The perception that the proposed changes in the National Aviation Policy (NAP) 2015 will cut down the existing traffic rights of foreign airlines is misplaced. Ill-informed pundits are misleading the Pakistan International Airlines (PIA) chairman and the aviation adviser in this regard.
The fact is that air traffic rights are the function of bilateral air services agreements (ASAs) signed between two governments. They have little to do with current or past aviation policies. Introducing any number of changes in aviation policy will not affect the traffic rights already in place. The only available course of action is to modify existing bilateral ASAs. However, this cannot be done unilaterally.
No open-skies agreement has been signed with any country after the approval of NAP 2015. The last agreement was signed in 2012 with Saudi Arabia. Open-skies agreements with the United States, United Kingdom, Sweden, Norway, Denmark, and Switzerland were signed between 1998 and 2002 and the one with Spain was in 2008. Karachi-Dubai and Karachi-Singapore routes were declared open-skies on the principle of reciprocity in 1998.
The proposed changes in aviation policy will not affect existing agreements with other countries. The government should not subscribe to the superfluous idea of undoing bilateral ASAs unilaterally or even modifying them bilaterally
In 2002, Pakistan asked United Arab Emirates, Qatar, Oman, Bahrain, Kuwait, Thailand, Singapore and Switzerland to hold talks on traffic rights. Most of them refused. A few countries that sat down for talks did not agree to cut down even a single flight. The option to terminate these agreements was not exercised because that would have brought extreme harm to Pakistan’s foreign policy interests.
For example, how would the country terminate its bilateral ASAs with the United Arab Emirates and Qatar? Well, we would need to give one-year advance notice to them through the International Civil Aviation Organisation (ICAO).
Done deal, right? Not yet.
Firstly, the consequences of ending bilateral ASAs with the United Arab Emirates and Qatar would halt direct air travel services to and from these diplomatically significant nations. In the absence of direct air services between, say, Pakistan and the United Arab Emirates, about 1.6 million Pakistanis working there would be forced to travel through a third-country airport. Air travel between Pakistan and Qatar would be even more challenging because of limited options of travelling through Iran or Iraq only. Consequently, air travel would not only be twice as expensive, but thrice as inconvenient in terms of time and hassle.
Secondly, termination of ASAs with the United Arab Emirates and Qatar would suspend exports to these two countries. At present, hundreds of tonnes of perishable goods — meat, seafood, vegetables and fruits — are being exported on a daily basis from various cities of Pakistan through airlines of both countries. This would stop altogether. One can imagine the immense loss of business for local exporters and its negative impact on foreign exchange inflows.
Thirdly, it would result in a severe diplomatic crisis and put the jobs of Pakistani workers in the United Arab Emirates and Qatar at risk. The ensuing diplomatic row might result in the ejection of hundreds of thousands of countrymen, increasing unemployment and causing an unaffordable loss of billions of dollars in remittances.
Aviation policies only provide guidelines — general and technical — which are to be applied selectively, and not across the board. Strategic interests dominate smaller priorities (local airline profitability) when building bilateral relations. Larger public interests include the promotion of trade, tourism, economy and socio-political relations. In view of the airline business, and contrary to the popular perception, the principle of reciprocity and level playing field form the basis for negotiating bilateral ASAs. This can be seen in all ASAs that Pakistan has signed so far.
PIA is shrinking and crumbling under the weight of its own inefficiencies. Plugging holes here and there will make little impact on its corporate culture. The issues specific to state-owned enterprises (SOEs) and political compulsions cannot be overcome permanently without privatisation. The only possible option perhaps is to shut down the airline and raise another one with a different brand name. This will eventually save taxpayers billions of rupees.
Every successive government has tried to fix PIA but left it in a bigger mess than the one it inherited. The present government may also be tempted to do the same without any success. The sooner the government realises it, the better it will be for taxpayers.
The proposed changes in aviation policy will not affect existing agreements with other countries. The government, in its desperation, should not subscribe to the superfluous idea of undoing bilateral ASAs unilaterally or even modifying them bilaterally. It should instead accept the fact that SOEs cannot compete with the private sector because of the inherent corporate governance issues associated with permanent employees.
The writer is an air navigation services expert
Published in Dawn, The Business and Finance Weekly, April 8th, 2019