Pakistan International Airlines and Turkish Airlines are teaming up against Emirates Airline and Etihad Airways, who have taken much market share in the last few years. The struggling Pakistani airline, which is facing Dh6.46 billion in debt, signed a codeshare deal with the Turkish carrier last week to get access to over 100 destinations in Europe by feeding traffic to the carrier’s hub in Istanbul. This alliance will also help the airline is cutting costs by rationalizing their network.
This move underlines the competition between airlines in the Gulf and their rivals. Splitting journeys into 2 parts using a home hub allows the carriers, like Qatar Airways, Etihad and Emirates, to serve more markets. In a survey conducted by the Pakistani airline, they found that 81% of the total international traffic from their home country is being served by Gulf airlines.
Pakistan International Airlines managing director Aijaz Haroon says that they are losing passengers to these Gulf airlines. They were hindered in competing with them due to a lack of planes and limited flights to several Western countries, he explained. This tie-up with Turkish Airlines will immediately impact the company’s bottom line and executives, he added, as they will be able to earn Dh513.3 million in additional revenue from the deal, even in the worst-case scenario. He also noted that they ultimately chose the Turkish airline for the deal after holding discussions with Gulf carriers.
Meanwhile, Pakistan International Airlines has submitted a 5-year plan to its government, calling for debt forgiveness and an expansion of its fleet by 45 planes. Instead, the carrier will shrink its operations due to the alliance in an attempt to avoid losses.
(source:carrentals.co.uk)
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