Without any warning came the proclamation that the Pakistan International Airlines (PIA) was shutting down its New York City operations. The argument made was that the expenses incurred by PIA on flying to New York did not make financial sense to the company anymore. Five weekly flights would fly to New York and three other American cities but PIA is now considering surrendering the route altogether. With a significant population of expatriates living in the United States, this decision predictably evoked great hue and cry.
On November 22, 2017, PIA Chairman Irfan Elahi appeared before the National Assembly’s Standing Committee on Parliamentary Affairs to make the claim that, last year, the airline incurred losses of 1.5 billion rupees from its New York operations. He argued that the airline had been saddled with such losses for the past 10-12 years.
When approached, PIA spokesman Mashood Tajwar explained that the route to New York involved a stopover in Manchester. This means that the cost to fly to New York also included airport and cargo handling charges incurred in Manchester. Negating the notion of surrendering the New York route, he termed it the suspension of New York operations.
Notwithstanding the operational details, if PIA’s official version is indeed considered, it begs the question: why can’t New York operation be merged with Toronto operations, given that PIA flies non-stop to Toronto.
The additional costs incurred in Manchester are a valid concern, even though the stopover in Manchester is primarily for security checks. Passengers cannot disembark at the airport while the number of new passengers from London to New York is also not significant.
Meanwhile, when costs are compared between the New York route and the Toronto route, there is great similarity in the finances expended. The fuel cost is almost the same as is the crew cost (cockpit crew and cabin crew). Costs for landing an aircraft, parking and housing it are the same, and the turnaround costs (time during which the aircraft must remain parked at the gate) are also the same. Some insiders question why one route is considered profitable while the other has been shut down.
Notwithstanding the operational details, if PIA’s official version is indeed considered, it begs the question: why can’t New York operation be merged with Toronto operations, given that PIA flies non-stop to Toronto. Official word is that Toronto itself is a profit-making route and therefore cannot be saddled with the burden of passengers heading to New York.
On the surface, the logic is sound. But scratch the surface, and the money involved becomes more apparent.
Indeed New York is a hub that connects various flights with different destinations, some not even in the United States. Routes are not just obtained for a substantial sum of money; their approval is contingent on factors such as power connections and diplomatic relations. And once surrendered, they cannot be re-obtained within a matter of days or months.
In the case of New York, a route surrendered means that flight operations have been given up for good since there are a limited number of slots available. Etihad Airways, for example, is a recent phenomenon. And when they applied to the John F Kennedy Airport for a slot, they were turned down simply because the Americans had no space to accommodate another airline.
But PIA can also surrender the route in favour of another airline. Word from the inside is that this route is being surrendered to Etihad Airways, although Tajwar denies such an eventuality.
“We are locked in discussions with the Americans to provide us permission to fly directly to New York,” he says. “We aren’t surrendering the route to any Middle Eastern airlines.”
Published in Dawn, EOS, November 26th, 2017