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1 Primary Data:
Personal observation Practical work 1.4.2 Sec

Annual Reports 2009,2010&2011 Newspapers. Finance Manuals. Internet



1.1 Birth of a Nation, Birth of an Airline
Air transport has probably never been more important to the development of a new nation than in the case of Pakistan. In June 1946, when Pakistan was still in the offing, Mr. Mohammad Ali Jinnah, the Founder of the upcoming nation, instructed Mr. M.A. Ispahani, a leading industrialist, to set up a national airline, on a priority basis. With his singular vision and foresight, Mr. Jinnah realized that with the formation of the two wings of Pakistan, separated by 1100 miles, a swift and efficient mode of transport was imperative

1.2 Orient Airways Takes to the Skies

On 23rd October 1946, a new airline was born. Initially registered as a pilot project in Calcutta, Orient Airways Ltd. had at its helm Mr. M.A. Ispahani as Chairman and Air Vice Marshal O.K. Carter as General Manager. The new carrier's base remained in Calcutta and an operating license was obtained in May 1947.Four Douglas DC-3s were purchased from Tempo of Texas in February 1947 and operations commenced on 4th June 1947. The designated route for Orient Airways was Calcutta-AkyabRangoon, which also happened to be the first post-war international sector to be flown by an airline registered in India. Within two months of Orient Airways' operational beginnings, Pakistan was born. The birth of a new nation generated one of the largest transfers of population in the history of mankind. Orient Airways, along with the help of BOAC aircraft which had been chartered by the Government of Pakistan, started relief operations and transportation of people between Delhi and Karachi, the two capitals. Subsequently, Orient Airways transferred its base to Pakistan and established a

vital link between Karachi and Dacca, the two capitals of the two wings of Pakistan. With a skeleton fleet of just two DC-3s, three crew members, and twelve mechanics, Orient Airways launched its scheduled operations. The initial routes were Karachi-Lahore-Peshawar, Karachi-Quetta-Lahore and Karachi-Delhi Calcutta-Dacca. By the end of 1949, Orient Airways had acquired 10 DC-3s and 3 Convair 240s which were operated on these routes. In 1950, it had become increasingly apparent that additional capacity would have to be inducted to cater to the growing needs of the sub-continent.

1.3 A New National Flag Carrier for Pakistan

Orient Airways was a privately owned company, with limited capital and resources. It could not be expected to grow and expand independently. It was then that the Government of Pakistan decided to form a state-owned airline and invited Orient Airways to merge with it. The outcome of the merger was the birth of a new airline, named Pakistan International Airlines (PIA) on 11 March, 1955. In addition to transport activities, Orient Airways had established the nucleus of overhaul and maintenance facilities and acquired trained pilots, engineers and technicians, these measures proved to be a great asset for PIA during its teething phase.

1.4 PIAs First International Service

The year 1955 also marked the inauguration of the fledgling airline's first scheduled international service - to the glittering, glitzy capital city of London, via Cairo and Rome. Initially, there was

much criticism, as the public could not comprehend or justify the need to operate an international route when, in their opinion, other projects vital for a developing country should have been given a higher priority. However, PIA's focus was, and continues to be, to serve the Pakistani community at large. The provision of transportation to expatriates has remained one of the foremost priorities of the national airline. Moreover, PIA earned substantial foreign exchange through international services, which it invested in the purchase of aircraft and spare parts, as fleet expansion was a grave necessity for the airline

1.5 New Planes, New Directions, New Management

In 1956, orders were placed for two Super Constellations and five Viscounts which were to be delivered in 1959. At this juncture, PIA possessed a small fleet which comprised of Convairs, Viscounts, Super Constellations and DC3s. While Mr. M.A. Ispahani was the first Chairman of the new dynamic airline; it was the first Managing Director of PIA, Mr. Zafar-ul-Ahsan, who in his 4 year tenure, got the ball truly rolling and set the shape of things to come. The PIA Head Office building at Karachi Airport, which houses all the major departments of the airline, was the brain-child of Mr. Zafar-ul- Ahsan. In fact, on his departure from the airline, the employees presented him with a silver replica of the building with the caption, "The House You Built". In 1959, the Government of Pakistan appointed Air Commodore Nur Khan as the Managing Director of PIA. With his visionary leadership, PIA 'took off' and within a short span of 6 years, gained the stature and status of one of the world's frontline carriers. In aviation circles, this period has often been referred to as the "golden years of PIA".

Development, expansion, and growth were keywords that the new management was committed to. In March 1960, PIA launched its first Boeing 707 jet service on the London-Karachi-Dacca, route which later proved to be very successful. This trail-blazing accomplishment resulted in PIA becoming the first Asian Airline to operate a jet aircraft, setting trends for the future. In 1961, the airline took on the mammoth task of initiating a cross-Atlantic service from Karachi to New York. By this time, PIA had placed orders for more new aircraft, which included Fokker F-27s, Boeing 720Bs and Sikorsky helicopters. Helicopter services in East Pakistan had gained momentum by 1962 and expanded to include Sylhet, Chittagong, Dacca, Comilla and Ishurdi. PIA's helicopter services carried over 70,000 passengers during the first year of operation. At the time, it was regarded as a stellar operation, equal to any other in the world. Unfortunately, due to two mishaps, the service was discontinued in 1966.

1.6 Historic Firsts and Unbroken Records

In 1962, finding the upper winds forecast favorable, PIA set out to break the record for the fastest flight between London and Karachi. With representatives of FAI (Federation Aeronautique International) on board to monitor the official timings, PIA completed the flight in 6 hours, 43 minutes, 51 seconds, a record which remains unbroken to this day. In 1964, PIA achieved another historic first, regarded as a major milestones in the chequered history of the airline. On 29th April, 1964, with a Boeing 720B, PIA earned the distinction of becoming the first airline from a non-communist country to fly into the Peoples Republic of China. PIA's first service to China was from Karachi to Shanghai via Canton. In 1964-65, PIA expanded its fleet further with the addition of a fourth Boeing 720B and two Fokker F-27s. Serious development had become a reality and the PIA team continued to move ahead with ambitious plans and goals for the national flag carrier.

A collective pride and a joyous buoyancy was pervasive within the PIA family. Riding high on the crest of success, PIA became a household name in Pakistan in the mid sixties. The war between India and Pakistan, during 1965, further tested the national airline. PIA played a major role in providing logistical support to the Armed Forces by operating special flights using Boeings, Super Constellations, and Viscounts. The Founder of the Nation, Mr. Jinnah had predicted that the Pakistan Air force would need the support of a civil airline in special circumstances, and this came into evidence during the war. In 1966, a system of feeder services linking eight new points in West Pakistan was introduced. By this time, the airline's Viscounts were proving inadequate owing to traffic growth, and had to be replaced by Tridents. The airline continued up the growth curve, receiving two Fokker F-27s, two Boeing 707s and one Trident in the following year

1.7 Style, Glamour, and Charisma

Around this time, the airline saw a change in the top slot. Air Vice Marshal, Asghar Khan took over the reigns of PIA for a tenure of 3 years. A number of highpoints are attributed to this period. The most colorful, if not the most significant, occurrence for PIA was the introduction of a new air-hostesses' uniform designed by none other than the renowned French designer, Pierre Cardin. Taking the aviation world by storm, this move, more than any other single factor, imprinted PIA's name on the international market. The uniforms were an instant hit, both at home and abroad.


The Pursuit of Excellence Through Technology and Quality Control

Not content with a number of historic firsts under its belt, PIA made history yet again, by installing Pakistan's first computer, an IBM1401, in 1967. PIA's first Engine Overhaul Shop, located near the Head Office building, was also completed and commissioned around this time. The Ground Training School (GTS) now known as the PIA Training Centre, was first conceived and developed during 1961-62. Interestingly, training was initially imparted in the T-shaped building which has now become the PIA Dispensary, close to the Head Office building. Besides visible development and growth in traffic and revenues in the sixties, PIA added additional destinations, new equipment, and cutting-edge technology to support its ever expanding operations. A new Jet Hangar for Boeings with a supporting airframe overhaul shop was completed and commissioned in 1968. In 1970, PIA set up its own Flight Kitchen in Karachi, which caters, even today, to the national airline as well as other carriers. Over the years, with the airline's expansion and increased capacity, the need for a second Flight Kitchen became imperative.

1.9 Ushering In a New Era of Growth and Development

PIA heralded the nineties by donning a bright new corporate identity. Old-timers may remember the flutter that the earlier green and gold livery had created when it was first introduced in 1974. However, in keeping with the changing times, PIA introduced a smart, sporty 90's look. The familiar PIA green was reinforced with moss green and pale blue stripes

were incorporated into the new corporate identity. The stripes, a universal symbol of sport, highlighted PIA's active participation and sponsorship of a diverse range of national games. PIA's players have always been at the forefront of Pakistani Cricket, Hockey, Squash, Football, Chess, Bridge, Polo and Table-Tennis teams. The nineties also saw the expansion of PIA's massive Haj and Umrah operations to Pakistan's smaller cities, in addition to the major cities of Islamabad, Peshawar, Lahore, Quetta and Karachi. PIA's growth continues unabated and the airline now operates globally, covering the entire domestic landscape and international destinations spread over 4 continents. Impressive statistics for a comparatively young airline. Since its inception in 1955, PIA has indeed, come a long way.



First airline from an Asian country to fly the Super Constellation. First Asian airline to operate a jet aircraft. First Asian airline to be granted maintenance approval by the US Federal Aviation Administration (FAA) and the Air Registration Board, predecessor of the British Civil Aviation Authority (CAA).

First non-communist airline to fly to the People's Republic of China, and operate a service between Asia and Europe via Moscow. First airline in Asia to induct the new technology Boeing 737-300 aircraft. First airline in the world to operate scheduled helicopter services. First airline to show in-flight movies on international routes. The first airline in South Asia to introduce auto-ticketing facility. The first airline in the world to fly to Tashkent, capital of the newly independent state of Uzbekistan. First airline in the world to start Air Safari with jet aircraft. First Asian airline to start flights to Oslo, the capital city of Norway. First airline in the world to induct the Boeing 777-200LR, the world's longest range commercial airliner. First airline in the world to take delivery of the Boeing 777-200LR Worldliner (Longer Range Variant). Pakistan International Airlines Flight Services Department was awarded the ISO 9001:2000 certification award during May 2006. First airline in Pakistan to operate a flight with an all female crew at command and in the cabin. First airline in the world to operate the Boeing 777-200ER, 777-200LR and 777-300ER altogether - all the three variants available on the market. PIA Flight Kitchens in Karachi were awarded the HACCP Certificate. (Hazard Analysis and Critical Conrol Points)


Type Passenger Total (Business/Economy Plus*/Economy) 184 (12/40/132) 205 (18/43/144) (18/45/142) 48 (0/8/40) Routes Notes

Airbus A310300


long, medium and short haul (Europe, Far East, Gulf, Subcontinent and Domestic routs)

6 leased from Airbus industriee

ATR 427 500

short haul Domestic, Afghanistan and Gulf medium and short haul Afghanistan, Gulf, Indian and Domestic Cities

Boeing 6 737-300

118 (0/24/94) 119 (0/27/92)

Boeing 747-200 1 Combi

298 (38/30/196)

medium and short haul Far East, and Domestic Destinations medium and short haul Saudi Arabia and Domestic 1 of which is stored

Boeing 5 747-300

433 (45/60/328) 320 (35/45/240) 329 (35/54/240)

Boeing 777200ER

long, medium and short haul 1 of which (Europe, Saudi Arabia USA and is leased from Domestic ILFC


Boeing 777200LR

310 (35/60/215)

long, medium, short and ultralong haul (North America, Europe, Saudi Arabia and Domestic) long, medium and short haul (Europe , North America, and Domestic ) Updated February 2009

Boeing 777300ER

393 (35/54/304)



2.4.1 Vision
PIA's vision is to be a world class airline exceeding customer expectations through dedicated employees, committed to excellence.

2.4.2 Mission
Employee teams will contribute towards making PIA a global airline of choice: Offering quality customer services and innovative products Participating in global alliances Using state-of-the-art technologies Ensuring cost-effective measures in procurement and operations


2.5. Values
Customer Expectations
Convenience, Caring, and Competitive Tariff

Personalized and Courteous

Cherishing New Ideas, Translated Into Action

Respect for Individuals, Teamwork, and Effective Communication

Business Ethics, Accountability, and Transparency

Loyalty and Consistency

Passengers, Employees, Environment, and Health




SA to Chairman

Secretary PIAC

Managing Director

Director Precision Engineering

Chief Operating Officer

Director Coordination/ SA to MD

Director Airport Services


Director Flight Operations

Director Network & Route Director Flight Services

Director Finance


Director Cargo Sale & Service

Director Marketing

Director Engineering 14



Admin Officer


Ticket Officer Manager

Passenger Sales Manager

Public Relation Manager

Manager Tours Promotion

Cargo Sales Finance Manager Manager




Managing Director Air Chief Marshal (Retd) Rao Qamar Suleman Deputy Managing Director Mr. M. Salim Sayani Deputy Managing Director Special Projects & Charters Capt. M. Junaid Younus Chief Financial Officer Mr. Nayyar Hayat Director - Corporate Planning Mr. Irshad Ghani Acting Director - Human Resource, Administration & Coordination Capt. Saleem Ahmed Director - Engineering and Maintenance Mr. Maqsood Ahmed Director - Flight Operations Capt. Naveed Ahmed Aziz Director - Airport Services Mr. Mahmood Ahmad Director - Flight Services Capt. Muzzafar Talpur Director - Information Technology Mr. Sher Muhammad Jamali Director - Marketing Mr. Khurram Mushtaq Director - Precision Engineering Complex AVM Amin Ullah Khan Director - Procurement & Logistics Mr. Amanuullah Qureshi Director - Standards & Special Projects Mr. S. Aijaz Mazhar




Ch. Ahmed Mukhtar

Minister for Defence and Chairman - PIA Malik Nazir Ahmed Mr Javed Akhtar Syed Omar Sharif Bokhari Mr Husain Lawai Makhdum Syed Ahmad Mahmud Mr. Abdul Wajid Rana Federal Secretary Finance Khawaja Jalaluddin Roomi Mrs Nargis Sethi Federal Secretary Defence Mr Air Chief Marshal (Retd) Rao Qamar Suleman Managing Director-PIA Mr Muhammad Shuaib Secretary-PIA




Islamabad - Rawalpindi (Benazir Bhutto International Airport) Hub

Northern Areas
o o Gilgit Skardu

North West Frontier Province (NWFP)

o o o

o o o o

Chitral Dera Ismail Khan Peshawar (Peshawar International Airport) Focus City Bahawalpur Dera Ghazi Khan Faisalabad

Hyderabad Karachi (Jinnah International Airport) Hub Moenjodaro Sukkur

o o o o o o o

Lahore Hub
Multan Rahim Yar Khan Sialkot

Balochistan o Dalbandin o Gwadar o Panjgur o Quetta o Turbat






Malaysia o Kuala Lumpur Thailand


o Toronto United States o New York City (JFK)


Southwest Asia


Bahrain o Manama Kuwait o Kuwait City Oman o Muscat Qatar o Doha Dammam o Jeddah o Riyadh United Arab Emirates o Abu Dhabi o Dubai o Sharjah

Denmark o Copenhagen France o Paris Ireland o Dublin [plan to start Summer 2009/pending approval] Italy o Milan Netherlands o Amsterdam Norway o Oslo Russia o Moscow (Sheremetyevo Airport) Spain o Barcelona Turkey o Istanbul United Kingdom o Birmingham o Glasgow o Leeds/Bradford o London (Heathrow & Stansted Airport)




PIAC Airline has been divided into the following function units. Network & Route Planning Administration Finance Marketing Engineering Flight Operations Airport Services Cargo Sales & Services Precision Engineering Complex Flight Services Coordination


Network & Route Planning Department

This department carries out formulation and implementation of overall corporate plans. This department provides guidelines to each division/department to fix their goals and formulate strategies to achieve them. It has the following subdivisions: International and Civil Aviation Affairs Division


Economic Planning Division Fleet Planning Division


Administration Department
Administration department is one of the pivotal departments, which is responsible for the administration of human resources and formulation of the corporate personnel policies; it has coordinating and regulatory body, which regulates relationship subdivision is as under: Human Resource Division Personnel Division PIA Training Center Policies and Remuneration Division Security Services Division Medical Services Division Industrial Relations Division Legal Services Division Sports Division between management and employees. Further


Finance Department
Finance department is one of the biggest departments in the airline, which is responsible for provision of efficient and effective accounting/budget. The feasibility of extending financial, administrative, technical facilities is control by this department. It is also responsible for internal auditor of PIAC. It has further divisions, which are as under: Planning and Budget

Funds Management Accounting Internal Audit


Marketing Department
It looks after development of Marketing Plans & Policies. This department performs all marketing functions. Subdivision is given below: North (KHE) Division South (KHI) Division UK (LON) Division USA & Canada (NYC) Europe (FRA) Division Saudi Arabia (JED) Division Asia Pacific (SIN) Cargo Sales Division Market Planning & Services Division Gulf (DXB) Division Passenger Sales Division
Reservation & Yield Management Division


Engineering Department
This department takes care of planning, base/line maintenance and overhauling of whole of the PIAs fleet. To keep pace with the new technology, it has a special branch named as Development Engineering to


meet the future challenges in the sphere of avionics. Following are its further subdivisions: Planning and Project Division Quality Assurance Division Avionics and overhaul Division Base Maintenance Division Line Maintenance Division Development Engineering Division Power Plant Division Resource Management Division North Division


Flight Operations Department

This department coordinates the training, flight engineering, planning and scheduling of flight operations. It is responsible for all the activities of the flight operation in PIA and ensured central control over all flights. The department has been organized on the following line: Flight Engineering Division Standards Division Central Control Division Planning & Scheduling Division Technical Division Coordination Division


Training Division
North Division


Airport Services Department

Customer Services Department has two subdivisions, which are given blow:

4.7.1 Passenger Services Division

As the name implies, this division is responsible to provide services to the passengers as well as aircraft at the airport. This subdivision in addition to the Passenger Services also possesses Facilitation & Planning, Technical Ground Support (TGS) and Terminal Services (KCI).
4.7.2 Flight Services Division

This subdivision provides for provisioning of all in-flight services like food, cabin crew and field services.


Coordination Department
The purpose of Coordination Department, which is headed by Director Coordination, is to coordinate all matters received through Government of Pakistan. Co-ordination playing very important role in airlines so PIAC as has well established co-ordination department so it may run its business affairs swiftly. Which brings more productivity and positive working relations with the Government departments.




The duties and functions of a typical finance department can be classified into two generic categories. The first category is PLANNING and the second function is CONTROLLING. These activities are inter-related and inseparable because if there is no planning these will not be any control. Therefore, planning and control move together. Planning refers to the activities, which bridge the gap from the starting point to the terminal point. Planning in the finance department under review refers to the activities of Cash Flow and Budget preparation. These are the major activities (planning) in any such department.



5.1.1 Planning
Planning is fundamental to the management process, a process of sensitizing an organization to external opportunities and threats, of determining desirable and possible objectives, and of deploying resources to match the objectives. Without planning there is no basis for controlling for planning provides the foundation upon which the control function operates. The planner should be able to visualize the proposed pattern of activities individually and collectively, internally and externally.

5.1.2 Budgets

The budget is not only the most important plan of an enterprise, but also the basic link of accounting with management. The use of budgets, particularly in connection with the control phase of management has been termed as budgetary control. A companys organization chart and its chart of accounts from the basic framework on which to build a coordinated and efficient system of managerial planning and budgetary control. The organization chart defines the functional responsibilities for the budgets rests with executive management, all managers are, responsible for the preparation and execution of their departmental budgets. If a budgetary control system is to be successful, these managers must fully cooperate and must understand their role in making the budget system successful.

5.1.3 Controlling
This function of the finance department is carried out in the light of standards set in the planning stage. The actual performance is compared with the preplanned objectives and standards, which lead to the rectification of any deviation and improvement suggestions, which will assist in the future planning. Management control is the systematic effort by the business management to compare performance to plans the control function is of prime importance in the accomplishment of objectives. The need for control increases with the size and complexity of the organization. Continuous supervision of an activity, task, or job is required to keep it within previously defined boundaries. These boundaries termed and budgets in the planning phase, are set up for manufacturing, marketing, finance and all other activities. Actual results are measure against plans; and if significant differences are noted, remedial actions are taken.


Department of Finance
Out of the nine divisions in the department Revenue Division is the most important division. Some of the important divisions/sections are described below in detail.

5.2.1 Revenue Division


Airline sells space and services and these are measured in terms of money. Revenue division controls the revenue in terms of money. It is further subdivided into these sections: a) Passenger Revenue b) Cargo Revenue c) Interline Revenue d) Pricing For each type of the revenue stream there is an independent unit. So Revenue Division is discussed in units:

A. Passenger Revenue:
i. Sales: Revenue function starts from printing of tickets. Thickets of airline contains few coupons with a jacket (bearing instruction on it) tickets are sold at station and at agents offices. Sales of tickets may be: (a) Direct Sale or (b) Indirect Sale Direct sales mean sale at stations of PIAC, whereas indirect sales are by agents. a) Direct Sale There are many locations for direct sales all over network of PIA. Three types of ticketing are practiced i.e. manual ticketing and auto ticketing and ETicket. Manual ticketing involves procedures of pencil paper work on printed tickets. Whereas auto ticketing involves advance system of computerized ticketing and on the spot computerized ticket printing. Regarding direct sales following four documents are important: i. Passenger Revenue/Extra Baggage Carrier Ticket: The ticket has four/three coupons. First is audit coupon, second is issue office coupon, third flight/lift coupon and fourth the revenue coupon. Flight coupons are arranged for one/two or four sectors. Audit coupon and flight

coupons are most important coupons. Because flight coupon is the only coupon to be used either for lift, or for refund/reissue/travel on non-PK carrier, etc. whereas as audit coupon is meant for PIAs revenue record. Audit coupons are sent to head office with sales statements from each station. Accounting to entry is based on audit coupon. ii. Miscellaneous charges order (MCO): These documents contain, audit issue office and exchange coupons, these are meant for exchange if for the time being you dont want to travel but want to block a seat. Or if you were charged higher fare than the class you traveled in. iii. Prepaid Ticket Advice (PTA): This is for sponsoring the tickets or the relative, friends, etc. for any other country/destination the money paid by the person sponsoring the ticket in advance and after the checking of the documents of the nominee of the sponsored, sponsoree is issued this ticket. The responsible station communicates through telexes.

5.2.2 Agency Sales:

There are three types of agents selling tickets of PIA. IATA approved agents, General Sales Agents (GSAs) and Non-IATA Agents. Agents are paid commission on domestic 5% and on international 9% and sometimes paid 3% above the normal rates. Agents as well as stations are required to submit the sales statements. These may be daily/weekly/monthly as the case may be.

5.2.3 Refund Unit:

Persons who do not report 72 hours before the flight the seat are automatically canceled. In case of international tickets the unused tickets are fully refunded. Jacket covering the coupons of the ticket bears instructions and procedure of cancellation charges with specified rates.


PIA policy that it facilitate its customer if the flight is cancelled due to any reason than PIA will not charge any amount to the customer and the refund amount will be fully paid. I have observed that at my work in PIAC Islamabad /Rawalpindi station most of the refund cases were of domestic flight for Gilgit and Skardu.

5.2.4 Accounting Unit:

Disk/information received from all stations sometimes enables this unit to monitor accounting and prepare floppies and transmit them to the main frame. In PIAC accounting is fully automated and computerized. Few stations have on line systems too however manual work is not totally eliminated due to non-availability of the on line systems at some stations.

B. Cargo Revenue Section

Before going into details it will to look at the organizational set up to this section.

Manager Cargo Revenue

Assistant Manager Sale Unit

Assistant Manager Lift Unit

Accounts Officer R-2

Accounts Officer R-3

Accounts Officer R-11

Accounts Officer Mail Rev.

Accounts Officer MISCE. 30

In the hierarchy above R-2 stands for revenue generated by PIAs own counters where there is no commission on sales, R-3 is concerned with FOB payment by consignee, in which commission factor is involved. R-11 stands for a document regarding the agents sales revenue and remittance report. Whereas miscellaneous includes refunds, handling charges, etc.

5.2.5 Sales Unit:

Sales may be of two types; sales on PIAs own counters and sales by agents. When cargo sales are made airway bills are prepared by stations/agencies. Stations are responsible for reports to head office about airway bills, both of agents and stations. Agents reports to stations and stations to H.O. Cargo sales may be domestic or international. R-2 is statement regarding domestic cargo sales and international cargo sales for PIA counters whereas R-11 is a statement for agents cargo sales. R-3 is collection report. Rs are returns prepared by the stations and sent to lift unit. Lift unit keeps the tracks of the cargo sales revenue and monitors the preparation and collection made by stations.

International Revenue Section:

All airlines render services and these are measured in terms of money. Revenue division is responsible to keep the tracks off all the revenue. Interline revenue has two aspects:
i. ii. Receivable: Payable:

When passenger from any other purchases ticket airline but lifted by PIA. Some other carrier but lifts passengers purchases when ticket from PIA. These transactions are settled through IATA clearance house. IATA clearance house has its member airlines are dealt according to the standing agreements with them. As IATA regulates the airline industry in the world most of the


settlements are through IATA. Sometimes revenue is divided according to sectors carried. These types of the settlement are made on the basis of mileage. This is called probation. For settlement there are three currencies in which payments are receipts are made. European Currency US Dollar Pound Sterling

This section of the revenue division was established in 1975. It acts as regulating authority of the airline. According to IATA rules approved fare written on the face of the tickets should be charged as that fare is approved. But the airlines undercut their fare especially in other than the base country. This section monitors these underground unethical violations of the IATA rules.
When other airlines undercut fares and PIA feels that it must also undercut, the station managers prepares proposals about fare expected to be charged and sends these proposals to marketing department. Marketing Department analysis the proposals and approve them after comparing with last years figures. Final approval is made by director sales



Counter Pax Sale: In R1 Counter Pax Sale is reported. Counter Pax

Sale means direct passenger traveling sale from the station counter. There is three type of Counter Pax Sale. International Pax Sale Domestic Pax Sale National Assembly Pax Sale

Report No 2 (R2) Counter Cargo Sale: In R2 the Counter Cargo Sale is reported. Cargo Sale means directs cargo sale from the station counter. There is three type of cargo sale. International Cargo Sale Domestic Cargo Sale Air Express Sale Report No 3 (R3) Other Station Cargo Sale: In R3 Cargo Sale is reported. That type of Cargo Sale, which is booked at one station without payment. When it is received at the destination station then payment is made at the destination station. When that payment is received in that station from where the parcel is booked then it is reported in R3. Report No 4 (R4) Miscellaneous Receipts: In R4 miscellaneous receipts are reported. Different types of revenue, which are not treated in other reports, have been treated in it. For Example Rent, Fare, Extra advance and re-back reservation system charge, and Computer Charges. Report No 5 (R5) Credit for Embassy & Customers: PIA offers credit to different organizations, Embassy and Customers. When sale is made on credit and when this credit amount is recovered then it is reported in R5. Report No 6 (R6) Refund: When the customers who purchase the travel ticket and can not use the ticket and want to refund it. Then these tickets which are refunded are reported in R6.


Report No 7 (R7) Due Payments: When any Payment is due on the client and he made the payment in other station. When it is received in the origin station then it is reported in R7. Report No 8 (R8) Sales on Credit: PIA offers credit to different organizations, Embassy and Customers. When sale is made on credit then credit sale is reported in R8. There is a programmed in the computer that when the credit amount is received and reported in the R5 then automatically it is washed from R8. Report No 9 (R9) Programmed Reports Transferred into R-9, from R-1, R-2: R-9 is consolidated statement of all receipt. There is a program in the computer that when the cash is reported in the other reports like R1, R2 etc. automatically this cash is transferred into R9. R9 is used for the reconciliation purpose. That all cash collection is reported in this report then reconcile with the Passbook. Report No 10 (R10) Agents Reports: PIA authorizes some agents to issue the tickets. When the agents sale reports have been received then it is reported in R10. R10 consist of two type of sale. International Pax Sale Domestic Pax Sale There are three types of agents, which deal in passenger ticket these are known as Pax Agents. i. DSAs : Domestic Sale Agents Such agents sales only domestic tickets. They are allowed 5% commission. ii. IATA Agents Such agents are registered agents. They sell tickets of each airline. They deal

both in domestic and international tickets. They are allowed 9% commission on international sale and 5% commission on domestic sale. iii. GSA: General Sales Agents Such agents sell only PIA tickets. They are allowed to sell domestic as well as international tickets. They are allowed 9% commission on international sale. Report No 11 (R11) Cargo Sales from Agents: PIA authorizes some agents for cargo sale. When the agent cargo report is received then it is reported in R11. R11 consist of two types of sale. International Cargo Sale Domestic Cargo Sale


As PIA main business is selling of Air Ticket. PIA has a very modern and fast working system of ticketing. All the Reservation and Ticket system is computerized. All the cash sale is deposited in the bank on daily basis. There are different types of sales: 1. Cash Sales 2. Credit Card Sales 3. Sales to Defence Personal against voucher 4. Incentive Ticket to different Client and Agents 5. Staff Rebate Tickets.

5.4.1 Cash Sale

Cash sale are banked on daily basis and bank slips along with sale reports of the same day are sent to the revenue section where staff working made on initial audit of the report and the deposited into the bank. That amount is accounted for in a source named R-1. This accounting circle revolves till the monthly closing course.


5.4.2 Credit Card Sale All the credit card sales are sent to Revenue Section on daily basis and there are sorted and listing is made for billing to the concerned bank. When Cheque of credit sale is received it is deposited into bank and banks credit it to the PIA Account. 5.4.3 Sale to Defense Personals As per Government of Pakistan Rules Army men has to pay 50% Fare Remaining 50% will be recorded from the army through a lengthy billing procedure. All the daily sales to Army personal are received in revenue section and the handed over to an other section dealing all the credit sales named Credit Control Section. Army men Travelling on official duty travel against an APW is issued by their authority. APW mean Air Passage Warrant. These APW are also deal by credit control section. 5.4.4 Incentive Tickets to Different Clients When an agent makes a satisfactory sale. He also claims it for a rebated air ticket. Some passengers are VIPs and regular travellers or from commercial points of view PIA management feels they are valuable such persons are awarded with incentive tickets. Such tickets are accounted for by the H.O. 5.4.5 Staff Rebated Tickets


Like all other organization PIA employees are awarded Free/Rebated Air Tickets. All above sales are received in the revenue section along with their support there they are sorted out and accounted for al their merit after all job is completed all the supporting paper are found correct and properly attached. These reports are sent to H.O. for an other audit by the staff working in H.O. All the sales A/C are re- conciled on daily basis. Reconciliation of DOM R-I with respect to TAC, APW, AMEX, Visa etc. Reconciliation of INT R-I with respect to AMEX, Visa, Exchange tickets/Other Airline Tickets, extension of validity & DADS tickets. Checking of DOM Documents Checking of INT Documents Collection of all sales proceeds at the counter Feeding Deposit Slips of R-I (DOM) R-I (INT) Reconciliation of Collection Account. Preparation of INT R-I (through COSSAP III). Preparation of DOM R-I (Manually) Realization of Credit Card Sale and its reconciliation.
All other duties, which can be assigned when, required.

5.5 DOCUMENTS CONTROL SECTION As PIA function is to sell Air Ticket and carry cargo from one place to another. So it main document or important paper is Ticket and Airway bills. As there are so many tickets are used on daily basis by PIA itself and by the agents. So it is very important to control all the ticket. So a separate section named Document Control Section is working for this purpose. All PIA

tickets are printed in U.S.A and Singapore from there they are received by the H.O. Then H.O. sent these tickets to station according to their requirement. Where they are kept in strong room and issue to after proper recording and inventory is maintain.

SERIAL CONTROL SECTION The duty of this section is to control the Serial of All Revenue

Documents/Tickets. All tickets are used in sequence. The main functions of this section are to check and control and to avoid any misuse or any break in sequence. 5.6 AGENCY SALES UNIT Most of the PIA tickets are sold by Agents. The function of this section is to check the agents and coordinate with the solving different type of problem. Ticket sold by agents are reported in a sales report and submitted to this section fortnightly along with a Cheque of same amount reported in sales report after deducting 9% commission allowed to agent. The object of this section is to check the sales report of each agent, whether all tickets are reported which are sold whether correct amount is reported in the sales report. Fair calculation is a very technical job. Checking of fare calculation is main object of their section. After checking all the sales reports received from agents are feeded in computer and whole the data is transferred to Head Office. Whole the sale amount against the passenger sales are reported in R-10 and whole the sales amount received against the cargo sale are reported in R11. Sales proceed are received from agents on fortnightly basis. I work which I performed in agency sales unit were as follows. Preparation of R-10 ASR-10, REF-10 and maintain its record. Revenue Documents Control Agency Sale Coordination with Agents regarding all financial matters

Deposit of sale proceeds received from Agents Issuance of Cash Receipts against sale proceeds of Agents. Feeding of Deposit Slips, which relate to R-10 5.7 REFUND SECTION As PIA business is sales of tickets. All unutilized tickets are returned to PIA and refund is claimed. To deal with such ticket a refund section is working in PIA Finance. The unused ticket is presented in refund section. After proper scrutiny of the ticket a pay voucher is prepared along with a cheque. This pay voucher and cheque duly approved and signed by the authorized officer. All the payment process is computerized and whole accounting is automatically done by computer user has to only enter the specified A/C code allocated by PIA for each type of payment. Because payment are of different types and nature. used to proper accounting as per PIA set rules. I was instructed to take care of these points when preparing a refund check in GOSSAP. Refund can be for given for ticket which should not have passed 1 year Passenger should bring a PRT.

So many accounting codes are

Miscellaneous charges order were also entertained by providing a copy of MCO as if some is charged higher fare.

Army Personal were given rebate when refund their ticket it should also be recorded in O/A 21035 and Remarks in TAC. 278835 At all cancellation minimum deduction should be Rs. 300 No show charges should be feeded in CNC. At credit card ticket purchase, at the time of refund 1.68 % should be deducted.




Monthly expenditure report is called D-15 which consists of Pay Vouchers with relevant supports, Payment Book listing all the Disbursements made at Station during a specific month, Disbursement Accounting Summary, Staff Payment Register, Budget Control Register, Bank Imprest Reconciliation and Bank Statements.


Pay voucher is a basic document of Disbursement System. Is should be prepared against approval competent authority and must be supported with all necessary documents i.e. bills, invoices, cash memos, receipts, approvals and authorities, etc. Before preparing a Pay Voucher, all applicable rules, Admin Orders, Circulars & Directives issued from time to time should be strictly followed. Each invoice/bill/cash memo/cash receipt/statement/claim form must be certified by the concerned officer and approved by the Station Head. Overwriting is highly objectionable from Audit point of view. In case involving corrections, wrong figures should be circled in red ink and correct figures written and duly signed by the claimant and approving authority before preparation of pay voucher. In case of invoices/supports printed in Foreign Languages, brief English translation should be written on the document.


Each pay voucher must contain signatures of the official preparing payment voucher as well as the approving authority along with their staff numbers. Recipients signatures must be obtained on Pay Voucher. If Cheque is dispatched, a dispatch stamp must be affixed. In such cases official receipt of the beneficiary should also be attached with necessary identification along with other supports. In case of collection through third party, authority letter and proof of identity must be obtained. All supports should be photo copied and retained with copy of pay vouchers for reference and reply of queries. Original supports, except TA form, must be sent to Head Office for checking and record purpose. Payees copy of TA form along with copies of ticket jacket hotel bill and airport tax, receipt etc. should be attached with P.V. No payment should be made on photocopies of invoices/receipts etc. This is the most important safeguard against duplicate payments and frauds preventions. I was instructed to take special care of these points when making a computerized cheques in GOSSAP. disbursement section.
Preparation of D-15 Preparation of R-6 Making Cheques for refunds Dealing lost ticket cases Dispatch of D-15, R-6 along with attachment

And I performed certain tasks in

All other duties, which can be assigned when, required




My experience and Observation at PIA Rawalpindi
My internship was in Finance section but I got the opportunity at PIA Rawalpindi to understand Human Resource Management department and got good information at the station and for that I am very much thankful to Mr. S.A Mujtaba H. Naqvi Human Resource Manager Rawalpindi/ Islamabad. He gave me good information and guided me about the organizations structure and administrative setup. It was indeed a very good experience to get HR management information. Other than finance department it helped me a lot to understand organizational setup and how to work in a corporation. I have included that chapter in my internship report as it gives a more clear picture of Pakistan International Airlines administrative setup and its function.

6.1 Administration Department in PIA

Every organization has a personnel function whether or not a specific personnel manager has been so designated. Every organization must hire, train, pay, motivate, maintain and ultimately separate employees. Organization has its peculiar administrate structure, which suits the functions, objectives, strategies and rules and procedure of that organization Administration is the collective activity directed towards the attainment of a specific goal. It is rational action, an attempt to maximize ones goals by relating means to ends. Administration is one of our most complex and challenging fields of endeavor. The administration manager must be greatly concerned with the expectations of both employees and society in general. Society at large proclaimed its human resources to have vital needs that move beyond a Work force status.

The employee is simultaneously an instrument of the firm, and human being and a citizen ends. The Pakistan International Airlines has an administration department, which involves the organization and management of man and material in order to accomplish its goals, the administration department is headed by a manager, where as the head of the overall administration is G.M. of the region and at the are level by an Area Ahead . The Administration Manager is directly under the control of G.M. of the respective region.


Administration Department At Rawalpindi Station

The Administration section at the Rawalpindi Station headed by the Administration Manager comprises of an Administration office and three Admin. Supervisors. The activities of Administration department include the personnel and human relations, security arrangement, transportation, stationary, filing and record keeping, discipline in the organization, development and maintenance of support systems for the successful operations and the coordination of the activities of various departments. The communications of various decisions, polices, plans and strategies to the various departments is the responsibility of the administration. The administration department in PIA is concerned with the following functions Organization The administration department in the form of organization of rules, procedures, functions and human resources carries out the structuring of individuals and functions in to make productive relationship.

Management of Human Resources The Administration department in PIA manages the personnel and is concerned with the direction of these individuals and function to achieve ends previously determined. Methods and Procedure The techniques and process of working and the interrelationships of various functions are determined by the Administration Department in PIA. Materials and Supply The Administration department of PIA provides the tools and requirements with the help of which the operational work is carried out. These include Pen & Ink, Computer, papers, files, cabin, furniture, air-conditioner, and etc. these materials and supply are maintained by the PIA Administration Department. Administrative Accountability


The administration department in PIA also carry out the investigations and inquiries of any officer employee violation the rules and regulations, indiscipline and misuse of his authority etc.

Maintenance and Security of the Organizational Environment The arrangements for infrastructure like offices support services, and the administration department maintains physical facilities for the human resources. The security of the offices, building, furniture and fixtures and supplies etc is ensured by the administration of PIA through the maintenance of security staff: Co-ordination and Communication between Various Dept The uninterrupted communication and the maintenance of the means of proper co-ordination between the employees, management, rules and procedures and functions of different departments. Administrative Procedure The administration is required to follow a definite setup specific procedure. Prof. Waldo defines procedure as, the prescribed or customary way of working together with the conduct of an organization business. It is the procedure that governs the internal and external relationship between one individual and another, between one organizational unit and another; between one process and another, between all combinations and permutations of these. The administrative procedures in PIA are classified as Institutional and working procedures. Institutional Procedures The Institutional procedures pertain to staff service and auxiliary functions. The Institutional procedures in PIA include mail and communication, meeting and conferences, internal reporting, preparation, issuance and distribution of documents, space library services, files and records, procurement, budgetary and fiscal administration. Working Procedures The working procedures in PIA include matters like general functions and powers of the committees, eligibility for membership and appointment of members, committee officers and finance, meeting and recommendations.

The entire corporations actives, in spite of the modern means of communications like telephone, fax, e-mail and telex etc is conducted by writing. The administrative procedure, which is followed from the managing director to the clerk. It is collected in a form Office Procedure Manual. The office procedure starts working, when some letter or application reaches from outside i.e. either from the Head Office or any other sister department. The

letter is entered into a registered for the receipt number is put on that. The clerk or assistant sends the letter/hand over the letter to the concerned officer, which after being seem by the section head is processed and put to the officer or department, which has to take the action. The communication meant for the administration department is filed in the department. The manager passes on the letters, if meant for the approval of higher authority like G.M. or the Managing Director of the concerned department who further forward the letters to the Managing Director and Chairman if important policy decisions are involved. There is no way to deny the fact that in between the receipt clerk and the managing director, there might be many coming-backs and going ups. Each officer would add his own note, memorandum or minute. Old records would be looked into, precedents would be discovered and information from various sources would be gathered. The case may require consultation or discussion with another section, department, ministry, provincial government or even a foreign government or even private associations, groups or individual at the appropriate level. Thus the file by this time becomes the file or correspondence, notes, minutes, minutes and memoranda. At last, a stage of decision reaches. There after, there begins a final downward journey of the file. Ultimately the file reaches the officer or assistant, who dispatches the draft to the typist. The typist type the draft, who sends it to the officer or. Assistant Manager, who examines the draft and correct it, if any discrepancies / errors found. If not the letter is passed on to the manager for signature. a)


File System: The entire office procedure revolves around the filing system. In the office terminology, it connotes a device for holding papers for reference. All papers are kept in two categories wise, notes and correspondence comprises all communications received and office copies of out going communications. They are arranged chronologically those reaching first, kept at the bottom. All communications are assigned reference No. The material collected for the sake of understanding is given in the appendix of correspondence. The whole set is then placed in a large folder with a folio-sized cardboard. This makes a file all files are registered I the file register. Record Keeping: Recording means, the process of closing a file after action on all the issues after action on all issues under consideration are completed. When action on a file is taken, it comes back to the assistant, who with the approval of the officer classified the file as class A, Class, B and Class C. After the classification of file, the assistant sends the file to the indexing clerk who indexes them. A file number is given to each file. These files are filed


vertically standing in the cabinets of each department. Records are kept for three years after which they may be discarded. The administration section performs all the routine matters of administration like leave and passage. Maintenance and updating personal records of employees is also done by the admin. Section. The Admin. Manager along with his staff is responsible for the implementation and communication of all administrative order issued by the Head Office. Such order is issued from time-to-time, because of changes in existing rules or due to the absence of rules. As the General Services Department is not present at the Rawalpindi station, so all their activities are performed by the Admin Section e.g. janitorial works and medical activities etc. carries out the employment activities as advised by the employment section of the Head Office and also supervise the local transfer of the employer. The Admin. Section also takes disciplinary action against accused employees after an enquire has been carried out by it. The Admin. Section arranges the local training Programme of the employees and co-ordination meetings among various departments. All the matters pertaining to the employees are dealt with by this section e.g. checking the monthly attendance of the employees, awarding cash rewards, issuance of tickets to PIAs employees and their families, maternity leave, education, EDH (Executive Dining Hall) coupons etc. It also deals with all the law cases Vs. PIA and lease agreements with outside parties.


Manager Administration:
The principal coordinator at the area or station level is the Admin Manager he is responsible to implement all the instruction of G.M. All the matters of the administrative nature are routed through the admin manager for onward submission to the Head office and top management. 1.

3. 4. 5. 6. 7. 8.

Specific Duties/responsibilities of Administrative manager: For his administrate functions the Admin. Manager is directly responsible to the General Manager. He helps the General Manager to perform his administrative functions too. He takes all the disciplinary actions against the employees and has the power to demote any employee according to the rules. He does granting leave of the employee. All local transfer are done by him. All the admin, orders, circulars, officer orders came through him and are implemented accordingly. All jurisdictions. The Admin does approval of the medical bills of the employees. Manager according to the medical rules and are then sent to the finance section for payment. Liaison with staff canteen committee for any conflicts.

9. The Admin. Manager issues tickets to the military personnel and recovers payments from their concerned department. 10. He deals with all legal cases on behalf of PIA courts including accidental claims cases from PIA. 11. He also deals with all those parties who have hired the PIAs buildings or from whom PIA has hired their buildings.

Administration officer
1. 2. 3. 4. 5. 6. 7. 8. 9. Function of the Administrative Officer: Supervises the admin. Office and reports of the admin. Manager on policy matters. Implements all disciplinary / administrative measures as advised by the management. Supervises and keeps the personal record of the employees regarding leave, passage security passes etc. Circulates or communicates all admin. Orders, circular, organization orders, received from head office / management to the concern section. Keeps correspondence with local agencies / head office regarding the matters which falls under the jurisdiction of admin. Officer. Keeps and supervises the attendance / overtime statements for submission to the concerned section. Controls the inventory list of the admin. Section. He also does processing the cases of employees recruited by PIAs employment section at the heed office. Establishes the welfare activities of the employees.

Administration Supervisors:
The function of the administrative Supervisors is 1. 2. 3. Handles and maintains all the personal file cases, leave and passage files of all employees of Rawalpindi station and whole territory which is under the jurisdiction of G.M Rawalpindi Maintains register and correspondence pertaining to mileage allowance of GM, PSM, CSM, SPOs and all other officers at booking office. Prepares attendance, overtime and other related statements for submission head office.


4. 5. 6. 7. 8. 9.

Prepares and types attendance statements of GM Secretary, Admin. Section Motor Transport, Cargo, Reservation, communication and works and sends it to the pay role section. Maintains and issues medical cards and identity cards to the employees. Maintains budge control register of Marketing, Admin. Canteen mosque Liaises out any function assigned by G.M and Admin. Manager. Receives, collects and checks all medical bills from employees on daily basis and makes entries of medical expenses in register and submits the bills to the finance section for payment. Makes/Photostats of required official documents.

Personnel Officer: To perform the work of the corporation the personnel officer has the following function: 1. Keep and supervise the personal record of the employees regarding leave, passage, and security passes. 2. Process the cases of the people recruited by PIAs employment section of Head Office. 3. Supervise the personnel officer and report to the manager Administration of policy matters. 4. Have correspondence with local offices/Head Office regarding the matters, which fall under the jurisdiction of the personnel office. 5. Distribute all important material such as administration orders, circular, organizational orders received from head office/ management to the concerned sections. 6. Implement all disciplinary / administrative measures as advised by the management. 7. Supervise the attendance, over time statements for submission to the concerned sections and also control the inventory list of the administration.

Personnel Function of the Administration Department: The principles governing the building up of an administrative structure are important but a structure unless properly manned, remains a dead weight. All the personnel and human relations functions are assigned to the Admin... depth in PIAC. The Administration Department performs the following functions with the consultation of Head Office.
Important Function of the Administration Departments:


In a large and complex organization, efficiency can only be achieved and maintained by a continuous and conscious effort of leadership and direction form senior officer. It is sufficient merely to have good methods and clear instructions. As in many other spheres of activities, the great problem is the human one and the greatest need is to recruit and train those who are likely to be the leaders of the future.


Recruitment and Selection:

Recruitment is the discovery of the potential applicants for actual or anticipated positions. The vacancies are created after the approval of the finance department. The PIA recruitment and selection procedures involve the following:


Recruitment Policy: The recruitment policy given the following conditions for recruitment: The age limits for the recruits are between 18-26 The educational qualifications of the employee.

Officers (Executive Category) Master Degree /MBA/MPA /BBA(honors)

(Any recognized University by Federal Govt.) Assistant Officers/below Category Matriculation to B.A./B.Sc ii) Sources of Recruitment: Whenever a vacant position is available, the head of department make reviews of the existing personnel and carry out a search within the organization for suitable persons before trying the outside sources. But if a person with the required qualifications for a given job is not available, fresh recruitment is made. iii) Techniques of Recruitment: The vacant posts are advertised through the local and national newspapers and applications are invited with the job specification and description showing the job requirements and eligibility. iv) Selection Procedure:

The selection process is concerned with the securing relevant information regarding the applicant. The selection procedure uses the screening devices so that the most efficient and professional employees should be available to the organization. The selection procedure in PIAC is based upon three important principles, namely: I. Competence II. Equality of Opportunities III. Neutrality The following screening devices are used in the PIAC during the selection process.







Application Blank: Each applicant blank provided by the Admin. Department. The application form has to be filled by the applicant in his own handwriting submitted to the admin dept before a specific date. The format of the application blank is given in the appendix. In the application, the personal data, educational qualifications and experience etc. of the applicant is give. Test: These applications are scrutinized and the candidates passing through the security are called for a written test. The test s conducted by a Board from the Head Office with the assistance of the Administration department at the concerned stations. Interview: Those qualifying the written test are called for an interview administered by the selection board assisted by the administration department. Physical Examination: There is usually a formal physical examination of the candidates. Another requirement is the submission of a formal Medical Fitness Certificate from a doctor. Approval by the Competent Authority: After going through the whole process of selection, the list of recommended applicants is sent to the competent authority for approval. Offer of Appointment: After the approval, the Administration Department notifies the decision to the candidates through a letter of appointment.




Orientation Period: After appointment, the employees go through an orientation period i.e. Probation, for MBA/MPA/BBA/BPA (honors) as executive the period is 5 weeks. And for employees of under-officer class, the period is 3-6 months. Confirmation: After successful completion of the orientation period, the employees apply for confirmation to a competent authority.

6.6 B)

OTHER HUMAN RESOURCE MANAGEMETN FUNCTIONS PROMOTION/TRANSFER: A promotion is an upward advancement in the organization to a position, which commands higher opportunities, greater authority, better service conditions and a higher rank. All the promotions in PIAC are made on the basis of merit of each case, and not by the virtue of seniority alone. Transfer to different jobs either to fill definite vacancies or to perform assignments to develop individual are made. The Head office in accordance with the promotion makes promotion and transfer to all categories and grades and transfer polices of PIAC. The Admin department helps in co-ordination these activities of transfer and promotions. RETIREMENT/PENSIONS: The age of retirement is completion of 25 year of service or attaining the age of sixty unless they are otherwise not fit for wok and the employee can opt for pension. Records of these employee are maintained by the Admin, department, which after the retirement of the employees is sealed and stored. CONTROL Admin department exercises control by two ways upon the activities of various departments and employees. These are through internal and external auditing and controlled budgeting. LEAVE Leave is temporary absence from duty. All application for leave is addressed to the admin manager through proper channel. An employee cannot












claim leave ad a matter of right and the competent authority at its discretion may refuse of revoke any kind of leave. Leaves are applied fro and sanctioned in the terms of days. The following types of leaves provision occur in PIAC. Casual Leave All employees are entitled to 10 days of causal leave in a calendar year. The maximum number of casual leaves at a time is 3 days. Privileged Leave Privilege leave may be on the following terms, Fully Pay: The maximum period of leave on full pay, granted at one time is 30 days for service less than 10 years, 35 days for service over 10 year in a year. The fifteen days of this leave are to be availed otherwise collapsed. Sick leave Sick leaves may be granted up to a maximum of 12 days to an employee. Disability leave Disability lave may be granted up to a maximum of 180 days to a person, disabled by injury, ailment or disease occurred in the course or in consequence of duty or on official position. Ex. Pakistan leave Leaves without pay may be granted to employees, who proceed to abroad during the leave for a period of one week to 3 years. PASSAGES The passages or free ticket are given to the employees by the Admin Department maintaining its records. TRAINING Accordion to Gallbraith, We can get the larger part of our output not form more capital investment but from investments brought about by improvement. PIAC has its own training center, known as PTC, under the control of the administration department. It includes. On the job training On the job training is given to employees already existing in PIAC. It is given to employee to update the employees knowledge of various procedures, methods, rules and regulation etc. and familiarize the employees with the changes and advancements taking place from time to time. One of the methods of no-the-job training includes job rotation. Job Rotation




As an important method of training, it enables the employees to work at different positions and get an overall picture of the working of PIAC. Pre-Job training The pre-job training is imparted to the various categories of employees before they join the organization and assume responsibility. The pre-job training to the flight stewards and hostesses for specific period. THE PIA TRAINING CENTRE The PIA raining center at Karachi is possible the only airline training establishment where comprehensive instruction in all major field is given under one roof. PIA has been training its pilots, mechanics, technicians, traffic / sales staff and cabin crew since 1956, but it wasnt until 1960 that all training facilities were amalgamated at one centralized place and expended to train personnel in all fields of the airline. In October 1975, the training center moved to its new three stories specious premises near the Head Office where it has been able to add more attaching aids. Training facilities available within the airline also include flight Simulators for basic and recurrent training of pilots and other operational crew. In 1992, PIA introduced computer based training (CBT) facility; containing courses are for specific aircraft for training its engineering cabin and cockpit crew. Courses are conducted according to the requirements of the industry and the standards laid down by the civil aviation authority (CAA) of the United States and the international Civil aviation organization (ICAO) al courses are also approved by the Civil Aviation Authority of Pakistan. Deferent courses and training facilities are also offered to public and private sector organization and individuals within Pakistan. Basic and advanced raining facilities are also provided to foreign carriers, and courses in specialized fields are conducted at the center as well as location abroad. Over 40 airlines from Asia, Africa and Europe have used their facilities for the training of their pilots, maintenance engineers and other disciplines. The total number of such trainees exceeds 6,000. Training is also being conducted for African of scholarships granted by the ministry of foreign affairs, Government of Pakistan. In 1994, PIA training center introduced advanced course in Quality management TQM and ISO-9000 certification. It is planned to develop PTC to receive an ISO-9000 certification in the next one-year.




PIA training center was first selected to conduct civil air transport course for developing countries on behalf of government of Pakistan in collaboration with Japan international co-operation agency (JICA) in 1988. PIA has so far conducted eight such courses, in which senior airline and civil aviation officials of 30 countries have participated. In April, 1995 PIA and JICA concluded an agreement to conduct another five such courses in the field of civil air transport management. BENEFITS AND ALLOWANCES The primary goal of the fringe benefits is to retain the employees in the organization on a long-term basis. These benefits include medical facilities, transport facilities car allowance house rent allowance etc. all data about the fringe benefits and allowances are recorded in the personal file of the employees and are maintained by the administration dept.


SALARY Salary and pay scales of an organization is a test of attracting professionals and efficient manpower towards the organization and are also a means to retain them. The admin dept. maintains pay records of employees categorized into different pay groups according tot eh salary structure it includes:

Pay group I-IV

:It includes the Unionized Staff Includes the officers and middle level management

Pay Group V-IX:

Pay Group X-Above:It includes G.M; and other higher executives A special pay group is for the managing director, director and pilots. J) PERFORMANCE APPRAISAL Performance appraisal is the systematic evaluation of individuals with respect to their performance on the job and their potential for development. In PIAC, the evaluation is made by each person immediate officer, and this rating is in turn reviewed by his superior. Thus their superiors also evaluate all the people who appraise others. The annual credit report (ACR) is made of every employee at end of the year in view of the evaluation and appraisal given by the department head. K) EMPLOYEES RECORD The administration is also required to maintain an up-to-date record of all the employees of PIAC. For this a personal number (P.No) is issued to


every employee, a file of his is maintained containing the following particulars. Personal data Qualification Experience Promotions Pay Any other information Dummy Recorded Dummy record is maintained for all employees as well as the outstation by the admin. Dept that are the duplicate of the actual records maintained at the head office. Microfilms of these records are maintained to avoid loss in case of damage or misplacement of the written records. DISCIPLINE / PENALTIES If any violation of the rules and regulation, procedure and misuse of authority and function on the part of an employee takes place, the administration department asks for a show cause and explanation through the show cause notice. If found unsatisfactory. Inquiry is carried out, and if found guilty penalties are given which may include. Decrease in pay Demotion Discharge Suspension Dismissal GOLDEN HAND SHAKE The present government has intimated golden handshake. The administration depts. also carry out this scheme according to a prescribed policy. CAREER DEVELOPMENT Establishment of various career channels for the development of the employees is also the function of the admin, dept. Manpower Planning The process by which the management determines and assures that the organization will have an adequate number of qualified person available at the proper times, performing jobs, which meets the needs of the organization and which provides satisfaction for the individuals involved the administration








department plan for the manpower requirements of various depts. And keeps the most appropriate number of employees in various depts. Human Resource budget Different departments analyses working loads of the employees and according to it, a budget is made and the work load of these departments are maintained as per the budget, through new induction transfers etc. Human Resource Management Human resource management is to utilize the human resource according to the requirement. The Pakistan international Airlines has the basic objective of Utilization of human resources To properly train them as to get an optimal level. Legal Matters PIAC has a legal division, supervised and operated by the admin. Dept. matters relating to rules and regulations. By laws and state and international laws are dealt with by this division. Security The security division of the PIAC has a very important role. It provides safety and security to the infrastructure, operations, assets and fixtures and documents etc. It also ensures the security of the personnel of the PIAC. Industrial Relations Industrial relations refer to a dynamic and developing concept, which is not limited to a complex of relations between trade Unions and management but also refer to the general network of relationships normally obtained between employees and employees. It is considered very important for any industrial / service organization to have maximum satisfied employees. A workable atmosphere can only be assured through participative management in an organization, the administration department advises the management on the existing labor laws and ensures the strict adherence to it. It plays the role of mediator between the management and the employees union in case of any deputes between the management it maintains cordial and harmonious atmosphere in the organization. According to the industrial relation ordinance 1969, 50 or more than 50 employees are permitted to form a union. In case of more than one union election are held to elect labor leaders under the national industrial relations commission (NIRG). In case of any disputes between the management and the labor, both condole NIRC. In PIA a referendum is held under 22 and 23-IRO.


At the head office there is a CBA, while at the station level, it is a local chapter. 6.8 CBA (Collective Bargaining Agent) CBA being the representative of the employees, put their demands to management, which is called the charter of demand. In case of any dispute, the management and CBA negotiate of rainy settlement. The CBA ash the director access to the mange mint i.e. G.M. or admin manager in case of any problem. If the demands of the CBA are approved then minutes are issued by the admin. dept. and are approved G.M. or IRO action. Rules for CBA Any employee of pay-group I-IV can compete for CBA. At the same time, he is the regular employee and has to abide by the rules and regulation. The CBA tenure is 2 years. PIASSA: PIA senior staff association

1. 2. 3. 4.


Industrial relation officer (IRO) In every department there is an IRO to maintain cordial relations between management and Union Duties and Responsibilities of the IRO To advise the department Head/G.M/Sectional Heads / officer on the provision of labor laws which are applicable in their areas of activity. To regulate staff interviews with the department heads of resolving employees grievances. To assist line management in maintaining congenial and harmonious atmosphere in the pursuits of managements directives and policies. To carryout regular inspections and submit reports on specified proofreads to highlight, whether breach of any applicable laws is involved and take remedial action. To keep contact with all the employees at all levels in the department to know their reactions / feelings of management policies and decision taken from time to time and keep the department authorities and industrial division informed of the same, LEADERSHIP STYLE


Leading is the process of influencing others to accomplish specified objective. It consists of interpersonal influence, exercised in a situation and directed by means of communication process towards the attainment of a specified goal or goals. The leader of a department section or the whole organization has the dual objective, representing the interests, objectives and functions of the management and achievement of organizational goals and objectives and getting subordinates to work for the attainment of theses goals, and the safeguarding of the interests of he subordinates against the higher management. The leadership style means, the behavior of the leaders what he or she does what he or she emphasizes, and how he or she deals with subordinates, in PIA, the leadership styles is autocratic, who tend to make unilateral decisions, dictate work methods. Limit workers knowledge about goals to just the next step to be performed and some time given feed back that is punitive. In PIAC, the employees have very little say in decision making and no participative management is involved in the policy formulation. Here we must point out the exception that sometimes the CBAS influences the decision making through their coercive power.



7.1 Introduction
Through the technique of "SWOT" one can analyze the present performance conditions of an any organization and its weaknesses. Also the opportunities it can grab in the external environment and the threats it faces. This technique serves as a base for sound recommendations and conclusions. I will use SWOT analysis technique in order to come up with conclusion about PIAC.


Strengths are found in the internal environment of the organization. They are the backbone of an organization. Strengths of an organization can over come any kind of weaknesses that the organization is facing. PIA has a number of strengths due to which it is still one of the leading airline in Pakistan. These are as following
PIA has status of being Flag Carrier of Pakistan.

Highest Market Share at domestic network.


Multilingual Staff on Board

Booking Offices in all major cities both at domestic and International

PIA has well established brand as its oldest airline in Pakistan. Subsidized fares

Halal meat available at all flights.

Electronic ticketing by web and through SMS. Highly Professional Staff Having Governments protection


Weaknesses are also found in the internal environment of the organization. Weaknesses if more in quantity can break down an organization easily. They can over come the strengths as well. PIA also faces a number of weaknesses which are as following Old aging fleet of PIA causing higher operating cost.

Huge burden of Employees which cause financial burden.

Inadequate space on the aircraft

Charging of higher fare as compared to competitors. Lack of marketing activities as compared to competitors.

Poor quality of food/service on board specially in domestic flights




Opportunities exist in the external environment. They need to be recognized and used according to the business being run. An opportunity recognized and utilized at the right time will be the strength of tomorrow. Such kind of opportunities also exists for PIA in its external environment. Some of them are as following: PIA has huge potential market in Middle East if PIA upgrades its fleet.
PIA has largest domestic network and by proper route planning PIA can generate huge amount of Revenue with higher profit. PTDC provides favorable market for domestic as well as international sectors for the airline

PIA can generate more revenue by attracting customers through Web and Mobile Reservations system.


Every organization faces external threats which could do damage to the business's performance. These threats can damage the business and even could be the reason of bankruptcy No doubt, PIAC is well established and seasoned organization. Yet there are certain threats being posed by the external environment. Some of them are as under:
Negative rising perception about the country, regarding terrorism. Political instability and law and order situation. Rising fuel prices in the world. Over staffing at all levels

Frequently rising Airlines fare

Fast growing domestic and international competitors


Effective promotion strategies adopted by other competitors like Emirates and Shaheen anr Airblue.


Conclusion of Using SWOT Analysis:

From the above SWOT analysis I came with certain Conclusion about PIA. No doubt PIA has good market for further growth and it has many advantages over many others airlines. But PIA should upgrade its old aging fleet as it is causing the PIA major financial loss because fuel prices has risen in the international market and PIA has still old fleet, which causes higher operating cost. Another burden on PIA is it has the highest number of employees as compared to other airlines, as number of persons per aircraft is highest. PIA should adopt a good marketing plan so that it will generate higher profit and business classes seats should be promoted in the market and passengers should be attracted toward that segment too. Merit based promotion should be emphasized. PIA should adopt competitive strategies both at domestic network and on certain international routes.



During my 8 weeks internship in PIA at Islamabad/ Rawalpindi station. I observed various problems which PIA was facing or employees were facing, so I came up with certain suggestions for the better functioning of the Airline. Some of these problems are of such nature that their solution will help the Airline and its workers in cooping in this complex world of globalization.

These problems are

1. Employees were not satisfied about the Promotion procedure and merit was not encouraged. Chairman of PIA should always be appointed from with in the organization.


2. 3.

PIA hadnt a good marketing strategy for certain international routes where PIA was facing financial losses. PIA is operating with Old aged fleet which is causing financial burden on PIA as PIA still has 4- engine Boeing 747 which now is known as gas guzzler as its has highest operating cost and the profit generating Saudi Arabian route is now being operated in loss. Passengers were not satisfied about the refund process as it was time consuming. PIA have highest employee ratio to per airplane. Which is a huge financial burden on PIA. Complaint of Employees as they were not properly facilitated comparing to the other airlines.

4. 5. 6.


I would like to give certain suggestions for PIA betterment and profitability. 1. PIA should adopt transparent policy that employees should be promoted on merit basis. And Chairman of PIA should be appointed from with in the organization. Union should support it, it will motivate the employees and PIA will grow in profit. 2. PIA should adopt good marketing policies so that it will bring higher profit and maximum utilization of its available resources, Business sector should be attracted to operate at full potential. 3. PIA should upgrade its fleet as its causing the airline higher operating cost and PIA is incurring loss .PIA should purchase new Airplane with twin engines these will reduce the operating cost of PIA.


4. 5.

Airline should focus on the customers satisfaction, refund process should be quick so that customer remains loyal to brand. PIA should not induct new employees till the time they are needed on the basis of my personal observation at Rawalpindi station I have seen that a task which can be performed by person PIA had 3 employees for that.

6. 7.

PIA should give bonus to the industrious and competent employees. There should be control on the increase of fares, as mediocre are in majority in Pakistan, and it is highly difficult for to even think about the air traveling. Management should think over it and at least they can start a new packaged flight twice a week having 50% fares.


Unnecessary facilities provided to the Government Department should not be discouraged but with drawn as it causes financial losses. Management should focus on computerized system up gradation and implementation.

9. 10. 11. 12.

Management should hire the services of specialized IT personnel for their system development and up gradation on time. There should be clear and even distribution of work and only qualified person should be appointed on jobs. There should be improved service standards and that should focus on quality. PIA should offer its services of reservation and seat confirmation with by SMS and flight confirmation message should also be sent via SMS to the passenger.


PIA should give more incentives to its frequent flyer as it will generate more brand loyalty by giving better incentives to the customers.


1. 2.

ons 3. 4. Annual report of PIAC 2008.

5. An internship Report on PIAC by Miss. Asiya Khan MBA LUMS.

Lahore 6. (2006-2008) 7.

8. PIAC in-flight entertainment magazine. 9. New Frontiers in HRD By Monica Lee, Jim Stewart, Jean Woodall

10. HR Department Rawalpindi.