Pakistan International Airlines (PIA) continues a rocky path as efforts toward semi-privatization have failed and the company’s financial losses increased last year. But this year, the Pakistan government brought in Bernd Hildenbrand, a German national, as COO. With previous experience at Lufthansa—he was based in Malaysia overseeing its cargo operations—Hildenbrand is tasked with overseeing a modernization of PIA that aims to improve service and grow the carrier’s network, market share and customer base.

What has been your experience since joining PIA?

PIA is on a fundamental path of change, encouraged by the government, to move into a new era. The carrier has become rather old-fashioned over the years. We want to change this, improve the product and bring PIA to a standard similar to that of other world carriers. One of our problems is that our onboard cabins have never been changed; this unsatisfactory situation applies across our fleet. So this is one of the things we are working on. Up to five Boeing 777s will be reconfigured with new business- and economy-class cabins, new inflight entertainment systems and services. The first reconfigured aircraft should be available from February 2017.

The company has also transitioned into a limited company, and that means I’m now taking care of the business. The Pakistan prime minister realized that PIA has to change and he is serious about it doing so. His vision is to see PIA reach the kind of service levels you see at Etihad Airways or Emirates Airline.

Give an update on the current fleet and what is needed?

Our last remaining four Airbus A310-300s will leave the fleet after the Hajj pilgrim season later this year. PIA operates 11 Airbus A320s—and that will increase to 13—as well as 11 Boeing 777s [-200ER/200LR/300ER] and 10 ATR 42/72s. These aircraft have an average age of 10 years. We are looking for additional long-haul capacity, for example with Airbus A330s. The A321 would be ideal for our needs, but it’s impossible to get one. 

Where are your focus markets?

Our main airport is Karachi, but the metropolis is no longer the center it once was. The best business for PIA will be generated from Islamabad and Lahore. They are our future cities. Our best routes are from those two cities to London. Another important route is Peshawar-Kuala Lumpur. One of our biggest problems is that we don’t have a dedicated hub. Therefore, we need to create some new concepts. When Islamabad gets a new airport in July next year—which will be similar in construction to Singapore Changi’s Terminal 2—this will be the perfect facility. This will be an important part of PIA’s reinvention. Our administrative headquarters are based in Karachi, but we have transferred some of them to Islamabad.

Are staffing levels and productivity where you want them to be?

About 500 employees leave the company annually and we do not replace them all. Our cost structure is quite good and we are making improvements. We are evaluating, for example, how to establish a joint venture for catering and this would be done with the best caterer in the market.  

We do need to better motivate our employees. In the past, there has been new management every year and that has created frustration. But it is quite easy to motivate employees. There are so many areas on the agenda where we can improve. Cabin cleaning is a must. An aircraft must smell clean. Also, a new brand and livery should be available by the end of the year. 

With maintenance, PIA now does its A320 C checks in house and our engine shop is becoming specialized in the CFM56 engine. We have also begun landing gear maintenance. All in all, our maintenance performance is good, but there is room for improvement. 

What about on-time performance?

We improved our on-time performance from 60% to more than 80%. In the last few months this increased to 95%. But this created a new problem because some passengers started missing their flights once PIA became more punctual. Airport infrastructure issues also create some headaches. For example, Islamabad airport has no taxiway, so aircraft have to do a lot of backtracking. Sometimes, heavy rain affects operations. Still, we operate around 80 domestic flights per day and 55 on international routes. Besides London and Kuala Lumpur, flights to Toronto and New York are very important to us.

Do the major Gulf carriers make it hard to compete?

Emirates operates from Dubai to seven destinations in Pakistan. That’s not easy for us to defend against at the moment. To do so, we would need more aircraft and have to re-evaluate our crew base in Dubai. I hope this happens in 18 months when we might be able to base three aircraft in Dubai. There are 1.5 million Pakistanis living in Dubai. Our market share there has dropped to 9%.

So how do you envision PIA looking in the future?

PIA will grow from 38 aircraft to 60 by 2020. All three carriers in the nation—PIA, Shaheen Air and Air Blue—have a total of 70 aircraft combined. In a country with nearly 200 million inhabitants, that‘s really nothing and it creates a lot of potential for growth. It is still too early to dream of being part of a global alliance, but we have codeshares with Etihad, Turkish Airlines and Thai Airways, We would like to extend that with more agreements. In five years, PIA  should be delivering a much better service, be focused on what’s important, and operating daily flights with harmonized schedules.