Pakistan International Airlines Effectiveness

INTRODUCTION

The primary theme of the project is to critically analyse Pakistan International Air travel also to appraise the amount of success of the company. It includes strategic, financial and reference management analysis. That is carried out in three parts. Overall tactical position is scrutinized and exterior and internal environment is assessed through different models such as SWOT and PESTLE STEEP evaluation in the first part associated with an assignment. The next part can be an overall overview of human source of information management in PIA and different approaches because of their employee's retention and performance are thoroughly assessed as to point out their weaknesses and known reasons for those flaws in overall system. The ultimate part is the ratio analysis which assists with analysing the financial position of the business and impact of tool management decisions on organisation's progress and stability.

INTRODUCTION OF PIA:

Pakistan International Airlines Corporation (PIAC) is the top quality air travel of Pakistan using its head office due to Jinnah AIRPORT TERMINAL in Karachi. PIA is one of the major airlines in Asia, operating slated services to 24 domestic places and 39 international vacation spots in 25 countries across Asia, Europe and THE UNITED STATES. Its main bases are in Karachi, Lahore and Islamabad. (Khan A. , 2008).

ANALYSIS OF Romantic relationship OF STRATEGIC LEVEL PLANNING AND LOWER LEVEL

Relationship between higher and lower degrees of management is the fact Planning is performed at more impressive range and execution is performed by the lower level but the lower management is not involved with any decision making and planning in PIA. Actually its Lower management just takes on role in gathering information for every step of proper planning.

Mission Statement:

PIA Organization has explained its mission declaration as "a symbol of national satisfaction, aspired to be an air travel of choice, operating profitably on modern commercial concepts and with the capacity of contending with the best in the International as well as Home markets" (www. piac. com. pk, seen day: 08/10/2010)

Mission assertion of PIA is mentioned in a way that:

Employee team will contribute towards making PIA a worldwide airline of preference through:

Offering quality customer services and impressive products.

Using talk about of art technologies.

Ensuring affordable methods in procurement and functions.

Developing safety ethnicities.

On Jan 15, 2010 proper objectives of PIA received in 33rd BOD reaching i. e.

Introduction of new additional flights, real time taxes income management system

Introduction and success of Pakistan remittance initiative

Increasing market show by 5 %

Successful monitoring of routes

In PIA Objective and aims are established by the bigger management for the overall organization that delivers track to middle and lower level employees in order to bring the company at an established position because Higher management cannot directly take part in improving client satisfaction so team work is necessary from ticket reservation to landing of plane. Employees work in several clubs such as office staff, ground staff, cabin team and air travel attendants as to perform daily operations and achieve overall targets and objective.

2. 2 Environmental Scanning:

Goal achievements of any company is greatly inspired by the entire environment, so in PIA before doing strategic planning higher management also scans over-all environment that involve internal and external environment both combined with the research of firm's industry.

2. 3 Strategy Formulation:

Management at the top degree of PIA utilizes everything gathered by the low management and formulate its strategies by which consists of advantages and availing its opportunities to conquer its weaknesses and risks so as to create competitive border in the airline industry.

2. 4 Strategy Implementation:

Implementation in virtually any organization entails restructuring of firm's resources and advanced of drive for lower and middle management. But in PIA strategy implementation becomes really complicated as they do not change their buildings according to their new and modified strategies, and their employees are highly demotivated as their ideas are not welcomed in formulating the strategies. Inevitably the strategies are misunderstood by them.

2. 5 Analysis and Control:

Implementation of strategies are examined and managed by PIA's higher management however they are extremely much rigid in making modifications in their overall strategies.

2. 6 Eyesight:

PIA Company has stated its eye-sight as "For being fiercely competitive, constantly exceeding customer targets and be the choice workplace that embraces modern tools in every spheres of its activities".

INFLUENCE OF VISION, MISSION, Beliefs AND GOALS OF PIA OVER It has the STAKEHOLDERS

Mission, vision, beliefs and goals for PIA have great affect over its stakeholders which involves:

3. 1 Customers:

In the eye-sight and mission assertions of PIA; their customers objectives and satisfaction is highly centered so they can be increasing their market demand by offering different services such as:

Magazines like "hamsafar" and magazines are given to all or any customers of PIA

Different flyer programs also attract customers as they can get free tickets and surplus baggage vouchers etc

PIA continuously changes its plane design after every 3 years as to gain increasingly more customer attention

PIA also presents cargo service namely "PIA Speedex".

PIA is also doing brand marketing through sponsorship to be more and more popular e. g. PIA is sponsoring Shandur polo gala, ABN Amro patron's trophy, vacation spot Pakistan 2007 festival

PIA also helps non revenue organizations like Al Shifa trust, Zindagi trust etc.

PIA is also retaining high security culture because of its customers

3. 2 Employees:

PIA believes in team work and without that they can not achieve their goals and mission however they do not enable their employees to participate in decision making process so they aren't involved in arranging goals, vision and mission for their company.

3. 3 Shareholders:

PIA does not focus on shareholders income or their satisfaction in its eye-sight and mission assertions which ultimately shows its low degree of interest. Which is proved by the fact that it's not attaining its goals so facing financial crisis that results in reduction for its shareholders as show price diminishes from 3. 17 to 2. 61 and loss was PAK Rs. 5822 million in '09 2009.

SWOT ANALYSIS

4. 1 Power:

Leading Market Position:

According to Total annual survey of PIA (2008), PIA is one of Pakistan's leading air carriers, with more than 800 daily flights. Around 150, 000 passengers fly per month on PIA, which makes it one of the major operators in the home market in terms of passenger destination.

PIA's international market talk about was 43. 5%, Within the Domestic market, its market show was 69. 4%. On a system-wide basis, PIA's market talk about was 51. 2% at the end of 12 months 2009. Its strong market position is powered by regularly low fares as well as reliable service, regular and convenient plane tickets, use of new systems like e-ticketing and self applied check-in terminals, comfortable cabins and superior customer service.

Superior Operating Composition:

PIA has maintained its position as the low cost carrier. It's been high grade Pakistani airline to use the most advanced technology. Factors' contributing involves different series of Boeing and Airbus and an efficient, high-utilization and point- to-point path structure.

Network Existence:

PIA enjoys a global strong network and international locations. The business's network includes three the major international airports in Pakistan, as well as major international airport such as Dubai International Airport. Having a solid network means that PIA can generate traffic give food to for both its local and international Flights.

Effective Use Of Technology:

PIA has effectively incorporated latest technology in all its systems, offering it an edge over opponents. PIA can take credit for bringing out most new solutions to the Pakistani market. It was the second carrier in Pakistan to incorporate the c-ticketing system and the next in South Asia to bring in self check in systems at the Jinnah International Airport, Karachi.

4. 2 WEAKNESSES:

Worse Govt. Rules:

The key procedures, strategies and group of laws are designed by the top management. The centralized system is one of the primary obstacles of long term success of PIA. PIA centralizes structure lead to barrel between different level of management, decreased motivation, and hard access to information.

Debt:

PIA has a significant amount of 42 billion debts. Current and future bad debts would have important results for stakeholders of the business.

Reliance On Petrol Prices:

PIA's sustainability, growth and revenues straight depend on olive oil prices. A steep go up in oil prices can very seriously damage the long-term viability of any air travel. Lately many airlines around the world gone bankrupt scheduled to rising petrol prices. Airlines need to hedge against this risk by firmly taking proper actions.

4. 3 OPPORTUNITIES:

Having The Maximum Road And Fleet:

PIA is having the maximum route and fleet domestic and international spots network in Pakistan as compared to its Competitors. Road and fleet expansion will favorably impact the company's procedures by increasing revenues.

Growing Demand For Low Cost Airlines:

The growing demand for flights is driven by lower fares and consumer self confidence. A study by International Aviation Authority showed that ticket price is the number one criterion for individuals when choosing a trip, well ahead of the option of a non-stop service.

Shifting Customer Needs:

The needs of air individuals are significantly changing, as they are becoming a lot more price very sensitive. If PIA succeeds to make its prices more competitive, then the company will be able to gain significant market show.

Industry Recovery:

Market analysts assume that the global air travel industry will experience an upturn in fortunes over another couple of years. This represents a chance for PIA, as it could generate increased earnings and control market show if it capitalizes on raises popular.

4. 4 THREATS

High Interest Rates:

The past couple of years have seen Express Lender of Pakistan impose high as well as low interest levels to check inflation and the overheating of Pakistani economy. Inflation in Pakistan could see another increase in the short-term.

Strong Competition By Airblue:

PIA is now competing against carriers such as Airblue and Shaheen Airline. PIA remains Airblue's most powerful competitor due to huge market it has gained as time passes, strong brand image and customer commitment.

Interest And FOREX Exchange Rates:

Fluctuating forex exchange rates can have a significant effect on PIA's earnings. For example, as PIA is providing its services to the united kingdom. Negative or results occur from exchange rate motions as change in expenditures.

PESTLE AND STEEP ANALYSIS

PESTLE and STEEP factors including political, social, economic, scientific, legal and environmental factors (Ireland R. et al 2008).

POLITICAL FACTORS:

According to Ireland R. et al (2008), politics factors always have a great effect along the way where businesses operate in the airline industry and the spending electricity of customers.

Pakistan has achieved some politics stability lately. When the management of PIA thinks that the present government will perform well (regularly), then you will see more investment by means of purchase of new airplanes and most advanced technology.

ECONOMIC FACTORS:

Currently, Airlines industry has three major players: PIA, an Airblue, Aero Asia and Shaheen Airlines. Their target market includes domestic tourists as well as Pakistanis living overseas particularly in the united kingdom and USA. Financially, the new millennium has been highly volatile; the Sept 11 disorders revolutionized depends upon. Consequently, there is a global despair in the THE UNITED STATES, South America, Australia and European countries.

SOCIAL FACTORS:

Customers are definitely more alert to market conditions and available choices and need to get best value because of their money (Johnson & Scholar, 2001). They spend time and effort and money on entertainment hence increasing the need of in-flight entertainment systems.

Hajj attracts a huge number of customers.

TECHNOLOGICAL FACTORS:

Major scientific changes are taking place in the airlines industry with improvements in the reservations and reserving systems. In-flight entertainment systems and car check in counters are two examples of such innovations. Internet plays an integral role in e-ticketing as consumer can certainly reserve tickets or check the position of the airline flight.

LEGAL FACTORS:

Airlines legislations and regulations have a primary effect on the performance of PIA. PIA has attacked new legislation that may force those to pay greater reimbursement to customers in the event of overbooking, cancellations and delays.

ENVIRONMENTAL FACTORS:

PIA, as symbolic of national satisfaction, should be considered a choice airline working profitably on modern commercial ideas, capable of competing with the best in its complete international and domestic markets, regularly exceeding customer goals. It should be a choice workplace deploying modern technology in every spheres of its activities.

APPROACHES TO Man RESOURCE MANAGEMENT TO ASSIST THE INTRODUCTION OF BUSINESS STRATEGY

With a knowledge that global financial downturn and ever growing operating costs further exacerbated by fluctuating crude olive oil prices. Corresponding to Greg J. et al (2009), individuals resource techniques should be targeted in PIA to address whether a "brighter future can be done through management procedures that fully participate employees and achieve genuine partnerships with the unions" to save an ailing airline. Inability to elicit staff commitment through individual resource tactics could mean that PIA is doomed to fail in competitive aviation industry where private sector is increasing its market show by providing to client satisfaction.

Creating a culture in which employees are close-knit and where top management targets its personnel asset by taking care and attention of them in order that they are ready to face and respond to every day's job problems will not be easy unless PIA begins building better marriage at various levels within its hierarchical group. When an organization nurtures values of friendliness and devotion among its personnel then eventually customers benefit from improved upon service quality and building a customer-centric culture becomes relatively easy. High staff morale and high quality delivery of service to customers are both inter-related and inter-dependent factors and airlines like Southwest Airlines, SWA, that based mostly its business model not only on its customers but also its employees satisfaction have observed its gains growing when others were all dropping revenues in post 9/11 period.

Human reference management team of PIA could be utilized as a valuable agent of change that creates a proper relationship among different levels of management and improves cooperation between different departments by defining policies and types of procedures that eventually results a higher level of service throughout the organization. Properly trained individuals resource pros that not only understand intricacies of organizational culture but also have understanding of global aviation industry can create a work place that stimulates dignity and value and prepares PIA for 21st century obstacles. Turnaround of Continental Airlines that used human tool management as an instrument of corporate strategy to alter its work and communication techniques throughout the organization is another exemplory case of the pivotal role that human resource office in PIA can play to boost its brand's strength and change its financial loss (Carrig 1997).

To remain competitive in global market where technology is capable of doing lots of the operations traditionally performed by human agents, PIA must take some actions to lessen its workforce through the use of technology to its gain. "Moving to online ticketing. . . save us at least 8-9 per cent in costs, " the managing director of PIA once said. This partially resolves over-employment that burdens company's dire financial condition. The next step should be online check-in for local and international plane tickets. PIA should invest further in its website to offer options to amend itinerary as and when required.

Political impact and interference that impacts fairness of recruitment regulations poses challenges for human tool management when they are compelled to make decisions that will not align with PIA's strategy but acts politics purposes. I cannot point out enough on the importance of transparent recruitment. PIA needs to learn the value of selecting as its success will depend on the power and style of its people. An organization that is at eager need of leadership and role models should beautify its headquarters wall surfaces by images of employees who conform and promote company guidelines by achieving superiority in their well known roles. This practice would encourage healthy competition within employees plus they would work with an increase of determination to get recognized.

PERFORMANCE AND Incentive MANAGEMENT INCLUDING THE ROLE OF PERFORMANCE APPRAISAL

Nowadays matching to my viewpoint any type of reward plays a essential role in staff performance either it is financial or non-financial. Financial includes increase salary benefits like medical, travel, children benefits, pension etc and non-financial are personal identification, appreciation, advertising etc. PIA must perform a employee survey in which first they identify the needs of different employees like what type of rewards PIA should provide them so that they can stimulate and perform easier to make it first choice.

Performance Appraisal or Job development talk is way the work performance of an employee is examined in term of qualitative, quantities, cost and time typically by ultra ordinate supervisor or supervisor Performance appraisal is a part of guiding and handling career development. It is the process of obtaining, analysing and saving information about the comparative worth of a worker to the organization. Performance appraisal can be an analysis of employee's recent success and failures personal advantages and weaknesses, and suitability for advertising or further training. Additionally it is the judgement of any employee's performance in the job based on concerns other than productivity alone. Its an instrument by which management can provide feed back again on employees performance identify his/her training needs. Facilitate communication between staff and supervision/management. It improve performance through counselling, training and development. Simply when ever you inform any body about his/her weakness strengths you he/she will perform better towards attaining organizational goals.

STRATEGIES FOR Staff DEVELOPMENT AND REDEVELOPMENT

The study is supposed to check the development of employees in the organization. A good development program and procedure are essential to accomplish goal of the organization. To handle poor performance and to retain staff and always keep them sustainable we've tons of strategies but what I came across in my own research that not all are play a essential role but someone plays a substantial role (Svend Hollensen, 2005).

Decentralization

Employee will better develop in decentralized decision making where they feel these are part of team once you involve worker in decision making you may easily achieve you wish objective in better way (Jeston J. & Neils J. , 2006). If we talk about PIA (Pakistan international Air travel) in PIA delegation of expert is limited credited to centralized decision making. The authorities reserve the right to make decisions in Mother board reaching or you can say that only top level management can make decision in mother board meeting. The middle and lower level management is prohibited to speak for against the top level management whatever top level make or implement they have to follow the decision

Job Rotations

According to Price A. (2005), job rotation is organic and natural part of development; it is practiced to allow licensed employees to get more insights into the processes of a company and also to reduce boredom and increase job satisfaction through job variant. More rotation more satisfies a worker. Job Rotation is not common in PIA (Pakistan International Flight) that's why PIA employees aren't fully satisfy

Feed back

Feedback takes on a vital role in development and Redevelopment of worker and retains them on the job (Mercer, 1996). People need feedback. "Most people do not see themselves as others see them". Feedback is vital to learning. If people don't totally appreciate their advantages, how can they use them to their advantages? People who take a professional attitude toward their work want opinions. If we talk about PIA quarterly staff co-ordination appointment are held where all employees can share their views with their bosses and subordinates and subordinates take responses from ultra ordinate's it can help to lessen the conflicts within the company and employee satisfaction.

Training and development Programs

Training leads towards development and when employee's skills more develop organisation can easily achieve its objectives training is vital to make worker more dynamic to perform task (Price A. 2005). Training is strategy to retain an employee in the organisation it is work of top level management to review the performance appraisals of worker and if indeed they feel lack anytime they should provide proper training to cope with that problem. This strategy is some sort of investment on worker. When employee feels that company is investing on he/she they always try to perform better.

Analysis of the Liquidity Ratio:

It is visible above graph that the PIA is operating with a negative working capital in both financial years. Similarly the percentages of current quick and cash ratio are also suprisingly low that reveals the fact that the existing asserts of the business is insufficient to meet its current liabilities. Either it should be identical or above the maiden industry level or it should be in Positive Ratio.

Leverages percentage shows the amount of debt utilized by the firm to funding its asserts (Wight R. et al, 2009). It can be either by using talk about holders collateral or by the quantity of borrowing. Leverage proportion of the PIA shows the greater amount of debt to funding its asserts.

The information of the activity ratio indicate the reduced credibility of the PIA in utilizing its property to generate the sales. As it is obvious from the fact that ratios for both years are tranquil low and the company will require a greater time frame to convert its investments to generate sales.

Analysis of Profitability Ratio:

The financial statement shows a slight drop in the gross profit margin in the 1st quarter of year 10 over the prior year. Similarly there is certainly moderate increase for the Come back on equity ratio, though it is low but as an entrepreneur it is somehow encouraging. Alternatively operating profit, online profit margin and go back on assets are in real bad condition because they are in negative.

CONCLUSION:

Reason for PIA down land is that the business is goal oriented instead of concentrating on means used to attain those goals. So the condition comes at the execution stage because they are not people oriented, mean the company does not entail its middle and lower management in decision making. That's the reason weaknesses occur plus they fail to manage their upcoming threats and unable to create competitive edge in their respective

PIA has boosted in last few years. Corporate and business level is planning frontward for next upcoming years. PIA has to changed organisational framework such that it can bring a big change and drive in employee's. This may solve all the issues and issues among the company structure from corporate level right down to the low level.

They should motivate their employees and the as less the over head cost expenditures and other expenses like labour cost. It ought to be like less input and high out put to enhance the corporate level they must heir in charge people so that they are good in decision making and strategic planning. This can be only done by good marketing insurance policies.

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