Why is PIA Losing Money Amid Air Travel Boom in Pakistan?

What is behind the domestic and international aviation boom in India and Pakistan? Why is Pakistan doing better than India in terms of international passenger growth while badly lagging in domestic air travel?

Passenger Aircraft at Karachi International Airport
What has happened to the global airline industry since the passage of the US Deregulation Act of 1978? Why did many big airlines of yesteryears die in spite of huge growth of air travel? How did so many upstart low-cost carriers succeed while state-owned airlines failed?

Why are the domestic air fares in Pakistan three times higher than those in India for similar distances? Why does state-owned PIA control two-thirds of Pakistan's domestic market? Why isn't there more competition on domestic routes in Pakistan?

Why are state-owned airlines, including PIA and Air India, losing a lot of money, requiring massive taxpayer subsidies and still performing poorly? Why aren't these airlines run more efficiently? Are PIA jobs used for political patronage? Why does PIA fly so many empty seats rather than cut fares to expand market?

Viewpoint From Overseas host Faraz Darvesh discusses these questions with Misbah Azam and Riaz Haq (www.riazhaq.com)

https://youtu.be/hh99nMnueBA




Related Links:

Haq's Musings

South Asia Investor Review

Pakistan Air Travel Market

Pakistan $20 Billion Tourism Industry Booming

Saving PIA, Railways and Education in Pakistan

Pakistan: Political Patronage Trumps Public Policy

Riaz Haq's Youtube Channel

Comments

Riaz Haq said…
Pakistan International Airlines refis Roosevelt Hotel with $105M loan
Government-owned company has long sought to sell the property

https://therealdeal.com/2018/04/19/pakistan-international-airlines-refis-roosevelt-hotel-with-105m-loan/

The Pakistan International Airlines has leased or owned the Roosevelt Hotel since 1979 and has several times since sought to get rid of it. And sans sale, the overseas owners refinanced the debt on the property, records filed with the city Thursday show, with a $105 million loan from JPMorgan Chase.

JPMorgan Chase’s refinancing replaced $140 million in previous debt on the hotel issued by Wilmington Trust, a subsidiary of M&T Bank.

PIA did not immediately respond to requests for comment and JPMorgan Chase declined to comment.

Built in 1924, the 600,000-square-foot hotel, located at 45 East 45th Street in the recently rezoned swath of Midtown East, is not landmarked and is a prime target for demolition and office tower construction, making the site worth hundreds of millions of dollars. So what’s held up a sale? Politics in Islamabad.

In December, Pakistani Prime Minister Shahid Khaqan Abbasi rejected a selloff plan for the Roosevelt, according to the Express Tribune, an English-language paper in the country. PIA, a government controlled company, had come up with the plan as part of a larger strategy for paying off roughly $5.3 billion in debt.

“Apart from being a valuable property, the hotel also carries cultural significance for Pakistan,” Abbasi said in rejecting the PIA plan.

PIA last put the hotel on the market in 2007, asking $1 billion. In August, The Real Deal reported that an investment group led by hotelier Shahal Khan was interested in acquiring the hotel. Khan is also making a bid for the Plaza Hotel on Fifth Avenue.

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