket covering the coupons of the ticket bears instructions and
procedure of cancellation charges with specified rates.
PIA policy that it facilitate its customer if the flight is cancelled due to any
reason than PIA will not charge any amount to the customer and the refund
amount will be fully paid. I have observed that at my work in PIAC Islamabad

30
 /Rawalpindi station most of the refund cases were of domestic flight for Gilgit
and Skardu.
5.2.4 Accounting Unit:
Disk/information received from all stations sometimes enables this unit to
monitor accounting and prepare floppies and transmit them to the main frame. In
PIAC accounting is fully automated and computerized. Few stations have on line
systems too however manual work is not totally eliminated due to non-availability
of the on line systems at some stations.

B. Cargo Revenue Section

Before going into details it will to look at the organizational set up to this section.

Manager

Cargo Revenue

Assistant Manager Assistant Manager

Sale Unit Lift Unit

Accounts Accounts Accounts Accounts Accounts

Officer Officer Officer Officer Mail Officer
R-2 R-3 R-11 Rev. MISCE.

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 In the hierarchy above R-2 stands for revenue generated by PIA’s own
counters where there is no commission on sales, R-3 is concerned with FOB
payment by consignee, in which commission factor is involved. R-11 stands for a
document regarding the agent’s sales revenue and remittance report. Whereas
miscellaneous includes refunds, handling charges, etc.
5.2.5 Sales Unit:
Sales may be of two types; sales on PIA’s own counters and sales by
agents. When cargo sales are made airway bills are prepared by
stations/agencies. Stations are responsible for reports to head office about
airway bills, both of agents and stations. Agent’s reports to stations and
stations to H.O. Cargo sales may be domestic or international. R-2 is statement
regarding domestic cargo sales and international cargo sales for PIA counters
whereas R-11 is a statement for agent’s cargo sales. R-3 is collection report.
R’s are returns prepared by the stations and sent to lift unit. Lift unit keeps the
tracks of the cargo sales revenue and monitors the preparation and collection
made by stations.
International Revenue Section:
All airlines render services and these are measured in terms of money.
Revenue division is responsible to keep the tracks off all the revenue. Interline
revenue has two aspects:
i. Receivable:
When passenger from any other purchases ticket airline but lifted by PIA.
ii. Payable:
Some other carrier but lifts passengers purchases when ticket from PIA.
These transactions are settled through IATA clearance house. IATA clearance
house has its member airlines are dealt according to the standing agreements
with them. As IATA regulates the airline industry in the world most of the
settlements are through IATA. Sometimes revenue is divided according to

32
 sectors carried. These types of the settlement are made on the basis of mileage.
This is called probation. For settlement there are three currencies in which
payments are receipts are made.
♦ European Currency
♦ US Dollar
♦ Pound Sterling

Pricing
This section of the revenue division was established in 1975. It acts as
regulating authority of the airline. According to IATA rules approved fare
written on the face of the tickets should be charged as that fare is approved.
But the airlines undercut their fare especially in other than the base country.
This section monitors these underground unethical violations of the IATA
rules.
When other airlines undercut fares and PIA feels that it must also
undercut, the station managers prepares proposals about fare expected to be
charged and sends these proposals to marketing department. Marketing
Department analysis the proposals and approve them after comparing with last
year’s figures. Final approval is made by “director sales

My Work Experience in PIAC Islamabad.

As PIAC is a commercial organization. It main function is to carry
passenger from one place to another place, one country to other country. One
continent to other continent gave way taking cargo is second major function of
PIAC. As the PIA business is a different type of business from a routine
business. That’s why its accounting system is somewhat different and
accounting reports are different from the routine reports.
5.3 THERE ARE DIFFERENT TYPES OF REPORTS IN WHICH
DIFFERENT TYPE OF SALE ARE REPORTED.

33
Report No 1 (R1)
Counter Pax Sale: In R1 Counter Pax Sale is reported. Counter Pax
Sale means direct passenger traveling sale from the station counter. There is
three type of Counter Pax Sale.
 International Pax Sale
 Domestic Pax Sale
 National Assembly Pax Sale
Report No 2 (R2)
Counter Cargo Sale: In R2 the Counter Cargo Sale is reported. Cargo
Sale means directs cargo sale from the station counter. There is three type of
cargo sale.
 International Cargo Sale
 Domestic Cargo Sale
 Air Express Sale
Report No 3 (R3)
Other Station Cargo Sale: In R3 Cargo Sale is reported. That type of
Cargo Sale, which is booked at one station without payment. When it is
received at the destination station then payment is made at the destination
station. When that payment is received in that station from where the parcel is
booked then it is reported in R3.
Report No 4 (R4)
Miscellaneous Receipts: In R4 miscellaneous receipts are reported.
Different types of revenue, which are not treated in other reports, have been
treated in it. For Example Rent, Fare, Extra advance and re-back reservation
system charge, and Computer Charges.
Report No 5 (R5)

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 Credit for Embassy & Customers: PIA offers credit to different
organizations, Embassy and Customers. When sale is made on credit and when
this credit amount is recovered then it is reported in R5.
Report No 6 (R6)
Refund: When the customers who purchase the travel ticket and can
not use the ticket and want to refund it. Then these tickets which are refunded
are reported in R6.

Report No 7 (R7)
Due Payments: When any Payment is due on the client and he made
the payment in other station. When it is received in the origin station then it is
reported in R7.
Report No 8 (R8)
Sales on Credit: PIA offers credit to different organizations, Embassy
and Customers. When sale is made on credit then credit sale is reported in R8.
There is a programmed in the computer that when the credit amount is
received and reported in the R5 then automatically it is washed from R8.
Report No 9 (R9)
Programmed Reports Transferred into R-9, from R-1, R-2: R-9 is
consolidated statement of all receipt. There is a program in the computer that
when the cash is reported in the other reports like R1, R2 etc. automatically
this cash is transferred into R9. R9 is used for the reconciliation purpose. That
all cash collection is reported in this report then reconcile with the Passbook.
Report No 10 (R10)
Agent’s Reports: PIA authorizes some agents to issue the tickets. When
the agent’s sale reports have been received then it is reported in R10. R10
consist of two type of sale.

35
  International Pax Sale
 Domestic Pax Sale
There are three types of agents, which deal in passenger ticket these are
known as “Pax Agents”.
i. DSA’s : Domestic Sale Agents
Such agent’s sales only domestic tickets. They are allowed 5%
commission.
ii. IATA Agents
Such agents are registered agents. They sell tickets of each airline.
They deal
both in domestic and international tickets. They are allowed 9% commission
on international sale and 5% commission on domestic sale.
iii. GSA: General Sales Agents
Such agents sell only PIA tickets. They are allowed to sell domestic
as well as international tickets. They are allowed 9% commission on
international sale.
Report No 11 (R11)
Cargo Sales from Agents: PIA authorizes some agents for cargo sale.
When the agent cargo report is received then it is reported in R11. R11 consist
of two types of sale.
 International Cargo Sale
 Domestic Cargo Sale
5.4.1 REVENUE DEPARTMENT
As PIA main business is selling of Air Ticket. PIA has a very modern
and fast working system of ticketing. All the Reservation and Ticket system is
computerized. All the cash sale is deposited in the bank on daily basis. There
are different types of sales:
1. Cash Sales

36
 2. Credit Card Sales
3. Sales to Defence Personal against voucher
4. Incentive Ticket to different Client and Agents
5. Staff Rebate Tickets.
5.4.1 Cash Sale
Cash sale are banked on daily basis and bank slips along with sale
reports of the same day are sent to the revenue section where staff working
made on initial audit of the report and the deposited into the bank. That
amount is accounted for in a source named R-1. This accounting circle
revolves till the monthly closing course.

37
5.4.2 Credit Card Sale

All the credit card sales are sent to Revenue Section on daily basis and
there are sorted and listing is made for billing to the concerned bank. When
Cheque of credit sale is received it is deposited into bank and banks credit it to
the PIA Account.

5.4.3 Sale to Defense Personals

As per Government of Pakistan Rules Army men has to pay 50% Fare
Remaining 50% will be recorded from the army through a lengthy billing
procedure. All the daily sales to Army personal are received in revenue section
and the handed over to an other section dealing all the credit sales named
“Credit Control Section”.

Army men Travelling on official duty travel against an APW is issued

by their authority. APW mean Air Passage Warrant. These APW are also deal
by credit control section.

5.4.4 Incentive Tickets to Different Clients

When an agent makes a satisfactory sale. He also claims it for a

rebated air ticket. Some passengers are VIPs and regular travellers or from
commercial points of view PIA management feels they are valuable such
persons are awarded with incentive tickets. Such tickets are accounted for by
the H.O.

5.4.5 Staff Rebated Tickets

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 Like all other organization PIA employees are awarded Free/Rebated
Air Tickets. All above sales are received in the revenue section along with
their support there they are sorted out and accounted for al their merit after all
job is completed all the supporting paper are found correct and properly
attached. These reports are sent to H.O. for an other audit by the staff working
in H.O. All the sales A/C are re- conciled on daily basis.

 Reconciliation of DOM R-I with respect to TAC, APW, AMEX, Visa etc.

 Reconciliation of INT R-I with respect to AMEX, Visa, Exchange

tickets/Other Airline Tickets, extension of validity & DADS tickets.

 Checking of DOM Documents

 Checking of INT Documents

 Collection of all sales proceeds at the counter

 Feeding Deposit Slips of R-I (DOM) R-I (INT)

 Reconciliation of Collection Account.

 Preparation of INT R-I (through COSSAP III).

 Preparation of DOM R-I (Manually)

 Realization of Credit Card Sale and its reconciliation.

 All other duties, which can be assigned when, required.

5.5 DOCUMENTS CONTROL SECTION

As PIA function is to sell Air Ticket and carry cargo from one place to
another. So it main document or important paper is Ticket and Airway bills. As
there are so many tickets are used on daily basis by PIA itself and by the
agents. So it is very important to control all the ticket. So a separate section
named “Document Control Section” is working for this purpose. All PIA

39
 tickets are printed in U.S.A and Singapore from there they are received by the
H.O. Then H.O. sent these tickets to station according to their requirement.
Where they are kept in strong room and issue to after proper recording and
inventory is maintain.
I. SERIAL CONTROL SECTION
The duty of this section is to control the Serial of All Revenue
Documents/Tickets. All tickets are used in sequence. The main functions of
this section are to check and control and to avoid any misuse or any break in
sequence.
5.6 AGENCY SALES UNIT
Most of the PIA tickets are sold by Agents. The function of this section
is to check the agents and coordinate with the solving different type of
problem. Ticket sold by agents are reported in a sales report and submitted to
this section fortnightly along with a Cheque of same amount reported in sales
report after deducting 9% commission allowed to agent. The object of this
section is to check the sales report of each agent, whether all tickets are
reported which are sold whether correct amount is reported in the sales report.
Fair calculation is a very technical job. Checking of fare calculation is main
object of their section. After checking all the sales reports received from
agents are feeded in computer and whole the data is transferred to Head
Office. Whole the sale amount against the passenger sales are reported in R-10
and whole the sales amount received against the cargo sale are reported in R-
11. Sales proceed are received from agents on fortnightly basis. I work which I
performed in agency sales unit were as follows.

 Preparation of R-10 ASR-10, REF-10 and maintain its record.

 Revenue Documents Control Agency Sale

 Coordination with Agents regarding all financial matters

40
  Deposit of sale proceeds received from Agents

 Issuance of Cash Receipts against sale proceeds of Agents.

 Feeding of Deposit Slips, which relate to R-10

5.7 REFUND SECTION

As PIA business is sales of tickets. All unutilized tickets are returned to
PIA and refund is claimed. To deal with such ticket a refund section is working
in PIA Finance. The unused ticket is presented in refund section. After proper
scrutiny of the ticket a pay voucher is prepared along with a cheque. This pay
voucher and cheque duly approved and signed by the authorized officer. All
the payment process is computerized and whole accounting is automatically
done by computer user has to only enter the specified A/C code allocated by
PIA for each type of payment. Because payment are of different types and
nature. So many accounting codes are used to proper accounting as per PIA
set rules.
I was instructed to take care of these points when preparing a refund
check in GOSSAP.
 Refund can be for given for ticket which should not have passed 1 year
 Passenger should bring a PRT.
 Miscellaneous charges order were also entertained by providing a copy of
MCO as if some is charged higher fare.
 Army Personal were given rebate when refund their ticket it should also be
recorded in O/A 21035 and Remarks in TAC. 278835
 At all cancellation minimum deduction should be Rs. 300
 No show charges should be feeded in CNC.
 At credit card ticket purchase, at the time of refund 1.68 % should be
deducted.

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5.8 DISBURSEMENT SECTION

Monthly expenditure report is called D-15 which consists of Pay

Vouchers with relevant supports, Payment Book listing all the Disbursements
made at Station during a specific month, Disbursement Accounting Summary,
Staff Payment Register, Budget Control Register, Bank Imprest Reconciliation
and Bank Statements.

PREPARATION OF PAY VOUCHERS

Pay voucher is a basic document of Disbursement System. Is should be

prepared against approval competent authority and must be supported with all
necessary documents i.e. bills, invoices, cash memos, receipts, approvals and
authorities, etc. Before preparing a Pay Voucher, all applicable rules, Admin
Orders, Circulars & Directives issued from time to time should be strictly
followed.
Each invoice/bill/cash memo/cash receipt/statement/claim form must be
certified by the concerned officer and approved by the Station Head. Over-
writing is highly objectionable from Audit point of view. In case involving
corrections, wrong figures should be circled in red ink and correct figures
written and duly signed by the claimant and approving authority before
preparation of pay voucher.

In case of invoices/supports printed in Foreign Languages, brief English

translation should be written on the document.

42
 Each pay voucher must contain signatures of the official preparing
payment voucher as well as the approving authority along with their staff
numbers.

Recipient’s signatures must be obtained on Pay Voucher. If Cheque is

dispatched, a dispatch stamp must be affixed. In such cases official receipt of
the beneficiary should also be attached with necessary identification along
with other supports. In case of collection through third party, authority letter
and proof of identity must be obtained.

All supports should be photo copied and retained with copy of pay
vouchers for reference and reply of queries. Original supports, except TA form,
must be sent to Head Office for checking and record purpose. Payee’s copy of
TA form along with copies of ticket jacket hotel bill and airport tax, receipt
etc. should be attached with P.V.

No payment should be made on photocopies of invoices/receipts etc.

This is the most important safeguard against duplicate payments and frauds
preventions.

I was instructed to take special care of these points when making a

computerized cheques in GOSSAP. And I performed certain tasks in
disbursement section.
 Preparation of D-15

 Preparation of R-6

 Making Cheques for refunds

 Dealing lost ticket cases

 Dispatch of D-15, R-6 along with attachment

 All other duties, which can be assigned when, required

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CHAPTER #6

HUMAN RESORUCE MANAGEMENT AT PIAC

ISLAMABAD/RAWALPINDI

My experience and Observation at PIA Rawalpindi

My internship was in Finance section but I got the opportunity at PIA

Rawalpindi to understand Human Resource Management department and got
good information at the station and for that I am very much thankful to
Mr. S.A Mujtaba H. Naqvi Human Resource Manager Rawalpindi/ Islamabad.
He gave me good information and guided me about the organizations structure
and administrative setup. It was indeed a very good experience to get HR
management information. Other than finance department it helped me a lot to
understand organizational setup and how to work in a corporation. I have
included that chapter in my internship report as it gives a more clear picture of
Pakistan International Airlines administrative setup and it’s function.

6.1 Administration Department in PIA

Every organization has a personnel function whether or not a specific
personnel manager has been so designated. Every organization must hire, train,
pay, motivate, maintain and ultimately separate employees. Organization has
its peculiar administrate structure, which suits the functions, objectives,
strategies and rules and procedure of that organization “Administration is the
collective activity directed towards the attainment of a specific goal. It is
rational action, an attempt to maximize one’s goals by relating means to ends.
Administration is one of our most complex and challenging fields of endeavor.
The administration manager must be greatly concerned with the expectations
of both employees and society in general. Society at large proclaimed its
human resources to have vital needs that move beyond a “Work force” status.

44
 The employee is simultaneously an instrument of the firm, and human being
and a citizen ends. The Pakistan International Airlines has an administration
department, which involves the organization and management of man and
material in order to accomplish its goals, the administration department is
headed by a manager, where as the head of the overall administration is G.M.
of the region and at the are level by an Area Ahead . The Administration
Manager is directly under the control of G.M. of the respective region.

6.2 Administration Department At Rawalpindi Station

The Administration section at the Rawalpindi Station headed by the

Administration Manager comprises of an Administration office and three
Admin. Supervisors. The activities of Administration department include the
personnel and human relations, security arrangement, transportation,
stationary, filing and record keeping, discipline in the organization,
development and maintenance of support systems for the successful operations
and the coordination of the activities of various departments. The
communications of various decisions, polices, plans and strategies to the
various departments is the responsibility of the administration. The
administration department in PIA is concerned with the following functions
Organization
The administration department in the form of organization of rules,
procedures, functions and human resources carries out the structuring of
individuals and functions in to make productive relationship.
Management of Human Resources
The Administration department in PIA manages the personnel and is
concerned with the direction of these individuals and function to achieve ends
previously determined.
Methods and Procedure
The techniques and process of working and the interrelationships of
various functions are determined by the Administration Department in PIA.
Materials and Supply
The Administration department of PIA provides the tools and
requirements with the help of which the operational work is carried out. These
include Pen & Ink, Computer, papers, files, cabin, furniture, air-conditioner,
and etc. these materials and supply are maintained by the PIA Administration
Department.
Administrative Accountability

45
 The administration department in PIA also carry out the investigations
and inquiries of any officer employee violation the rules and regulations,
indiscipline and misuse of his authority etc.
Maintenance and Security of the Organizational Environment
The arrangements for infrastructure like offices support services, and
the administration department maintains physical facilities for the human
resources. The security of the offices, building, furniture and fixtures and
supplies etc is ensured by the administration of PIA through the maintenance
of security staff:
Co-ordination and Communication between Various Dept
The uninterrupted communication and the maintenance of the means of
proper co-ordination between the employees, management, rules and
procedures and functions of different departments.
Administrative Procedure
The administration is required to follow a definite setup specific
procedure. Prof. Waldo defines procedure as, “the prescribed or customary
way of working together with the conduct of an organization business. It is the
procedure that governs the internal and external relationship between one
individual and another, between one organizational unit and another; between
one process and another, between all combinations and permutations of these.
The administrative procedures in PIA are classified as Institutional and
working procedures.
Institutional Procedures
The Institutional procedures pertain to staff service and auxiliary
functions. The Institutional procedures in PIA include mail and
communication, meeting and conferences, internal reporting, preparation,
issuance and distribution of documents, space library services, files and
records, procurement, budgetary and fiscal administration.
Working Procedures
The working procedures in PIA include matters like general functions
and powers of the committees, eligibility for membership and appointment of
members, committee officers and finance, meeting and recommendations.
6.3 OFFICE PROCEDURES:

The entire corporation’s actives, in spite of the modern means of

communications like telephone, fax, e-mail and telex etc is conducted by
writing. The administrative procedure, which is followed from the managing
director to the clerk. It is collected in a form “Office Procedure Manual.” The
office procedure starts working, when some letter or application reaches from
outside i.e. either from the Head Office or any other sister department. The

46
 letter is entered into a registered for the receipt number is put on that. The
clerk or assistant sends the letter/hand over the letter to the concerned officer,
which after being seem by the section head is processed and put to the officer
or department, which has to take the action. The communication meant for the
administration department is filed in the department. The manager passes on
the letters, if meant for the approval of higher authority like G.M. or the
Managing Director of the concerned department who further forward the
letters to the Managing Director and Chairman if important policy decisions
are involved.
There is no way to deny the fact that in between the receipt clerk and
the managing director, there might be many coming-backs and going ups.
Each officer would add his own note, memorandum or minute. Old records
would be looked into, precedents would be discovered and information from
various sources would be gathered. The case may require consultation or
discussion with another section, department, ministry, provincial government
or even a foreign government or even private associations, groups or
individual at the appropriate level. Thus the file by this time becomes the file
or correspondence, notes, minutes, minutes and memoranda. At last, a stage of
decision reaches. There after, there begins a final downward journey of the
file. Ultimately the file reaches the officer or assistant, who dispatches the
draft to the typist. The typist type the draft, who sends it to the officer or.
Assistant Manager, who examines the draft and correct it, if any discrepancies
/ errors found. If not the letter is passed on to the manager for signature.
a) File System:
The entire office procedure revolves around the filing system. In the
office terminology, it connotes a device for holding papers for reference. All
papers are kept in two categories wise, notes and correspondence comprises all
communications received and office copies of out going communications.
They are arranged chronologically – those reaching first, kept at the bottom.
All communications are assigned reference No. The material collected for the
sake of understanding is given in the appendix of correspondence. The whole
set is then placed in a large folder with a folio-sized cardboard. This makes a
file all files are registered I the file register.
b) Record Keeping:
Recording means, “the process of closing a file after action on all the
issues after action on all issues under consideration are completed. When
action on a file is taken, it comes back to the assistant, who with the approval
of the officer classified the file as class A, Class, B and Class C. After the
classification of file, the assistant sends the file to the indexing clerk who
indexes them. A file number is given to each file. These files are filed

47
 vertically standing in the cabinets of each department. Records are kept for
three years after which they may be discarded.
The administration section performs all the routine matters of
administration like leave and passage. Maintenance and updating personal
records of employees is also done by the admin. Section. The Admin. Manager
along with his staff is responsible for the implementation and communication
of all administrative order issued by the Head Office. Such order is issued
from time-to-time, because of changes in existing rules or due to the absence
of rules.
As the General Services Department is not present at the Rawalpindi
station, so all their activities are performed by the Admin Section e.g. janitorial
works and medical activities etc. carries out the employment activities as
advised by the employment section of the Head Office and also supervise the
local transfer of the employer. The Admin. Section also takes disciplinary
action against accused employees after an enquire has been carried out by it.
The Admin. Section arranges the local training Programme of the employees
and co-ordination meetings among various departments. All the matters
pertaining to the employees are dealt with by this section e.g. checking the
monthly attendance of the employees, awarding cash rewards, issuance of
tickets to PIA’s employees and their families, maternity leave, education, EDH
(Executive Dining Hall) coupons etc. It also deals with all the law cases Vs.
PIA and lease agreements with outside parties.
6.4 Manager Administration:
The principal coordinator at the area or station level is the Admin
Manager he is responsible to implement all the instruction of G.M. All the
matters of the administrative nature are routed through the admin manager for
onward submission to the Head office and top management.
Specific Duties/responsibilities of Administrative manager:
1. For his administrate functions the Admin. Manager is directly responsible to
the General Manager.
2. He helps the General Manager to perform his administrative functions too.
3. He takes all the disciplinary actions against the employees and has the power
to demote any employee according to the rules.
4. He does granting leave of the employee.
5. All local transfer are done by him.
6. All the admin, orders, circulars, officer orders came through him and are
implemented accordingly. All jurisdictions.
7. The Admin does approval of the medical bills of the employees. Manager
according to the medical rules and are then sent to the finance section for
payment.
8. Liaison with staff canteen committee for any conflicts.

48
 9. The Admin. Manager issues tickets to the military personnel and recovers
payments from their concerned department.
10. He deals with all legal cases on behalf of PIA courts including accidental
claims cases from PIA.
11. He also deals with all those parties who have hired the PIA’s buildings or from
whom PIA has hired their buildings.

Administration officer
Function of the Administrative Officer:
1. Supervises the admin. Office and reports of the admin. Manager on policy
matters.
2. Implements all disciplinary / administrative measures as advised by the
management.
3. Supervises and keeps the personal record of the employees regarding leave,
passage security passes etc.
4. Circulates or communicates all admin. Orders, circular, organization orders,
received from head office / management to the concern section.
5. Keeps correspondence with local agencies / head office regarding the matters
which falls under the jurisdiction of admin. Officer.
6. Keeps and supervises the attendance / overtime statements for submission to
the concerned section.
7. Controls the inventory list of the admin. Section.
8. He also does processing the cases of employees recruited by PIA’s
employment section at the heed office.
9. Establishes the welfare activities of the employees.

Administration Supervisors:
The function of the administrative Supervisors is

1. Handles and maintains all the personal file cases, leave and passage files of all
employees of Rawalpindi station and whole territory which is under the
jurisdiction of G.M Rawalpindi
2. Maintains register and correspondence pertaining to mileage allowance of
GM, PSM, CSM, SPO’s and all other officers at booking office.
3. Prepares attendance, overtime and other related statements for submission
head office.

49
4. Prepares and types attendance statements of GM Secretary, Admin. Section
Motor Transport, Cargo, Reservation, communication and works and sends it
to the pay role section.
5. Maintains and issues medical cards and identity cards to the employees.
6. Maintains budge control register of Marketing, Admin. Canteen mosque
7. Liaises out any function assigned by G.M and Admin. Manager.
8. Receives, collects and checks all medical bills from employees on daily basis
and makes entries of medical expenses in register and submits the bills to the
finance section for payment.
9. Makes/Photostats of required official documents.

Personnel Officer:
To perform the work of the corporation the personnel officer has the
following function:
1. Keep and supervise the personal record of the employees regarding leave,
passage, and security passes.
2. Process the cases of the people recruited by PIA’s employment section of
Head Office.
3. Supervise the personnel officer and report to the manager Administration of
policy matters.
4. Have correspondence with local offices/Head Office regarding the matters,
which fall under the jurisdiction of the personnel office.
5. Distribute all important material such as administration orders, circular,
organizational orders received from head office/ management to the
concerned sections.
6. Implement all disciplinary / administrative measures as advised by the
management.
7. Supervise the attendance, over time statements for submission to the
concerned sections and also control the inventory list of the administration.

Personnel Function of the Administration Department:

The principles governing the building up of an administrative structure
are important but a structure unless properly manned, remains a dead weight.
All the personnel and human relations functions are assigned to the Admin...
depth in PIAC. The Administration Department performs the following
functions with the consultation of Head Office.

Important Function of the Administration Departments:

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 In a large and complex organization, efficiency can only be achieved
and maintained by a continuous and conscious effort of leadership and
direction form senior officer. It is sufficient merely to have good methods and
clear instructions.
As in many other spheres of activities, the great problem is the human
one and the greatest need is to recruit and train those who are likely to be the
leaders of the future.

6.5 Recruitment and Selection:

Recruitment is the discovery of the potential applicants for actual or
anticipated positions. The vacancies are created after the approval of the
finance department. The PIA recruitment and selection procedures involve the
following:

i) Recruitment Policy:
 The recruitment policy given the following conditions for recruitment:
 The age limits for the recruits are between 18-26
 The educational qualifications of the employee.
 Officers (Executive Category) Master Degree /MBA/MPA /BBA(honors)
 (Any recognized University by Federal Govt.)
 Assistant Officers/below Category Matriculation to B.A./B.Sc
ii) Sources of Recruitment:
Whenever a vacant position is available, the head of department make
reviews of the existing personnel and carry out a search within the
organization for suitable persons before trying the outside sources. But if a
person with the required qualifications for a given job is not available, fresh
recruitment is made.
iii) Techniques of Recruitment:
The vacant posts are advertised through the local and national
newspapers and applications are invited with the job specification and
description showing the job requirements and eligibility.
iv) Selection Procedure:

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 The selection process is concerned with the securing relevant information
regarding the applicant. The selection procedure uses the screening devices so
that the most efficient and professional employees should be available to the
organization. The selection procedure in PIAC is based upon three important
principles, namely:
I. Competence
II. Equality of Opportunities
III. Neutrality
The following screening devices are used in the PIAC during the
selection process.

a) Application Blank:
Each applicant blank provided by the Admin. Department. The
application form has to be filled by the applicant in his own handwriting
submitted to the admin dept before a specific date. The format of the
application blank is given in the appendix. In the application, the personal
data, educational qualifications and experience etc. of the applicant is give.
b) Test:
These applications are scrutinized and the candidates passing through
the security are called for a written test. The test s conducted by a Board from
the Head Office with the assistance of the Administration department at the
concerned stations.
c) Interview:
Those qualifying the written test are called for an interview
administered by the selection board assisted by the administration department.
d) Physical Examination:
There is usually a formal physical examination of the candidates.
Another requirement is the submission of a formal Medical Fitness Certificate
from a doctor.
e) Approval by the Competent Authority:
After going through the whole process of selection, the list of
recommended applicants is sent to the competent authority for approval.
f) Offer of Appointment:
After the approval, the Administration Department notifies the decision to the
candidates through a “letter of appointment”.

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g) Orientation Period:
After appointment, the employees go through an orientation period i.e.
Probation, for MBA/MPA/BBA/BPA (honors) as executive the period is 5
weeks. And for employees of under-officer class, the period is 3-6 months.
h) Confirmation:
After successful completion of the orientation period, the employees
apply for confirmation to a competent authority.

6.6 OTHER HUMAN RESOURCE MANAGEMETN FUNCTIONS

B) PROMOTION/TRANSFER:
A promotion is an upward advancement in the organization to a
position, which commands higher opportunities, greater authority, better
service conditions and a higher rank. All the promotions in PIAC are made on
the basis of merit of each case, and not by the virtue of seniority alone.
Transfer to different jobs either to fill definite vacancies or to perform
assignments to develop individual are made. The Head office in accordance
with the promotion makes promotion and transfer to all categories and grades
and transfer polices of PIAC. The Admin department helps in co-ordination
these activities of transfer and promotions.
C) RETIREMENT/PENSIONS:
The age of retirement is completion of 25 year of service or attaining
the age of sixty unless they are otherwise not fit for wok and the employee can
opt for pension. Records of these employee are maintained by the Admin,
department, which after the retirement of the employees is sealed and stored.
D) CONTROL
Admin department exercises control by two ways upon the activities of
various departments and employees. These are through internal and external
auditing and controlled budgeting.
E) LEAVE
Leave is temporary absence from duty. All application for leave is
addressed to the admin manager through proper channel. An employee cannot

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 claim leave ad a matter of right and the competent authority at its discretion
may refuse of revoke any kind of leave. Leaves are applied fro and sanctioned
in the terms of days. The following types of leaves provision occur in PIAC.
i. Casual Leave
All employees are entitled to 10 days of causal leave in a calendar year.
The maximum number of casual leaves at a time is 3 days.
ii. Privileged Leave
Privilege leave may be on the following terms,
Fully Pay: The maximum period of leave on full pay, granted at one time is
30 days for service less than 10 years, 35 days for service over 10 year in a
year. The fifteen days of this leave are to be availed otherwise collapsed.
iii. Sick leave
Sick leaves may be granted up to a maximum of 12 days to an
employee.
iv. Disability leave
Disability lave may be granted up to a maximum of 180 days to a
person, disabled by injury, ailment or disease occurred in the course or in
consequence of duty or on official position.
v. Ex. Pakistan leave
Leaves without pay may be granted to employees, who proceed to
abroad during the leave for a period of one week to 3 years.
F) PASSAGES
The passages or free ticket are given to the employees by the Admin
Department maintaining its records.
G) TRAINING
Accordion to Gallbraith, “We can get the larger part of our output not
form more capital investment but from investments brought about by
improvement”. PIAC has its own training center, known as PTC, under the
control of the administration department. It includes.
a. On the job training
On the job training is given to employees already existing in PIAC. It is
given to employee to update the employee’s knowledge of various procedures,
methods, rules and regulation etc. and familiarize the employees with the
changes and advancements taking place from time to time. One of the methods
of no-the-job training includes job rotation.

i. Job Rotation

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 As an important method of training, it enables the employees to work at
different positions and get an overall picture of the working of PIAC.
ii. Pre-Job training
The pre-job training is imparted to the various categories of employees
before they join the organization and assume responsibility. The pre-job
training to the flight stewards and hostesses for specific period.

6.7 THE PIA TRAINING CENTRE

The PIA raining center at Karachi is possible the only airline training
establishment where comprehensive instruction in all major field is given
under one roof.
PIA has been training its pilots, mechanics, technicians, traffic / sales
staff and cabin crew since 1956, but it wasn’t until 1960 that all training
facilities were amalgamated at one centralized place and expended to train
personnel in all fields of the airline.
In October 1975, the training center moved to its new three stories
specious premises near the Head Office where it has been able to add more
attaching aids. Training facilities available within the airline also include flight
Simulators for basic and recurrent training of pilots and other operational crew.
In 1992, PIA introduced computer based training (CBT) facility;
containing courses are for specific aircraft for training its engineering cabin
and cockpit crew.
Courses are conducted according to the requirements of the industry
and the standards laid down by the civil aviation authority (CAA) of the
United States and the international Civil aviation organization (ICAO) al
courses are also approved by the Civil Aviation Authority of Pakistan.
Deferent courses and training facilities are also offered to public and
private sector organization and individuals within Pakistan. Basic and
advanced raining facilities are also provided to foreign carriers, and courses in
specialized fields are conducted at the center as well as location abroad.
Over 40 airlines from Asia, Africa and Europe have used their facilities
for the training of their pilots, maintenance engineers and other disciplines.
The total number of such trainees exceeds 6,000.
Training is also being conducted for African of scholarships granted by
the ministry of foreign affairs, Government of Pakistan.
In 1994, PIA training center introduced advanced course in Quality
management TQM and ISO-9000 certification. It is planned to develop PTC to
receive an ISO-9000 certification in the next one-year.

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 PIA training center was first selected to conduct civil air transport
course for developing countries on behalf of government of Pakistan in
collaboration with Japan international co-operation agency (JICA) in 1988.
PIA has so far conducted eight such courses, in which senior airline and civil
aviation officials of 30 countries have participated. In April, 1995 PIA and
JICA concluded an agreement to conduct another five such courses in the field
of civil air transport management.
H) BENEFITS AND ALLOWANCES
The primary goal of the fringe benefits is to retain the employees in the
organization on a long-term basis. These benefits include medical facilities,
transport facilities car allowance house rent allowance etc. all data about the
fringe benefits and allowances are recorded in the personal file of the
employees and are maintained by the administration dept.

I) SALARY
Salary and pay scales of an organization is a test of attracting
professionals and efficient manpower towards the organization and are also a
means to retain them. The admin dept. maintains pay records of employees
categorized into different pay groups according tot eh salary structure it
includes:
 Pay group I-IV :It includes the Unionized Staff
 Pay Group V-IX: Includes the officers and middle level management
 Pay Group X-Above:It includes G.M; and other higher executives
 A special pay group is for the managing director, director and pilots.
J) PERFORMANCE APPRAISAL
Performance appraisal is the systematic evaluation of individuals with
respect to their performance on the job and their potential for development. In
PIAC, the evaluation is made by each person immediate officer, and this rating
is in turn reviewed by his superior. Thus their superiors also evaluate all the
people who appraise others. The annual credit report (ACR) is made of every
employee at end of the year in view of the evaluation and appraisal given by
the department head.
K) EMPLOYEES RECORD
The administration is also required to maintain an up-to-date record of
all the employees of PIAC. For this a personal number (P.No) is issued to

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 every employee, a file of his is maintained containing the following
particulars.
 Personal data
 Qualification
 Experience
 Promotions
 Pay
 Any other information
Dummy Recorded
Dummy record is maintained for all employees as well as the out-
station by the admin. Dept that are the duplicate of the actual records
maintained at the head office. Microfilms of these records are maintained to
avoid loss in case of damage or misplacement of the written records.
L) DISCIPLINE / PENALTIES
If any violation of the rules and regulation, procedure and misuse of
authority and function on the part of an employee takes place, the
administration department asks for a show cause and explanation through the
show cause notice. If found unsatisfactory. Inquiry is carried out, and if found
guilty penalties are given which may include.
Decrease in pay
Demotion
Discharge
Suspension
Dismissal
M) GOLDEN HAND SHAKE
The present government has intimated golden handshake. The
administration depts. also carry out this scheme according to a prescribed
policy.
N) CAREER DEVELOPMENT
Establishment of various career channels for the development of the
employees is also the function of the admin, dept.
O) Manpower Planning
The process by which the management determines and assures that the
organization will have an adequate number of qualified person available at the
proper times, performing jobs, which meets the needs of the organization and
which provides satisfaction for the individuals involved the administration

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 department plan for the manpower requirements of various depts. And keeps
the most appropriate number of employees in various depts.
a. Human Resource budget
Different departments analyses working loads of the employees and
according to it, a budget is made and the work load of these departments are
maintained as per the budget, through new induction transfers etc.
b. Human Resource Management
Human resource management is to utilize the human resource
according to the requirement. The Pakistan international Airlines has the basic
objective of
Utilization of human resources
To properly train them as to get an optimal level.
Legal Matters
PIAC has a legal division, supervised and operated by the admin. Dept.
matters relating to rules and regulations. By laws and state and international
laws are dealt with by this division.
Security
The security division of the PIAC has a very important role. It provides
safety and security to the infrastructure, operations, assets and fixtures and
documents etc. It also ensures the security of the personnel of the PIAC.
Industrial Relations
Industrial relations refer to a dynamic and developing concept, which is
not limited to a complex of relations between trade Unions and management
but also refer to the general network of relationships normally obtained
between employees and employees. It is considered very important for any
industrial / service organization to have maximum satisfied employees. A
workable atmosphere can only be assured through participative management
in an organization, the administration department advises the management on
the existing labor laws and ensures the strict adherence to it. It plays the role of
mediator between the management and the employees union in case of any
deputes between the management it maintains cordial and harmonious
atmosphere in the organization.

According to the industrial relation ordinance 1969, 50 or more than 50

employees are permitted to form a union. In case of more than one union
election are held to elect labor leaders under the national industrial relations
commission (NIRG). In case of any disputes between the management and the
labor, both condole NIRC. In PIA a referendum is held under 22 and 23-IRO.

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 At the head office there is a CBA, while at the station level, it is a local
chapter.

6.8 CBA (Collective Bargaining Agent)

CBA being the representative of the employees, put their demands to
management, which is called the charter of demand. In case of any dispute, the
management and CBA negotiate of rainy settlement. The CBA ash the director
access to the mange mint i.e. G.M. or admin manager in case of any problem.
If the demands of the CBA are approved then minutes are issued by the admin.
dept. and are approved G.M. or IRO action.
Rules for CBA
Any employee of pay-group I-IV can compete for CBA. At the same
time, he is the regular employee and has to abide by the rules and regulation.
The CBA tenure is 2 years.
PIASSA: PIA senior staff association

Industrial relation officer (IRO)

In every department there is an IRO to maintain cordial relations
between management and Union
Duties and Responsibilities of the IRO
1. To advise the department Head/G.M/Sectional Heads / officer on the provision
of labor laws which are applicable in their areas of activity.
2. To regulate staff interviews with the department heads of resolving employees
grievances.
3. To assist line management in maintaining congenial and harmonious
atmosphere in the pursuits of management’s directives and policies.
4. To carryout regular inspections and submit reports on specified proofreads to
highlight, whether breach of any applicable laws is involved and take remedial
action.
5. To keep contact with all the employees at all levels in the department to know
their reactions / feelings of management policies and decision taken from time
to time and keep the department authorities and industrial division informed of
the same,
LEADERSHIP STYLE

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 Leading is the process of influencing others to accomplish specified
objective. It consists of interpersonal influence, exercised in a situation and
directed by means of communication process towards the attainment of a
specified goal or goals. The leader of a department section or the whole
organization has the dual objective, representing the interests, objectives and
functions of the management and achievement of organizational goals and
objectives and getting subordinates to work for the attainment of theses goals,
and the safeguarding of the interests of he subordinates against the higher
management. The leadership style means, the behavior of the leaders what he
or she does what he or she emphasizes, and how he or she deals with
subordinates, in PIA, the leadership styles is autocratic, who tend to make
unilateral decisions, dictate work methods. Limit workers knowledge about
goals to just the next step to be performed and some time given feed back that
is punitive. In PIAC, the employees have very little say in decision making
and no participative management is involved in the policy formulation. Here
we must point out the exception that sometimes the CBA’S influences the
decision making through their coercive power.

CHAPTER # 7
SWOT ANALYSIS OF PIAC
7.1 Introduction
Through the technique of "SWOT" one can analyze the present
performance conditions of an any organization and its weaknesses. Also the
opportunities it can grab in the external environment and the threats it faces.
This technique serves as a base for sound recommendations and conclusions.
I will use SWOT analysis technique in order to come up with
conclusion about PIAC.
7.2 Strengths

Strengths are found in the internal environment of the organization. They

are the backbone of an organization. Strengths of an organization can over
come any kind of weaknesses that the organization is facing. PIA has a number
of strengths due to which it is still one of the leading airline in Pakistan. These
are as following

 PIA has status of being Flag Carrier of Pakistan.

 Highest Market Share at domestic network.

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  Multilingual Staff on Board

 Booking Offices in all major cities both at domestic and International

 PIA has well established brand as it’s oldest airline in Pakistan.

 Subsidized fares

 Halal meat available at all flights.

 Electronic ticketing by web and through SMS.

 Highly Professional Staff

 Having Government’s protection

7.3 Weaknesses

Weaknesses are also found in the internal environment of the organization.

Weaknesses if more in quantity can break down an organization easily. They
can over come the strengths as well. PIA also faces a number of weaknesses
which are as following
 Old aging fleet of PIA causing higher operating cost.

 Huge burden of Employees which cause financial burden.

 Inadequate space on the aircraft

 Charging of higher fare as compared to competitors.

 Lack of marketing activities as compared to competitors.

 Poor quality of food/service on board specially in domestic flights

7.4 Opportunities

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 Opportunities exist in the external environment. They need to be
recognized and used according to the business being run. An opportunity
recognized and utilized at the right time will be the strength of tomorrow. Such
kind of opportunities also exists for PIA in its external environment. Some of
them are as following:
 PIA has huge potential market in Middle East if PIA upgrades its fleet.

 PIA has largest domestic network and by proper route planning PIA can

generate huge amount of Revenue with higher profit.

 PTDC provides favorable market for domestic as well as international

sectors for the airline

 PIA can generate more revenue by attracting customers through Web and

Mobile Reservations system.

7.5 Threats

Every organization faces external threats which could do damage to the

business's performance. These threats can damage the business and even could
be the reason of bankruptcy No doubt, PIAC is well established and seasoned
organization. Yet there are certain threats being posed by the external
environment.
Some of them are as under:
 Negative rising perception about the country, regarding terrorism.

 Political instability and law and order situation.

 Rising fuel prices in the world.

 Over staffing at all levels

 Frequently rising Airlines fare

 Fast growing domestic and international competitors

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  Effective promotion strategies adopted by other competitors like Emirates

and Shaheen anr Airblue.

7.6 Conclusion of Using SWOT Analysis:

From the above SWOT analysis I came with certain
Conclusion about PIA. No doubt PIA has good market for further growth and
it has many advantages over many others airlines. But PIA should upgrade it’s
old aging fleet as it is causing the PIA major financial loss because fuel prices
has risen in the international market and PIA has still old fleet, which causes
higher operating cost. Another burden on PIA is it has the highest number of
employees as compared to other airlines, as number of persons per aircraft is
highest. PIA should adopt a good marketing plan so that it will generate higher
profit and business classes seats should be promoted in the market and
passengers should be attracted toward that segment too. Merit based
promotion should be emphasized. PIA should adopt competitive strategies
both at domestic network and on certain international routes.

CHAPTER # 8

PROBLEMS AND SUGGESTIONS AB0UT PIAC

8.1 PROBLEMS
During my 8 weeks internship in PIA at Islamabad/ Rawalpindi station.
I observed various problems which PIA was facing or employees were facing,
so I came up with certain suggestions for the better functioning of the Airline.
Some of these problems are of such nature that their solution will help the
Airline and its workers in cooping in this complex world of globalization.
These problems are

1. Employees were not satisfied about the Promotion procedure and merit
was not encouraged. Chairman of PIA should always be appointed
from with in the organization.

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 2. PIA hadn’t a good marketing strategy for certain international routes
where PIA was facing financial losses.

3. PIA is operating with Old aged fleet which is causing financial burden
on PIA as PIA still has 4- engine Boeing 747 which now is known as
gas guzzler as its has highest operating cost and the profit generating
Saudi Arabian route is now being operated in loss.

4. Passengers were not satisfied about the refund process as it was time
consuming.

5. PIA have highest employee ratio to per airplane. Which is a huge

financial burden on PIA.

6. Complaint of Employees as they were not properly facilitated

comparing to the other airlines.

8.2 Suggestions

I would like to give certain suggestions for PIA betterment and

profitability.
1. PIA should adopt transparent policy that employees should be
promoted on merit basis. And Chairman of PIA should be appointed
from with in the organization. Union should support it, it will motivate
the employees and PIA will grow in profit.
2. PIA should adopt good marketing policies so that it will bring higher
profit and maximum utilization of its available resources, Business
sector should be attracted to operate at full potential.
3. PIA should upgrade its fleet as it’s causing the airline higher operating
cost and PIA is incurring loss .PIA should purchase new Airplane with
twin engines these will reduce the operating cost of PIA.

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4. Airline should focus on the customer’s satisfaction, refund process
should be quick so that customer remains loyal to brand.
5. PIA should not induct new employees till the time they are needed on
the basis of my personal observation at Rawalpindi station I have seen
that a task which can be performed by person PIA had 3 employees for
that.
6. PIA should give bonus to the industrious and competent employees.
7. There should be control on the increase of fares, as mediocre are in
majority in Pakistan, and it is highly difficult for to even think about
the air traveling. Management should think over it and at least they can
start a new packaged flight twice a week having 50% fares.
8. Unnecessary facilities provided to the Government Department should
not be discouraged but with drawn as it causes financial losses.
Management should focus on computerized system up gradation and
implementation.
9. Management should hire the services of specialized IT personnel for
their system development and up gradation on time.
10. There should be clear and even distribution of work and only qualified
person should be appointed on jobs.
11. There should be improved service standards and that should focus on
quality.
12. PIA should offer its services of reservation and seat confirmation with
by SMS and flight confirmation message should also be sent via SMS
to the passenger.
13. PIA should give more incentives to its frequent flyer as it will generate
more brand loyalty by giving better incentives to the customers.

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 BIBLOIOGRAPHY

1. www.piac.com.pk
2. http://en.wikipedia.org/wiki/Pakistan_International_Airlines_destinati
ons
3. http://en.wikipedia.org/wiki/Pakistan_International_Airlines
4. Annual report of PIAC 2008.
5. An internship Report on PIAC by Miss. Asiya Khan MBA LUMS.
Lahore
6. (2006-2008)
7. www.google.com
8. PIAC in-flight entertainment magazine.
9. New Frontiers in HRD By Monica Lee, Jim Stewart, Jean Woodall
10. HR Department Rawalpindi.

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Dear Friend I made that contribution to help you do make your personal effort to change it a bit so that
it suits your requirement! Remember me in your prayers!

And if you need any other type of assistance or help you are most welcome! itsmoeen@hotmail.com

Internship PIAC Islamabad

2008

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