Professional Documents
Culture Documents
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October 1
2013
SAIRA IQBAL
AFSHEEN KHAN
AREEBA IMTIAZ
MEHWISH ALMAS
SUBMITTED TO:
MISS UZMA
BBA II- B
SUBMITTED DATE
DATE:
Article No: 1
Thursday, 22 Mar 2012 9:35 pm NIMRAH AMJAD Karachi.
PIA is facing serious problems nowadays. Flight delays and cancellations have become the norm rather than the exception. The Pakistan International Airlines is also suffering from severe financial crisis. It is, in fact, passing through a critical phase because of poor management, lack of maintenance, corruption and financial issues. There are complaints of terrible service, long delayed flights, emergency crash landings, cancellation of flights, and shortage of planes. These issues create frustration among the passengers. They feel fear and life risk while travelling through PIA. PIA has, in all, 39 aircrafts in its fleet. A number of aircrafts have been grounded due to shortage of spare parts or overhauling. Latest news report claimed that PIA had grounded 18 planes. A recent PIA flight PK 303, from Lahore to Karachi, was 6 hours delayed on 15 March, 2012. The bad governance, poor performance and corruption are the major causes of its failure. Unfortunately, PIA is functioning with costs higher than returns. The airline charges are enormously high for both domestic and international flights. PIA claims that increase in oil prices and devaluation of Pakistani currency are the major reasons behind its deficit. PIA in the past was known all over the world for its excellent performance and superior quality. That was the golden period for PIA. Now PIA is going in loss. A couple of months ago, rumours circulated that the increased frequency of emergency landings by PIA were being orchestrated to tarnish its image and reputation. Investigation should be carried out to find out the truth. PIA should give primary importance to the safety of the passengers and make efforts to avoid any untoward situation. Several untoward incidents have occurred in the last decade. It is necessary to tackle such incidents seriously to minimize the losses.
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Article No: 2
PIA CRISIS: Monday, 13th January 2013 11:35 pm Muhammad Daheem Karachi. Saturday, December 03, 2011 - The Pakistan International Airlines is suffering from severe financial crisis. It is, in fact, passing through a critical phase because of poor management, lack of maintenance, nepotism, corruption and financial issues. There are complaints of terrible service, long delayed flights, emergency crash landings, cancellation of flights, shortage of planes, unclean toilets that smell from a distance and non-serious attitude of the administration. These issues create frustration among the passengers. They feel fear and life risk while travelling through PIA. The Airlines is at the brink of disaster. It needs exemplary leadership, qualified and merit based staff and technically strong administration to improve its performance and save it from the clutches of the wolves. PIA has, in all, 39 aircrafts in its fleet comprising of 4 Boeing 777-200 ER, 3 Boeing 777-300 ER, 2 Boeing 777-200 LR, 6 Boeing 737-300, 5 Boeing 747-300, 12 Airbus A310-300 and 7 ATR 42-500. A number of aircrafts have been grounded due to shortage of spare parts or overhauling. These include Boeing 747s, Boisiseing 737s and Airbus A 310. It is generally believed that PIA high-ups are responsible for the inconvenience of the passengers. The whole system needs overhauling. PIA is facing serious problems. The major problems faced by PIA are increase in oil prices, overstaffing, devaluation of local currency, political interference and its weak financial position since the last decade. PIA has suffered huge loss of more than 64 billion rupees from 2005 to 2008. It has also suffered huge losses in 2009 and 2010 particularly due to increase in the price of the fuel and devaluation of Pakistani rupee. It is, now, just like a white elephant. The bad governance, poor performance and corruption are the major causes of its failure. The Pakistan International is a big organization with more than 18000 employees. PIA was known all over the world for its excellent performance and superior quality. That was the golden period for PIA. But now it has lost his luster. Flight delays and cancellations have become the norm rather than the exception. Naturally this situation cannot be tolerated for unlimited period. PIA will have to overpower its weaknesses. It has failed to resolve issues of its organization. The average ratio of staff should not exceed 100 per aircraft while PIA enjoys more than 400 employees per aircraft. It is overpopulated and needs to cut its coat according to its cloth. It needs some hard decisions by the administration to run the system smoothly. Pakistan International Airlines should give primary importance to the safety of the passengers and make efforts to avoid any untoward situation. Several
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untoward incidents occurred in PIA in the last decade. It is necessary to tackle with such incidents seriously to minimize the losses. The passengers should not suffer in its custody. PIA has problem of maintenance and repairs. It is stated that tender for the maintenance of the aircrafts has been given to a company that does not have international reputation. It is further stated that PIA tends to sublet dubious and substandard companies with no international credibility and little experience for maintaining its fleet. Saleem Irshad, retired engineer, claims that high-ups of PIA have financial stake in these small and substandard companies. The obscure vendors, hired by PIA, are one of the major problems. They are just like risky shots in cricket. The airline that once assisted other airlines is now losing its control over itself. Its high time the government restructured PIA. It should discard its old and obsolete fleet of aircrafts and have new one to improve its overall performance. Sagging seats and soggy seat covers, messy floor carpets, dirty and gritty outlook, malfunctioning toilet doors, rattling planes and failing equipment need refurbishment, better maintenance and planning. It is necessary for PIA administration to put on considerable effort to avoid anxiety of the travelers. It is pertinent to mention that one of PIA aircrafts was inspected at Paris Airport by the inspectors of Safety Assessment of Foreign Aircraft (SAFA) while en route from Paris to Lahore. They detected several snags in the aircraft. The organization warned PIA to overpower the shortcomings or face the consequences. The team detected fuel leakage from one of the engines of Airbus A-310. In consequence passengers were evacuated in emergency. Another aircraft of PIA had been detained at a French airport owing to safety reasons. The plane was returning home from Milan via Paris. The European aviation inspectors checked it at Charles de Gualle Airport, directed the crew to off-load the passengers and then detained the aircraft. The team pinpointed 39 snags including fuel leakage from Airbus A-310. The following faults were found by the inspecting team: one panel right of NLG door bent; right fairing (inlet) cracked and bent; one latch on each engine closed by lock wire; fuel leakage on the Engine 2 pylon at the end of refueling; hydraulic leak from steering actuator; fuel leakage from the Engine 1 pylon, both wing root and horizontal stabilizer; on right wing root external one thermal protector tightened up with locking wire; engine No 2 inboard fire seal damaged; temporary repair performed on engine No 1 fire seal outboard; hydraulic seepage on wheel No 1 brake assembly etc. It is a long list of snags showing the real efficiency of the PIA administration. It is stated that crew failed to manage a quick and correct emergency evacuation of the aircraft. PIA should assure full implementation of safety standa rds in light of inspection report by SAFA inspectors. Unfortunately PIA is functioning with costs higher than returns. PIA claims that increase in oil prices and devaluation of Pakistani currency are the major reasons behind its deficit. It needs remarkable effort and money to improve its ranking in the world airlines. A four-day strike by Pakistan International Airlines employees caused huge financial loss.
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Article No: 3
PIA Needs Attention Saturday, 18th June, 2012 Bismah Anzar, Karachi There was a time when PIA indeed was an airline that people could look forward to as a good alternative to the high prices of private airlines. But like almost everything of our countrys glorious possessions this airline could not be an exception due our corrupt former rulers. It is said that high fuel prices were also responsible for the decline and near bankruptcy but this is a small factor to be blamed for such a large issue. Though it is acceptable that it has recently faced global economic recession but the real problem is with the people running or rather ruining it. Every airline of the world has set some standards as to which air crafts will stay in their fleet and which need to be grounded. Here the case is different, the officials of PIA totally neglect the vital area of maintenance of crafts as air crafts are the source that will generate them money, but they totally ignored their condition and now the situation is that one after the other their air crafts are becoming useless thus disturbing , delaying and canceling flights that is not only irritating and reducing the customers but also causing serious blows to the existence of the airline itself. Even after being imposed bans by foreign countries the PIA administration could not open eyes and give attention to it. It is also feared that a plan has been chalked out to replace this airline with a new one but even if this is not true, the truth is that PIA indeed needs attention. If we will not care about our countrys pride no one is going help out in future then.
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Acknowledgment
We wish to express our sincere appreciation to those people who have contributed either directly or indirectly to this report. We wish to thank to my teacher MISS UZMA gratefully for her invaluable guidance in making this report we also gratefully acknowledge my all group members who work on the value of being organize and corporate a lot on every step of making this report possible.
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Table of Contents:
Executive summary...4 Introduction..5 History..5-6 Organizational chart...7 Major problems of PIA: 8-19 Financial crises9-10 Flight delays..10-11 Poor customer service..11-12 High ticket Prices12-13 Mishaps.13-14 Corruption14-15 Over recruitment15 Outdated technology16 Maintenance problem.17-18 Poor management.18-19 Conclusion...20 Recommendation .....21 Reference..22
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Executive Summary
The importance of airline has been increased because of globalization where interaction of one country with other accomplished through airline. We have an honor to work for our project work about Airline. This report includes the information about Pakistan International Airline, the introduction of the PIA and the problems which are being faced by national flag carrier. The purpose of selecting this topic is to know the reasons that why PIA an airline which was one of the best airline of the world and the strong pillar of Pakistans economy, why it is facing loss from many years? The passengers are continuously switching to the other airlines and PIA is consistently going down, what is the reason behind this. In this report we developed some strategies to overcome the problems that PIA facing that help PIA in recapturing the lost passengers.
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The airline secondary bases include Peshawar, Faisalabad, Quetta, Sialkot and Multan, from which it connects the metropolitans cities with the main bases, the Middle East and the Far East. The airline is owned by the Government of Pakistan (87%) and other shareholders (13%).
History:
BACKGROUND
When Pakistan was founded in 1947 it comprised two territories on either side of the expanse of India. It was in this unusual circumstance that Pakistan International was formed. Despite wars and economic trouble, the carrier survived to grow and prosper. Today it maintains a sizeable international route network, in addition to its services closer to home; with a modern and expanding flee.
flew its first service with the Super Constellation on 07 June 1954 on the route linking Karachi and Dacca (now Dhaka), which were the main cities of the country's western and eastern halves, of which the latter is now Bangladesh. On 1 February 1955 the airline flew its first international service, between Karachi and London via Cairo
HISTORY OF PIA THAT INTRODUCED THE THING FIRST TIME IN ASAIN COUNTRYIES:
PIA was the first airline from an Asian land country and the first airline from a Muslim country to fly the Super Constellation. The first Asian airline to operate a jet aircraft PIA set up Pakistan's first planetarium at Karachi. The first airline in South Asia to introduce auto-ticketing facility. The first airline to introduce a second route to People's Republic of China over the mighty Karakoram Mountains. First airline in South Asia to offer the facility of seat reservation through mobile phone.
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SP assistant to chairman
Secretary (PIA)
Manager director
Director coordination to MD
SVP engg,
SVP Finance
Director finance
SVP sales
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Solution:
First review its management problems and try to solve them. Honest employee and professional. Enough funds.
Strategies:
The PIA must have its strong infrastructure that made the TQM more effective if infrastructure is well developed after implementing of TQM is bound to give revolutionary growth as well as performance. The total organizational involvement will help the PIA to overcome their financial lose, by total involvement t of employee and top manger that build trust and confidence and united force to achieve organizational goal. Empowering employee give
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continuous improvement, TQI increase competitive advantage and reduction in wastage and save the man power and fuel etc. and apart from it employee and customer get satisfied, in Result Company will get remarkable profit. For making profit PIA should reduce their expenses like facilities such as air tickets allowed to the employees including Chairman/MD and their families should be stopped for five years. Only official visits are allowed that too in economy class. To make the company profitable the government should sell oil to aviation companies without charging sales tax and other taxes on the fuel, which will immediately reduce the amount of money being spent on oil. For a limited time period. Once the airlines show a positive cash flow, then the government can start collecting taxes again.
Solution:
Management should be proper. Give proper information to them. Good technologies must be there to handle the entire technical fault. Make your customer satisfied.
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Strategies:
The PIA want to solve that problem with the help of TQM must have to need to build the foundation; to build good management the every employee from top to bottom work together and that focused on customer satisfaction, used information system or internet to interlink with customer and all sub departments that tell about the flight delays and other problems,. Maintain of machines of right quality, right quantity, right time and right place and must have effective cost so they technical faults not arises ,continuous improvement process needed, and advance technology must be there.
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Solution:
Provide customer good facilities. Provide discount benefit to loyal customer. Advanced machinery should be used. Increase the number of plan.
Strategies:
The TQM focused on the customer satisfaction, understand the customer needs (implied and stated need) by value added you can make your customer satisfied the process must be efficient and as well effective, do it right first time. And quality improvement must be there, and train the employee to talk with the customer in a polite way.
Solution:
Make new and effective plans and control the quality and make the customer satisfied.
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Strategy:
The kaizen GEMBA help PIA to control the quality by elimination of wastage leading that reduced the expense of the fuel, and focused on the continuous improvement that (reduced the high ticket price) that help the PIA to achieved the highest profit and customer satisfaction.
5. Mishaps: Problem:
Occurring every day in PIA is just because of carelessness of management and engineers printing a bad image of PIA . 97 % of all air accidents occur due to human error. During the last twenty years or so , induction in PIA was not purely on merit which resulted in the decline of the airline as a whole. Moreover , emergence of new airlines in this region offering handsome salaries to its employees as compared to PIA resulted in the trained manpower leaving the airline, which has created a huge vacuum of expert staff for the airline, especially in the technical departments i.e. engineers and pilots. All these things are the root of this problem. There have been many mishaps some are discuss below: A loading truck collided with Pakistan International Airlines (PIA) aircraft at Kuwait airport on Saturday causing severe damage to its engine, (Express News reported).
The runway at Muscat International Airport was closed for four hours after Pakistan International Airlines aircraft with malfunctioning landing gear blocked the runway after touching down.
Solution:
Todays sophisticated aircraft is not meant to crash due to me chanical problems but also the human error also. It only requires good maintenance and handling by trained pilots & engineer and you also need good governance to over look these things.
Strategies:
There should be a top to bottom perfection to solve this huge problem: Detecting the faults occurring in the aircrafts through TQM. They should follow Japanese style of management.
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Training should be given to make employees motivated and productive.. Hire the qualified, experienced and technical pilots. Set proper airway routes and directions
6. Corruption Problem:
The corrupted governance, poor performance and corruption are the major causes of its failure. It is observe that friends of our former president are the major shareholder in PIA which results in PIA bankruptcy. Without the fall of PIA, Air Indus an airline like PIA cannot operate as it is pinning its hope on PIAs large fleet of aircraft to be bought by this company. PIA is a fine example of failed policies, and a case of current governments evil inten tions to make PIA a thing of past. PIA has recently faced global economic recession but the real problem is that its people are not running it infect they are ruining it.
Solution:
Proper management and controlling plans should be made to improve the overall performances of PIA. It should create Goodwill among its customers.
Strategies:
Internal politics should be omitted. Total quality recruitment. No favoritism among employees. Fire those who are not fruitful for the organization. Value added services should be given to attract or retain customers.
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Communication channels or networking should be strong to neglect propagandas that are being played for this organization
7. Over Recruitment:
Problem:
Naturally this situation cannot be tolerated for unlimited period. PIA will have to overpower its weaknesses. It has failed to resolve issues of its organization. The average ratio of staff should not exceed 100 per aircraft while PIA enjoys more than 400 employees per aircraft. It is overpopulated and needs to cut its coat according to its cloth. It needs some hard decisions by the administration to run the system smoothly. Past three years over recruitment of people which had suffered losses worth Rs100 billion in the same time period?
Solution:
Pakistan international airline need rightsizing. PIA should recruit that people who are productive and focused on the organizational goal.
Strategies:
Implementation of TQM various practices successfully are positively related to HR function. Rightsizing of current employee should be based on total quality recruitment that has a zero defect recruitment and right first time selection, and the employee not able to fulfill the criteria downsizes that employees. The standard performance should totally base on the customer care indicator. The PIA should downsize those employees who are appointed as political ground because most of them are more like a burden on P.I.A expenditures as they are getting salaries for nothing. They are not providing any kind of benefit to the organization.
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Solution
Heavy investment Great capital. Advancement in technology Greater manpower.
Strategies:
There should be quality control of thing and quality improvement must be there to have great capital, the employee should drive out of the fear and consider work standard carefully and the employee must have the skill that are required, the technological advancement come from if the company focused on the targeted goal and reduced expenses.
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Solution:
It should discard its old and obsolete fleet of aircrafts and have new one to improve its overall performance. It needs proper concentration for maintenance and health concern to meet international standards.
Strategies:
The strategy that follows over here is 5s housekeeping 1. cleanliness for floor carpet, seat cover, dirty and gritty outlook malfunctioning toilet it create good working environment and elimination of accident, and decent appearance of the organization before the guest and visitors come. 2. Orderliness: proper arrangement of equipments to make the work fast without wasting the effort time and material. 3. Clarity the definite clarity about plane working or not and knows about everything and should be clearly define. 4. Tidiness avoid the mixing of the product it will save your time and reduced the re work. 5. Discipline must be there in every organization to work effectively.
10. Problem:
Poor Management:
Poor management is also important cause for the existing situation of the organization. Employees are not in control of management so employees do what they want and so do managers. Some policies from management is also costing the organization, for instance, Emirates Airline use only two employees per plane whereas in PIA. There are five Employees per plane that means PIA is overcrowded which is definitely unnecessary, and by paying these
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additional employees it is costing a lot to the PIA. The other reason is misuse of funds; most of the funds were used for lavishness by managements instead of using- it on the fleet to make it considerable for the international standards.
Solution:
Proper management must be there. The management should plan to deal with this issue. The management should redesign their business process. Implementation should be there for plans. Proper controlling should be on regular bases.
Strategy:
For Long term achievement managers vision should be SMART (Specific, Measurable, Attainable, Realistic and Time bound). Technical knowledge must be improved about the product, process and its usages to: increase product quality Better applicability longer life of a product Enhance customer Satisfaction Bring down cost of production to better utilization of men, machines and material. Management should also consider 3 Ms of TQM MURI MURA AND MUDHA To avoid wastage both material and time. To reduce over burdening from people, equipment and resources. To avoid lack of standardization or uneven Should implement Eliyahu M.Goldratts of MURA theory that focus on the weakness point of the organization and then keep on strengthen on weakness to make the organization management more powerful and effective in offering a complete solution to organizational problem. All problems. Management should also consider Two-Way Communication so; employees can prove to be very effective in improving the operations as they are the ones who manage them. Therefore, a top-down approach should be replaced with two-way communications. In this way, the employees would feel motivated and valued as they would be included in decisionmaking.
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Conclusion:
The final conclusion of this report is that No doubt PIA is still a strong brand name in Pakistan. The people of Pakistan want to travel through PIA. But they say that they are compelled to travel through other airlines because of above reasons. So its the time when the management and government of Pakistan need to take some serious steps to uplifting of PIA because Pakistan is now facing economical and inflation crises so if PIA can dependent than the day is not far when it will start contributing in the countrys economy by adding its revenue in it. We all hope that in the next few years
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Recommendations:
Needed better functioning of human resource and administration department Management is needed to perform it responsibility professionally. Reducing costs and trying to achieve more market share by combining the organization. Marketing department must deliver in order to create a strong figure for the organization. It must be responsible for creating more sales and getting more market share. Providing awareness about the good characteristics of the organization. Getting information on related field and report to the top officials. Coping with fuel rising prices in a way as most successful airlines are doing Modernizing the airlines fleet is badly needed as well proper maintenance of the fleet is required. Must take advantage of the increment in the air transportation especially towards Middle East countries and India. Better and modern functioning of training and development department Need for accountability.
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Reference:
http://pakobserver.net/detailnews.asp?id=128193 http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/national/31-Jul-2013/megacrisis-hits-pakistan-international-airlines https://www.google.com.pk/?gws_rd=cr&ei=xIJKUteBCs7n4QT2qYGwCw http://x.dawn.com/tag/pia-crisis/ http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/11-Sep-2013/piacan-fly-out-of-crisis-ahsan http://dawn.com/news/1024882/chitral-people-seek-rebate-in-pia-fares
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