National University of computer & Emerging Sciences,

Lahore

Report on:
“PIA”

Submitted to : Miss Amna Khan Section: BS(BA)-1B

Group members:
1) Omaymah Nasir (22l-8451)

2) Hamza Khalid (22l-6432)

3) Zulaikha Shahid (22l-8445)

 The macro-environment encompasses all external factors that influence a firm.
Political, social, monetary, and technological factors are all included. They are
referred to as PEST factors.

PEST analysis is a macro environmental analysis technique. Continuous

environmental analysis should precede all aspects of planning. Because the airline
industry is heavily influenced by environmental changes and has undergone rapid
and dramatic changes in the last decade, this analysis is especially important to
PIA.
Macro Environmental Factors are as following:

POLITICAL FACTORS:
Political factors will have a significant impact on how businesses operate in the
airline industry as well as customer spending power. In recent years, the
government has been observed to play a dynamic role in increasing competition in
the airline industry. Several new domestic airlines, including AirBlue and JS Air,
have been granted licenses.
Pakistan has recently achieved some political stability. If PIA's management
believes that today's government will perform well (consistently), then more
investment will be made in the form of new planes and cutting-edge technology.
The overall industry will expand, resulting in more luxurious and comfortable
flights. Government policies have become more liberal as a result of the military
takeover

ECONOMIC FACTORS:

There are currently three major players in the airline industry: Pakistan
International Airlines, Airblue, Aero Asia, and Shaheen Airlines. Their target
market includes both domestic travellers and Pakistanis living abroad, particularly
in the United Kingdom and the United States. These countries have robust
economies and high purchasing power. Customers' purchasing decisions are
heavily influenced by the prices of competing airlines as well as the services
provided. Because Pakistan's inflation rate is volatile, consumer spending power
has suffered in the long run. In fact, growth in the Pakistani economy has resulted
in increased spending power, which has benefited the airline industry.

The new millennium's economy has been highly volatile; the September 11 attacks
revolutionized depends on. As a result, there is a global depression in North
America, SOUTH America, and the Caribbean.

SOCIAL FACTORS:

The social and cultural influences on business differ from one country to the next.
Pakistan's social structure is intertwined. The trend is currently changing as the
general public becomes more educated and pursues professional goals. Customers
are usually more aware of market conditions and available options, and they want
to get the most bang for their buck.
They spend a lot of time and money on entertainment, which increases the demand
for in-flight entertainment systems. Also, the use of airline services varies greatly
from person to person.
Hajj attracts a diverse range of customers. With the new regime, Pakistan's social
environment is becoming more liberal. The initiative to automate the check-in and
ticket booking process is unlikely to be well received by the general public (even if
it is feasible).

TECHNOLOGICAL FACTORS:

Technology is vital for competitive advantage which is a major driver of the

airlines industry. Major technological changes are occurring in the airlines industry
with innovations in the reservations and booking systems. In-flight entertainment
systems and auto check in counters are two examples of such innovations. Internet
plays a key role in e-ticketing as consumer can certainly reserve tickets or check
the status of the flight.
A key issue would be the extent, to which technological advancements (such as
Internet) impact distribution and cost synergies from industry consolidation, can
offset upward pressures on costs. PIA has always led the path of technological
innovations by introducing new technologies before its competition such as its auto
check-in counters which has helped it gain market share. It was the first airline in
Pakistan to install Sabre system followed by the market leader.

Micro Environmental Factors are as following:

Leading Market Position:

According to the PIA Annual Report (2008), PIA is one of Pakistan's leading
airlines, operating more than 800 daily flights. PIA transports approximately
150,000 passengers per month, making it one of the major domestic operators in
terms of passenger destination.
PIA had a 43.5% international market share and a 69.4% domestic market share.
At the end of 2009, PIA had a system-wide market share of 51.2%. Its strong
market position is fueled by consistently low fares as well as dependable service,
frequent and convenient flights, the use of new technologies such as e-ticketing
and self-service check-in terminals, comfortable cabins, and superior customer
service.

Superior Organizational Structure:

PIA has maintained its low-cost position. It was the first-class Pakistani airline to
use cutting-edge technology. Contributing factors include various Boeing and
Airbus series, as well as an efficient, high-utilization, and point-to-point route
structure.
PIA has a global strong network as well as international destinations. The network
of the company includes three of Pakistan's major airports, as well as major
international airports such as Dubai International Airport. With a strong network,
PIA can generate traffic for both domestic and international flights.
Debt:
PIA owes the government 42 billion dollars. Current and future debts may have
serious consequences for the company's stakeholders.

Dependence on Oil Prices:

Oil prices have a direct impact on PIA's sustainability, growth, and revenues. A
sharp increase in oil prices can seriously jeopardies any airline's long-term
viability. As a result of rising oil prices, many airlines around the world have
recently gone bankrupt.

Shifting Customer Needs:

The needs of air passengers are increasingly changing, as they are becoming more
and more price sensitive. If PIA succeeds in making its prices more competitive,
then the company will be able to gain significant market share.

Strong Competition by Airblue:

PIA is now competing against carriers such as Airblue and Shaheen Airline. PIA
remains Airblue’s strongest competitor because of the huge market it has gained
over time, strong brand image and customer loyalty.

The First International Service of PIA

As part of the Pakistan International Airlines Corporation Ordinance, 1955, Orient
Airways and Pakistan International Airlines formally merged on March 11, 1955.
Orient Airways ceased operations while the Pakistani government acquired a
majority stake in the airline. The new PIA had three L-I049C Super Constellations,
two Convair CV-240s, and eleven DC-3s in its fleet.
The newly relaunched airline also flew its first international route, Karachi-
London Heathrow Airport via Cairo and Rome, on newly acquired Lockheed L-
1049C Super Constellations. On domestic routes in Pakistan, the airline continued
to use DC-3s. In 1955, the PIA carried 113,165 passengers, a 50% increase over
1954. Initially, there was a lot of backlashes because the public couldn't understand
or justify the need for an international route when, in their opinion, other important
projects for a developing country should have gotten priority. However, PIA's
primary goal was and continues to be to serve the Pakistani community as a whole.
The provision of transportation to expatriates has remained one of the national
airline's top priorities. Furthermore, PIA earned significant foreign exchange
through international services, which it used to purchase aircraft and spare parts as
its fleet expanded.

Difficulties faced while going international:

On 3 December 1971, a French national's attempt to hijack a PIA flight from Paris
to Karachi was thwarted by French security forces. PIA began to sustain operating
losses and liquidity problems throughout the 1990s due to frequent pilot strikes,
issues with various vendors, over-staffing, and political interference in airline
management. Houston services also ended in 2006. Following the crash, on 5
March 2007, the European Commission banned all but 9 of PIA's 42-strong fleet
from flying to Europe, citing safety concerns over its ageing aircraft. The fleet of
Boeing 777s was exempted from the ban, but 15 aircraft were over 20 years old by
this point. PIA claimed that the ban was discriminatory and unjustifiable. Moving
forward to recent times, after EASA determined that the airline was not capable of
certifying and overseeing its operators and aircraft in accordance with applicable
international standards, PIA was barred from flying in European airspace for six
months, beginning on 1 July 2020, and then indefinitely, on 30 June 2020. This
decision was made shortly after it was discovered that at least one-third of all pilot
licences issued in Pakistan were fraudulent. The airline was also banned by the
United Kingdom and the United States by July 9, 2020.

Workplace Culture of PIA:

As PIA is an airline that is based in Pakistan so they do care about the country
morals and values, an example of this is that recently PIA took an action against
the clothing of Female hostesses. Where the flying crew of Pakistan International
Airlines (PIA) is required to wear undergarments at all times. The airline has
required all of its employees to wear underwear with their everyday attire. A memo
was sent to the general manager of the cabin crew. The memo was that “with
considerable concern, it has been noted that certain members of the cabin crew
choose to wear casual attire when travelling intercity, staying in hotels, and visiting
various offices. The airline's internal document states that such attire "makes a
terrible impression on the viewer and portrays a negative picture of not just the
individual but also of the organization."
(Current,2022).
As PIA is a public institution with autocratic leadership. Without consulting their
staff, the senior management makes the decisions. These decisions, such as the
purchase of new aircraft, the replacement of existing fleets, and adjustments to
ticket prices, are mostly driven by policy. So the workplace culture in PIA is
centralized due to the fact that PIA is owned by the state. All the employees in PIA
are meant to follow the orders that are sent by their senior management officers.
Every employee at PIA must exhibit entire responsibility through their attitudes
and refrain from acting in a way that directly opposes the goals of the company.
Administrative action is conducted against the employee in cases of abnormal
workplace behaviour in accordance with PIA's established policies.The POLICIES
AND PROCEDURES MANUAL VOL. I & II, which covers every facet of
employee behaviour, is followed when dealing with any human resources
difficulties.
In terms of training of the employees PIA has ATTITUDE-ENHANCING
TRAINING The Karachi-based PIA Training Center (PTC) offers training
programs to improve employees' skills, but there is little opportunity to improve
their attitudes (beliefs and emotions) through these programs (Wazir,2022).

Role of Culture:
If PIA believes that employee unhappiness or absenteeism is reducing their level of
production, the fundamental cause of these issues is found. If a legitimate
explanation is found, the employee is helped to make things right; if not, the
employee may receive a letter of warning. Through the "Suggestion Boxes"
positioned at several PIA sites, employees can voice their concerns with the
company. Additionally, there are quarterly employee coordination meetings when
all staff members can voice their opinions to their superiors and peers
(Wazir,2022).
The HR & Administration Department has a comprehensive Recruitment and
Selection Division in operation. The PIA high management makes decisions about
the qualifications needed for employment. An applicant is assessed using an
evaluation form based on traits like personality, talents, and qualifications. The
recruitment division starts the recruitment and selection process after receiving the
management's decision. The Human Resource Department is now fully operational
and has established policies and procedures under challenging conditions. In all
areas, new hires are being made with clearly defined levels of expertise and
competency. Regular new inductions will continue in order to adequately address
the shortages in these fields, both on the management side and especially the
operational side of cockpit crew, cabin crew, and ground engineers. At all levels, it
is company policy to promote employees. When PIA cannot locate someone with
the necessary skills, they hire outside candidates at market rates (Wazir,2022).
Employees at PIA are obligated to uphold a hostile-free work environment where
everyone is treated with respect and encouraged to contribute to the best of their
ability in an atmosphere of freedom and mutual trust, in accordance with the
company's "Business Principles & Ethics Policy." To lower levels of
dissatisfaction, employees are encouraged to express their problems and concerns
(Wazir,2022).

Economic Factors effects on Organization:

The Covid-19 outbreak has had a significant negative impact on the aviation sector
worldwide. Prior to the start of many of the global shutdowns, PIA implemented
proactive measures beginning in February 2020, including, Creating a "cash ICU,"
interacting with banking institutions, significant vendors, and suppliers to better
anticipate and handle cash flow crises arranging early return flights. 300,000
Pakistanis have been repatriated in total, many from places PIA had never before
travelled. switching over to remote work quickly.
adopting stringent operating guidelines to guarantee the security of the crew and
passengers.
Following the COVID-19 epidemic, PIA will continue to operate in an extremely
difficult and unpredictable environment. Cash flow management, inspiring and
keeping talent, and enhancing product and service quality and safety will continue
to be priority areas of attention.
Reference list
 Desk, N. (2022) Dress according to cultural, national morals, wear
undergarments: PIA, The Current. Available at: https://thecurrent.pk/dress-
according-to-cultural-national-morals-wear-undergarments-pia/ (Accessed:
October 22, 2022).
 Guest (no date) Pia vs airblue, pdfcoffee.com. PDFCOFFEE.COM.
Available at: https://pdfcoffee.com/pia-vs-airblue-pdf-free.html (Accessed:
October 22, 2022).
 Pia training center | linkedin (no date). Available at:
https://pk.linkedin.com/company/pia-training-centre (Accessed: October 21,
2022).
 Case study: Pakistan International Airlines - Future of the CFO & finance
function (2020) IFAC. Available at: https://www.ifac.org/knowledge-
gateway/preparing-future-ready-professionals/discussion/case-study-
pakistan-international-airlines-future-cfo-finance-function (Accessed:
October 22, 2022).