Majid Saleem Rana MBH-13-43

Zeeshan Ahmad MBH-13-40

Ch. Waseem Nazir MBH-13-38

Presentation By

Mam Aqsa.

Presentation To

Majid Saleem RanaMBH-13-43

TopicThe topic of our research report is the causes of losses to Pakistan International Airlines (PIA).

PurposeThe purpose of conducting the research is to find out the Areas of improvement of PIA and suggest remedies to over come the loss.

Source

we get most of the data from Articles, Annual reports, internet, PIA website, newspapers and media reports.

Why Pakistan International Airline (PIA) is going in loss since couple of years?

Problem Statement

Domestic Network (24) International Network (38)

PIA Domestic and International Network

48%

35%

17%

Ch. Waseem NazirMBH-13-38

Strategic Tools

Key Financial Ratios

1 Current ratio0.22 %

2 Quick ratio0.17%

3 Debt to total assets ratio1.44%

4 Debt to equity ratio-3.69 %

5 Inventory turnover 27.98 %

6 Fixed assets turn over 1.11 %

7 Total asset turn over 0.85 %

8 Gross profit margin.1392 %

9 Net profit margin -0.19 %

10 Return on total asset -0.16 %

Product Positioning Map

High customer loyalty

PIA

Low customer loyalty

Air BlueShaheen Airline

High Convenience

Low Convenience

Operates all around the country including Sakardu, Bahawalpur and Baluchistan etc.

Tariff charges are high compare to Air blue and Shaheen Air International

The BCG Matrix

PIA

Air BlueShaheen

High Medium Low

Medium

Low

High

RELATIVE MARKET SHARE POSITION

G

RO

WT

H R

AT

E

Zeeshan Ahmad MBH-13-40

SWOT Analysis

Strengths

A wide and huge web of domestic monopoly with 24 destinations

A wide and huge web of 38 International destinations

Government supports are there for any uncertain situation

It has strong brand recognition

Weaknesses

Over staffing

Lack of accountability & High corruption level

High charges as compared to other airlines

Large amount of debt

Opportunities

New destinations around the globe

Consumer loyalty towards the national air line

New better training programs to improve the quality of work force

Market Shares

Govt. subsidy on oil

Threats

Government instability is the major threat

Fluctuating oil prices

Latest Technology aircraft and air control system planes has been adopted by rivals

Large amount of debt and interest

Over Employment

Nepotism and Political involvement during recruitment & selection

Lack of experience relating to aviation industry for the top management

Lack of training facilities

Areas of improvement

Recommended Strategies

Right Sizing

Retrenchment or divestiture

Market penetration and Product development

Privatization

Should focus on the areas which contribute more in profit.

Those operations should be terminated which are continuously in loss in order to minimize the loss.

Reduce no. of employees by giving them early retirement in order to reduce cost.

Hiring the services of expertise to train management to improve their effectiveness and efficiency.

New training programs to improve quality of work force.

System of check and balance.

Should focus on Cargo service.

Conclusion and Recommendations