Internship report-PIA Multan

INTERNSHIP REPORT ON

SUBMITTED BY IQRA KHAN ROLL # MB-08-12 MBA-I (3RD Semester)

September 11’2009

TABLE OF CONTENTS ACKNOWLEDGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 PREFACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 PIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 INTRODUCTION TO PIA DEPARTMENTS . . . . . . . . . . . . . . . .5 TASKS PREFORMED AT WORK . . . . . . . . . . . . . . . . . . . . . 13 APPLICATION OF CLASSROOM LEARNING IN PIA . . . . . . 17 WHAT I HAVE LEARNT AS AN INTERN? . . . . . . . . . . . . . . . 19 SWOT ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 PEST ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 SUGGESTIONS TO PIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 IF I WERE A MANAGER IN PIA? . . . . . . . . . . . . . . . . . . . . . 28 CONTACT INFO OF MY SUPERVISORS . . . . . . . . . . . . . . . .29

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ACKNOWLEDGMENT

To my parents and friends who were always there by my side to guide me and give me the courage that I can do the best in my life and taught me the difference between the good and the evil, for this be my guide in my life. And to my teachers who are my soul guardians, for they taught me the very best of their knowledge and experiences.

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PREFACE My learning experience with PIA begins with my joining from 08-06-09. It consisted of 6 weeks, spending each week in 6 different departments of PIA. My internship report contains all the information about my work experience with PIA, which was established in 2002 and started its operations in Pakistan. I have covered all my activities performed in the span of 6 weeks in PIA with my learning detail in the organization. The applications of my class room learning as I observed in PIA are discussed with respect to each department. In the end my internship report is accompanied with the SWOT and PEST analysis of PIA. In the end I conclude with some of my dear suggestions to PIA for its betterment and my actions which I could have taken IF I were a manager in PIA.

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PAKISTAN INTERNATIONAL AIRLINES (PIA) Pakistan International Airlines (PIA) was formed in 1955. It is the flag carrier airline of Pakistan, based in Karachi. It is the 16th largest airline in Asia, operating scheduled services to 73 destinations throughout Asia, the Middle East, Europe and North America, as well as an extensive domestic network linking 24 destinations. Its main bases are Jinnah International Airport, Karachi, the Allama Iqbal International Airport, Lahore and the Islamabad International Airport, Islamabad/Rawalpindi. The airline also has secondary bases, including Peshawar International Airport, Faisalabad International Airport, Quetta International Airport and Multan International Airport, from which it connects the metropolitan cities with the main bases, the Middle East and the Far East. The airline is owned by the Government of Pakistan (87%) and other shareholders (13%). It has 19,263 employees (at March 2007).

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INTRODUCTION TO DEPARTMENTS PIA has been divided into the following departments: Human Resource/personnel  Finance  Marketing  Engineering  Flight Operations  Airport Services  Cargo Sales & Services  Information technology

PERSONNEL/HR DEPARTMENT 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.

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HUMAN RESOURCE MANAGEMENT FUNCTIONS

• Promotion/transfer: • Retirement/pensions: • Leave o Casual leave o Privileged leave o Sick leave o Disability leave • Passages/free tickets • Training • Benefits and allowances • Salary Pay group I-IV :it includes the unionized staff o Pay group V-IX: includes the officers and middle level management o Pay group X-above:it includes g.m; and other higher executives o A special pay group is for the managing director, director and pilots. o

• Performance appraisal • Employees record Dummy record is maintained for all employees as well as the out-station by the admin. Dept that are the duplicate of the actual records maintained at the head office. Microfilms of these records 7

are maintained to avoid loss in case of damage or misplacement of the written records.

• Discipline / penalties o Decrease in pay o Demotion o Discharge o Suspension o Dismissal • Golden hand shake • Career development • Manpower planning

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 8

 Internal Audit  Revenue Management All the above divisions are operative in PIA head office islamabad. In each station as well in Multan,the finance department is divided into a number of sections :

Disbursement section (It deals with the internal finance of PIA region)

 Refund section (It deals with the refund payments)  Agency Sales unit (It deals with the sales finance of all travel agencies of the region)

MARKETING DEPARTMENT It looks after development of Marketing Plans & Policies. This department performs all marketing functions. Marketing department in Multan station has three divisions • Sales promotion (with the help of travel agents) • Post Flight Analysis (PFA) • Reservation & Ticketing 9

o Counter T&R o Airport T&R o Web-ticketing o Through Travel agents o Home Delivery tickets o Kiosk Machines

ENGINEERING DEPARTMENT This department takes care of planning, base/line maintenance and overhauling of whole of the PIA’s 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

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 Development Engineering Division  Power Plant Division  Resource Management 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

AIRPORT SERVICE DEPARTMENT Customer Services Department has two subdivisions:

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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 a) Flight Services Division This subdivision provides for provisioning of all in-flight services like food, cabin crew and field services.

CARGO SALES/SERVICE DEPARTMENT The cargo sales and service department has the same functionality as of passenger sales and service. It allows shipment all over the world in PIA network. Cargo rates vary from country to country. It has the booking of cargo, loading and unloading, refund etc. However PIA has none of its planes specialized for cargo only. Six categories of goods in cargo are • Business related goods (textiles, accessories, machines etc) • Perishable goods (meat, fruits and vegetables) • Livestock

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• Gifts • Valuable goods (gold, platinum etc) • Dangerous goods (tools, drugs, chemicals etc)

INFORMATION TECHNOLOGY DEPARTMENT The functionality of It department in regional stations of PIa is restricted to only dealing with the computer and communication related problems in PIA office and at airport. In Multan, IT officers deal with the IT problems of D.G.Khan and Rahim Yar Khan remotely as well. Files are transferred through using FTP among other computers and the main server. Basically at Multan Airport, There is 2 DXX( cross Connect Circuit) Circuits placed at Airport 1. From Lahore Booking office to Multan Airport 2. From Multan Booking office to Multan Airport Multan is connected to Lahore and Lahore is connected to Karachi • “SABRE”, a software, is used for Ticketing and Reservation • “AVIVA”, a software, is used for cargo purpose Wireless net: 1. From Airport to I.T Room 2. From Airport to Cargo 3. From Airport to Engineering 4. From Airport to Store

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MY TASKS/ACTIVITIES IN PIA I joined the prestigious organization PAKISTAN INTERNATIONAL AIRLINES CORPORATION for my internship on June 8, 2009.I was accompanied by 2 other internees. The internship was scheduled for six weeks. The schedule was provided to me on my very first day and i were asked to conduct my activities as per schedule. PIA do not require from internee to work like staff. For internship trainees briefing and observation method is used to train them. The detail of my activities during this program is as follows

WEEK 1(HR DEPARTMENT)  Introduction to the PIA’s HR department  I worked on HR software TMS ( Time management system) Function : Online employee record keeping I recorded the approved leave applications in 1) Leave management (casual/sick/privilege Leaves) 2) Payroll management (absentees/meal allowance/shift allowance/over time/lunch guard days) And meal shifts  I worked on the manual attendance registration marking 14

a. b. c. d. e. f. g. • •

Presents Weeks offs Days offs. OCS (out station service) Shifts Leaves Absentees  I checked mails and replied to them as directed by my supervisor I mailed a complaint against frequent server errors of TMS I checked & printed mail by DGM HR ( Deputy General Manager) regarding an internal audit “Excessive Manpower In Multan”  Made entries in the Dummy employee record files for 1) Employee ticket concession (Domestic/International) 2) Leave entries for employees in DGK & RYK

WEEK 2(MARKETING DEPARTMENT) 

Direct Sales Promotion-I Observed contacting regular individual clients through direct meeting & phone calls and observed contacting business houses where PIA finds the best input

 Bank Settlement Plan-I calculated the 35 days average total sales of travel agencies. This amount totals their bank guarantees for IATA.  I made the fortnightly sales report (01-06-09 to 15-06-09) of all travel agencies.  I made the monthly sales report (01-05-09 to 31-05-09) of all travel agencies  Post Flight Analysis-I calculated the percentage, average and variance of per flight and weekly usage of domestic flights from Multan

WEEK 3(FINANCE DEPARTMENT) 15

 I made entries in COSSAP (Corporate Standard Station Accounting Package ) System for refunded tickets 16-31/05/09.  They showed me the annual report of 2006.  They taught me the format of their Bank Reconciliation and showed us BR for June 1-16.  They showed me their monthly Trial Balance (Journal Voucher) of PIA Multan  They briefed me about PIA Bank Accounts (Two Types). 1) Impressed/Disbursement Account(122) 2) Collection Account (121).  1) 2) 3)

They briefed me about types of Credit(3 Types) Government Credit (APW and TAC) for army, navy and PAF. Commercial Credit Forced Credit for Agencies.

WEEK 4(IT DEPARTMENT)  Mr. Imran Afzal briefed me about the I.T operations of the PIA, that how it is connected and how operations are held.  I made computerized document for o Source 53 ( Loans & Disbursement) o Source 55 (amount adjustment/change advice)  I worked on a Computer Named DX 2000MT HP S/n SGH5070147 P/n PG984AV • Installed Softwares (Ms-Office)

WEEK 5(CARGO DEPARTMENT)  I was briefed about the cargo procedures

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    

Cargo rates Cargo handling procedures Cargo prioritizing Cargo packing (I watched them packaging goods) Cargo carriage

WEEK 6(AIRPORT OPERATIONS) Station Manager briefed me about departments working in airport  Flight Service Department  Customer Service Department  Special Handling Department  Technical Ground Service  Baggage area Service  Airport Security Force • He told us the whole working of airport traffic i.e. boarding, checking, loading, departure, arrival, unloading & load sheet making.  Post Flight Analysis (PFA)-They showed me the PFA report for yesterday’s flight. It includes the no. of passengers traveled, no. of vacant seats & no. of crew.  Baggage area Department- They deal with the loading and unloading of baggage, lost and found section of baggage and load sheet section of baggage weight.  I was allotted a security pass to enter in airport briefing/arrival area. I observed the whole operations being carried out inside the airport arrival area • Check-in • Boarding • Departure lounge 17

• Exit (Exit Gate Reader) • Also this day I observed the inside operations of airport. I observed how the load sheet is made within 20 minutes of all passengers’ check-in and flight take off. A person called “Trimmer” makes this sheet to calculate specific gravity for plane take off through weight and balance.

APPLICATION OF CLASSROOM LEARNING IN ORGANIZATION I have seen many of my classrooms learning to be applied in PIA. Of course PIA is a typical commercial organization having its hands in all the business administration disciplines i.e. marketing, finance, human resource management, information system, administration, management etc. As I got rotated in all the 6 major departments of PIA, I came to see my concepts to be applied practically there. MARKETING DEPARTMENT:  I observed aggressive market capturing techniques practiced by the travel agents there, who are at the same time competing among themselves for gaining even a single customer.  Similarly I saw the marketing officers there dealing with the ethical and unethical both kinds of tactics adopted my travel agents in their business with PIA.  There are number of possible distribution channels used by PIA viz direct (e-ticketing, counter sales, home delivery) & indirect (travel agents).  And for retaining the loyalty of their frequent buyers, PIA has established “awards plus” system for granting reward points on their flights FINANCE DEPARTMENT:

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In finance all the procedures were same as I have read and exercised in accounting & fiancé.  PIA’s annual report is updated on quarterly basis by head office  Proper budget is allocated to each PIA station by head office  There is daily bank reconciliation of PIA on its accounts which are of two types i.e. disbursement & collection account.  PIA deals with three types of credits I. Govt. credit for giving concession to govt. employees II. Commercial credit on credit cards III. Forced credit for defaulted travel agents’ topping HUMAN RESOURCE DEPARTMENT:  HR department of PIA completely coincides with the literature of HRM.  PIA is carrying out class-room, on the job, job rotation and simulative training  However there is sometimes recruiting carried out on non-merit basis  HR evaluation system is very good, few times back they were using annual confidential report method by an appointed senior but now they are using bell curve methodology.  Each and every transaction in PIA is recorded both manually and electronically through their specially developed software systems INFORMATION TECHNOLOGY DEPARTMENT:  This is not a complete department as such in PIA stations. But 2-3 IT officers work in each station  IT officers are specified to deal with any type of IT related problem. They have a very well established network of computer  PIA has bought its own anti-virus system and developed specialized software for each department i.e. SABRE,COSSAP & TMS CARGO DEPARTMENT:  In cargo I have seen highly specialized goods assortment.  Careful packaging and carriage of shipment goods 

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 There was an air of laziness in cargo department as they were dealing with non-living objects might be. AIRPORT OPERATIONS:  There was excellent time management on airport which was also the prior demnd of airport operations  Everything was so hast yet perfect and flawless. Any mistake or blunder on airport is just not acceptable and asks for penalty.  There was more of a use of sciences in flight operations. Efficient machines and efficient staff working in harmony to carry out mechanical operations.

WHATS HAS AN INTERNEE LEARNT? As an internee PIAC was a great experience for me which not only provided me an opportunity to observe difference between theory and practice. This experience also broadened my vision and confidence. As an internee I spent good time in learning and was rewarded for my best efforts, learnt to deal with different situations, had experience of organization’s working environment which affects an employee performance and attitude towards work, had good time in learning. Confidence, on time decision making, consistency, hard work, team work, seeking success out of dark, innovation, creativity, organizational survival and customer handling techniques are the key learning’s out of my job And I would like to say that it will be one of my best skill that would remain with me and help me in the coming life which offer many challenges. The behavior of a government organization is totally different when it comes to profitability and existence. I learnt the deeprooted causes of PIA’s financial losses. Its main reason is the government obligations on its flight schedules which are un-profitable 20

for the company and the un-necessary government intervention in its ownership and operations. It seems that whatever PIA is earning it is just sufficient for fulfilling the demands of PIA’s owners. I would like to highlight this, that my experience with PIA was very memorable and full of learning’s, where I found a lot of positive changes in my attitude, learning and behavior

SWOT ANALYSIS STRENGTHS Only national airline and the only flag carrier airline of Pakistan Measurable well defined goals and objectives  Provided services for Hajj and Umrah  People oriented organization  Govt. sponsored/protected organization  Direct access to the destinations  Monopoly in the domestic routes with highest market share in domestic routes  Booking Offices in all major cities both at domestic and Int. 

 Electronic ticketing by web and through SMS

WEAKNESSES  Lack of professionalism 21

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Low level of commitment for the organization

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High fares as compared to other airlines

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The upper management not belongs to the airline

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Sometimes much Govt intervention

 Promotion on seniority basis  Weak rewards and appraisal  Less effort in the field of marketing  Poor quality of food/service on board specially in domestic flights  Old aging fleet of PIA causing higher operating cost. 

Over recruitment

OPPORTUNITIES 

PIA has 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

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

PEST ANALYSIS

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The macro-environment includes all factors influencing a company that are not within its control. These include political, social, economic and technological factors. These are known as PEST factors. A technique of analysis of the macro environment is PEST analysis. Environmental analysis should be continuous arid precede all aspects of planning. Since the airline industry is very much influenced by changes taking place in the environment and has undergone rapid and dramatic changes during the last decade, this analysis is especially important for PIA. i)

POLITICAL FACTORS: Political factors always have a great

influence on the way businesses operate in the airline industry and the spending power of customers. In recent years it has been observed that government played an active role in increasing competition in the airline industry. A number of new airlines such as AirBlue and JS Air have been awarded licenses to enter the domestic market. Pakistan has achieved some political stability in recent years. If the management of PIA believes that the present government will perform well (consistently), then there will be more investment in the form of purchase of new airplanes and latest technology. The over all industry will grow resulting in more luxurious and comfortable flights. With the military takeover government policies have become more liberal. 24

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ECONOMIC FACTORS: Currently, Airlines industry has three

major players: Pakistan International Airlines, an Airblue, Aero Asia and Shaheen Airlines. Their target market includes domestic travelers as well as Pakistanis living abroad particularly in the UK and USA. These countries have strong economies coupled with high purchasing power. Customers’ purchase behavior depends very much on prices of the competing airlines as well as services offered. As inflation rate is unstable in Pakistan, spending power of consumers has effected in the long term. In fact growth in Pakistani economy has resulted in an increase in spending power and has positively impacted the airline industry. Economically, the new millennium has been highly volatile; the September 11 attacks revolutionized the whole world. Consequently, there was a global depression in the North America, South America, Australia and Europe. However, in Asia especially Pakistan the effect in the short term was otherwise. The economy began to boom because of greater remittances from abroad and whole sum immigration by expatriates. As a result, demand for air travel in South Asia rose. Economic conditions of Pakistan are however improving. PIA has cost a advantage over its competitors because of its newly acquired, improved, long distance aircrafts from Boeing’ which give longer range and better

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fuel economy than any other jet currently produced. This cost advantage is a barrier to entry for new firms. However, this cost advantage will not be significant on domestic routes.

iii)

SOCIAL FACTORS: The social arid cultural influences on

business vary from country to country. The social structure of Pakistan is closely tied. The trend is now changing as the general public is educated and is pursuing professional goals. Customers are more aware of market conditions and available options and want to get best value for their money. They spend considerable time and money on entertainment hence increasing the need of in-flight entertainment systems. Also, word of mouth has a significant impact in the use of airline services. Hajj attracts a huge number of customers. The social environment of Pakistan is turning liberal with the new regime. The initiative to automate check-in and ticket booking process might not be very popular with the general public (even educated population) is still technology averse. E-ticketing might also face significant challenges as consumers are generally reluctant to provide their credit cards information over the phone and the internet. The consumers, however, have a warm reaction to the prospect of less costly but quality service flights.

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vi) TECHNOLOGICAL FACTORS: Technology is vital for competitive advantage and is a major driver of the airlines industry. Major technological changes are taking place in the airlines industry with innovations in the reservations and booking systems. In-flight entertainment systems and auto check in counters are two examples of such innovations. Internet plays a key role in e-ticketing as consumer can easily reserve tickets or check the status of the flight. A key issue will be the extent, to which technological advancements (such as Internet) impact distribution and cost synergies from industry consolidation, can offset upward pressures on costs. PIA has always led the path of technological innovations by introducing new technologies ahead of its competitors such as its auto check-in counters which has helped it gain market share. It was the first airline in Pakistan to install Sabre system followed by the market leader.

SUGGESTIONS

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I would like to give certain suggestions for PIA’s 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 to work harder. 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 it’s 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. Airline should focus on the customer’s satisfaction, refund process should be quick so that customer remains loyal to brand. 5. PIA should not induct new employees till the time they are needed because PIA is suffering from over manpower. 6. PIA should give bonus/promotions to the competent employees as there is clear cut lack of motivation among its employess. 7. 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.

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8. 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. Management should hire the services of specialized IT personnel for their system development and up gradation on time. 10. There should be clear and even distribution of work and only qualified person should be appointed on jobs. 11. There should be improved service standards and that should focus on quality. 12. 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. 13. PIA should give more incentives to its frequent flyer as it will generate more brand loyalty by giving better incentives to the customers.

IF YOU WERE MANAGER THERE If I were a manager in PIA.I would have tried and make many promising changes in the organization, some of them are as follows:1. I would first of all bring new and energetic blood to the workforce of PIA. 2. I would have asked financial assistance from institutions and contract with foreign airlines to upgrade existing fleet of PIA, as 29

well as buy new fleet of international standards, this beginning investment would definitely turn into a long-term gain for PIA. 3. I would make the pay scale for the most important staff of PIA i.e. pilots, air hostesses, marketing heads, so much competitive that they won’t drain their skills from PIA by switching to other organizations. 4. I would arrange most efficient training program for PIA representative staff. 5. I would try and uproot the hard-woven practices of a common government organization’s legacy such that absenteeism, free riding, laziness, corruption, family line promotions etc.

CONTACT INFORMATION OF MY SUPERVISORS IN EACH DEPARTMENT HR Department, Abdali Road, MULTAN. Supervisor : Mr. Kaleem Siddiqui Sr. Personnel officer 0300-6309629 Marketing Department, Abdali Road, Multan. Supervisor: Mr. Nadeem Sheikh Sales promotion officer 03017506776 Finance Department, Abdali Road,Multan Supervisor:Mr. Firasat Ali Qureshi. Assistant Manager Finance 30

IT Department, Pakistan International Airport Multan Supervisor: Mr. Imran Afzal. Computer Network Engineer Ph 03219422452 Cargo department, Abdali Road Multan. Supervisor: Mohammed Zarif Senior Cargo Officer Phone: 9200626, 03013669246 Airport Operations P.I.A Multan Airport Supervisor: Nadeem Murtaza Khan Station Manager Multan Ph: 03327196990

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