LAHORE: The Pakistan International Airlines (PIA) has entered into a ‘code share agreement’ with Etihad Airways with questions being raised over what critics say is ‘little gain’ by the national flag carrier.

The PIA however is confident that this decision will help it develop new destinations. Code share means both airlines could book passengers on each other’s flights to destinations where they are operating. One acts as an operator while the other is a marketing partner.

“We have signed a code share agreement with Etihad Airways and this is PIA’s fourth such agreement after Turkish Airlines, Cathy Pacific and Air China. This will benefit the national flag carrier,” PIA spokesman Aamir Memon told Dawn on Monday.

He said this arrangement would benefit PIA by expanding operations and using its code on Etihad-operated flights as a marketing carrier and offer maximum choice to its customers to the destinations where PIA is presently not operating.

When mentioned that Etihad Airways will get more benefit than PIA under the agreement, Memeon said: “We lose business because the PIA does not operate on various destinations. No matter how big an airline is it has to go for this kind of arrangements (with other airlines). We are protecting our interest and benefiting our customers.”

However, some officials in the PIA and aviation industry Dawn spoke to expressed concern over the agreement, saying the PIA would be reduced to working as an ‘agent or representative’ of Etihad Airways as it would not get ‘exclusive rights’ for any destination. They said PIA’s previous experience had not gone well.

An official said code share would limit the ability of the PIA to market its own routes.

“The PIA is simply going to increase the market share of its competitor that is better organised and more efficient,” he said.

An aviation expert said the agreement would reduce the national carrier to a marketing agent for a foreign airline. He said with limited operations outside Pakistan the PIA would be collecting passengers for Etihad and eliminate its own chances of challenging any foreign airline for share in passenger traffic.

He said under the code share agreement, PIA will place its code and sale on Etihad-operated flights for international routes beyond Abu Dhabi as permitted under Air Services Agreement to Frankfurt, Rome, Madrid, Athens, Amsterdam in Europe; Washington, Chicago, Dallas, Los Angeles, San Francisco in North America; Nairobi in Eastern Africa; and Amman in the Middle East.

Similarly, the national carrier will place its code on 39 Etihad-operated Pakistan-Abu Dhabi route to Karachi, Lahore and Islamabad a week.

In contrast, Etihad Airways will place its code on 17 PIA-operated Pakistan-Abu Dhabi routes to Karachi, Lahore, Islamabad and Peshawar a week.

Published in Dawn, June 30th, 2015

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