The Pakistan Aviation Experience

Pakistan’s aviation sector is a vital component of the nation’s economy, contributing to job creation, regional connectivity, and foreign exchange earnings. With 69 airports, including major hubs like Karachi, Lahore, and Islamabad, the sector serves millions of passengers annually. Islamabad International Airport (IIAP), operational since 2018, is the second-busiest airport in Pakistan, handling 6 million passengers in 2023. Despite its growth, the sector faces challenges such as regulatory inefficiencies, high costs. This analysis will examine the current state of Pakistan’s aviation industry, proposes strategies for improvement, and outlines specific measures to increase passenger numbers at IIAP.

Current State of Pakistan’s Aviation Sector

2.1 Economic Contribution and Growth

The aviation industry employs approximately 400,000 people and supports 1.3% of Pakistan’s GDP through direct and indirect contributions. In 2023, Pakistani airports handled 14.8 million passengers, with IIAP recording a record
6 million passengers, including 4.5 million international and 1.5 million domestic travellers. The sector has shown resilience post-COVID, with passenger traffic recovering steadily. Major airlines like Pakistan International Airlines
Airblue, and SereneAir dominate, while low-cost carrier Fly Jinnah are gaining traction.

2.2 Challenges Facing the Sector

• Regulatory and Operational Inefficiencies: Bureaucratic hurdles, outdated technology, and inconsistent policies deter investment and hamper efficiency. For instance, high taxes on air tickets increase fares, making air
  travel less affordable.
• Infrastructure Limitations: While IIAP is modern, many regional airports lack adequate facilities, limiting connectivity. IIAP’s current capacity of 9 million passengers annually is insufficient for projected growth.
• High Operational Costs: Domestic flights are expensive compared to regional peers (e.g., $0.064 per mile for Karachi-Islamabad vs. $0.049 for Delhi-Mumbai), reducing competitiveness.
• PIA’s Struggles: PIA, the national carrier, faces financial losses and reputational damage due to incidents like the 2020 pilot license scandal, which led to international bans.

2.3 Opportunities for Growth

• Rising Demand: Pre-COVID forecasts predicted 180% growth in Pakistan’s aviation sector over 20 years, driven by a growing middle class and tourism potential.
• Strategic Location: Pakistan’s proximity to the Middle East, a key destination for 85% of its international.
• Government Initiatives: Investments in infrastructure, such as IIAP’s expansion and the new Gwadar International Airport, signal commitment to growth.

Strategies to Improve the Aviation Sector

3.1 Regulatory and Policy Reforms

• Upgrade Regional Airports: Modernize facilities at airports like Faisalabad, Multan, and Quetta to improve connectivity and support tourism. This would alleviate pressure on major hubs like IIAP.
• Adopt Smart Technologies: Implement biometric check-ins and AI-driven air traffic management, as seen in the UAE, to enhance efficiency and reduce wait times.
• Expand Cargo Capacity: Leverage IIAP’s status as Pakistan’s largest cargo airport by developing dedicated cargo terminals, attracting logistics companies.

3.3 Operational Efficiency

• Modernize Airline Fleets: Encourage airlines to invest in fuel-efficient aircraft to reduce costs. PIA’s aging fleet contributes to high operational expenses.
• Promote Low-Cost Carriers: Support the entry of budget airlines, like Air Arabia’s joint venture with Lakson Group, to increase competition and affordability.
• Improve Customer Experience: Enhance in-flight services, loyalty programs, and airport amenities to boost passenger satisfaction and repeat business.

3.4 Economic and Investment Climate

• Attract Foreign Investment: Offer incentives like tax breaks for airlines and airport operators investing in Pakistan.

4. Increasing Passenger Numbers at Islamabad International Airport

4.1 Expand Capacity and Infrastructure

• Terminal Expansion: IIAP’s current capacity of 9 million passengers is projected to reach its limit soon. The planned expansion to handle 25 million passengers by 2024 should be accelerated, including adding a third runway and more gates.
• Commercial Development: Develop duty-free shops, hotels, and entertainment facilities to attract transit passengers and boost non-aeronautical revenue.
• Improve Connectivity: Enhance road links via Srinagar Highway and GT Road to make IIAP more accessible from Islamabad and Rawalpindi.

4.2 Attract More Airlines and Routes

• Incentivize New Airlines: Offer landing fee waivers or marketing support to attract international carriers, especially from Europe and North America, where major hubs like Amsterdam and Frankfurt remain unserved
  from Pakistan
• Expand Middle East Routes: Given that 83% of Pakistan’s international seats are to the Middle East, increase flight frequencies to Dubai, Riyadh, and Doha, and explore new destinations like Abu Dhabi.
• Promote Domestic Connectivity: Introduce more domestic routes to underserved cities like Sukkur and Turbat, using smaller aircraft to improve regional access.

4.3 Enhance Marketing and Tourism

• Promote Islamabad as a Gateway: Market IIAP as the primary entry point for tourists visiting northern Pakistan’s scenic destinations, such as Gilgit-Baltistan and Khyber Pakhtunkhwa.
• Leverage VFR Traffic: Target the Pakistani diaspora in the UK, US, and Middle East with promotional fares, building on the success of new routes by British Airways and Virgin Atlantic to Lahore and Islamabad.
• Host Aviation Events: Organize air shows or travel expos at IIAP to showcase its facilities and attract global attention.

4.4 Improve Passenger Experience

• Streamline Operations: Reduce immigration and security wait times by increasing the number of counters (currently 42) and adopting biometric technology.
• Enhance Amenities: Upgrade food courts, lounges, and Wi-Fi services to compete with regional hubs like Dubai International Airport.
• Focus on Safety: Publicize robust safety measures to rebuild confidence.

4.5 Leverage Strategic Positioning

• Position as a Transit Hub: Market IIAP as a stopover point for flights between Asia and Europe, capitalizing on its strategic location and modern facilities.
• Collaborate with Airlines: Partner with carriers like Emirates or Qatar Airways to offer codeshare agreements, increasing transit passenger numbers.

5. Seasonal Routes from Pakistan: Benefits for Airlines and the Exchequer

Seasonal routes capitalize on peak travel periods, such as religious pilgrimages, tourism, and diaspora visits, to boost airline revenues and government earnings. These routes are typically operated during specific months to align with demand, reducing operational costs during off-peak periods. Below is a table outlining proposed seasonal
routes, their benefits for Pakistani airlines, and contributions to the national exchequer.
For Airlines: Seasonal routes align with peak demand, ensuring high load factors (80-90%) and profitability. For example, PIA’s resumed Paris route in January 2025 targets diaspora and business travellers, while Skardu flights
leverage summer tourism to northern Pakistan. These routes reduce financial losses from low-demand periods and support fleet utilization.
For the Exchequer: The government earns through ticket taxes (approx. 20% of fare), airport fees ($25-$30 per passenger), and overflight fees for international routes ($200-$300 per flight). In 2019, Pakistan lost $50M in
overflight fees due to airspace closures, highlighting their importance. Seasonal routes could add $15-$20M annually to the exchequer, assuming 140,000 additional passengers.
Assumptions: Passenger estimates are based on historical data (e.g., 6M passengers at IIAP in 2023) and market trends. Ticket prices and taxes are derived from sources like KAYAK and Cheap flights. Actual contributions depend on route success and geopolitical stability.

Pakistan’s aviation sector holds immense potential to drive economic growth and connectivity, but it must overcome significant challenges to realize its full capacity. By implementing regulatory reforms, investing in infrastructure,
and promoting low-cost carriers, the sector can enhance its competitiveness. For Islamabad International Airport, increasing passenger numbers requires a multifaceted approach: expanding infrastructure, attracting new airlines,
enhancing tourism, and improving the passenger experience. With strategic investments and policy adjustments, IIAP can solidify its position as a leading aviation hub, contributing to Pakistan’s economic development and global
connectivity.