project report on pia ( causes of loss )
DESCRIPTION
This report is part of a project by students of MBA during their class in Alfalah Institute of Banking and Finance.TRANSCRIPT
Majid Saleem Rana MBH-13-43
Zeeshan Ahmad MBH-13-40
Ch. Waseem Nazir MBH-13-38
Presentation By
Mam Aqsa.
Presentation To
Majid Saleem RanaMBH-13-43
TopicThe topic of our research report is the causes of losses to Pakistan International Airlines (PIA).
PurposeThe purpose of conducting the research is to find out the Areas of improvement of PIA and suggest remedies to over come the loss.
Source
we get most of the data from Articles, Annual reports, internet, PIA website, newspapers and media reports.
Why Pakistan International Airline (PIA) is going in loss since couple of years?
Problem Statement
Domestic Network (24) International Network (38)
PIA Domestic and International Network
48%
35%
17%
Ch. Waseem NazirMBH-13-38
Strategic Tools
Key Financial Ratios
1 Current ratio0.22 %
2 Quick ratio0.17%
3 Debt to total assets ratio1.44%
4 Debt to equity ratio-3.69 %
5 Inventory turnover 27.98 %
6 Fixed assets turn over 1.11 %
7 Total asset turn over 0.85 %
8 Gross profit margin.1392 %
9 Net profit margin -0.19 %
10 Return on total asset -0.16 %
Product Positioning Map
High customer loyalty
PIA
Low customer loyalty
Air BlueShaheen Airline
High Convenience
Low Convenience
Operates all around the country including Sakardu, Bahawalpur and Baluchistan etc.
Tariff charges are high compare to Air blue and Shaheen Air International
The BCG Matrix
PIA
Air BlueShaheen
High Medium Low
Medium
Low
High
RELATIVE MARKET SHARE POSITION
G
RO
WT
H R
AT
E
Zeeshan Ahmad MBH-13-40
SWOT Analysis
Strengths
A wide and huge web of domestic monopoly with 24 destinations
A wide and huge web of 38 International destinations
Government supports are there for any uncertain situation
It has strong brand recognition
Weaknesses
Over staffing
Lack of accountability & High corruption level
High charges as compared to other airlines
Large amount of debt
Opportunities
New destinations around the globe
Consumer loyalty towards the national air line
New better training programs to improve the quality of work force
Market Shares
Govt. subsidy on oil
Threats
Government instability is the major threat
Fluctuating oil prices
Latest Technology aircraft and air control system planes has been adopted by rivals
Large amount of debt and interest
Over Employment
Nepotism and Political involvement during recruitment & selection
Lack of experience relating to aviation industry for the top management
Lack of training facilities
Areas of improvement
Recommended Strategies
Right Sizing
Retrenchment or divestiture
Market penetration and Product development
Privatization
Should focus on the areas which contribute more in profit.
Those operations should be terminated which are continuously in loss in order to minimize the loss.
Reduce no. of employees by giving them early retirement in order to reduce cost.
Hiring the services of expertise to train management to improve their effectiveness and efficiency.
New training programs to improve quality of work force.
System of check and balance.
Should focus on Cargo service.
Conclusion and Recommendations