What is AirSial?
AirSial is a startup airline, formed by the local business community of Sialkot, a city in northern Pakistan. The goal of this airline is to boost passenger traffic within, to, and from Pakistan and help in streamlining the exports from Sialkot.
The city is famous for exports, it already has a dry port and an international airport all set up by the business community itself. The airline is under the Sialkot Chamber of Commerce and Industry, which has a capital expenditure of USD 20 Million. According to the Chamber of Commerce and Industry, AirSial secured an RPT License from the Pakistan Civil Aviation Authority in October of 2017.
The airline had been in the pipeline from way before. Talks of an airline based out of Sialkot were in the air as early as 2014, but the only substantial step came in 2017. In Pakistan, securing an RPT license does not mean that a tangible airline is ready to launch, so AirSial still had skeptics when it got its RPT.
If you’re wondering what RPT is, RPT stands for “Regular Public Transport”. It’s a license issued by the Director-General of the Pakistan Civil Aviation Authority with the approval of the Federal Government for carriage of passengers and cargo services. After AirSial got its RPT License in 2017, the next proper step came in late 2019, when it signed an agreement with AerCap, an aircraft lessor, for the dry lease of 3 Airbus A320-200 aircraft. The stakeholders of the airline said that they would be launching in the Holy Month of Ramadan in 2020.
Well 2020 was not exactly a year which was fond of aviation. We all know what happened. Airlines started going bankrupt left and right, others were facing issues, the aviation industry hit a historic low.
With all that going on, AirSial still managed to launch its services on the 25th of December, 2020, with a flight from Karachi to Islamabad, which was fully loaded. The services continue to operate, with a decent load on every flight. As of now the regular scheduled flights of AirSial are on the Karachi-Islamabad sector and Karachi-Lahore sector.
There are also twice a week flights between Karachi and Sialkot, whilst twice a week service from Karachi to Peshawar is planned to start from the 11th of May this year. The airline has proved to be very popular due to its highly competitive pricing and overall good and timely service. All of that is a separate topic.
How is AirSial Set for Success?
To gauge the future of AirSial and whether it will be successful or not, we can only look at the present state of the airline, available information about their future plans, and all the factors that play into the hands of AirSial in light of the global pandemic. We will now list some of the points which set AirSial for success.
1. AirSial’s easy entry into the domestic market.
To start, there is a fact that we cannot ignore and a fact that plays right into the hands of AirSial. The airline is not making an entry into a very competitive market. In fact, AirSial is filling a vacuum, which was left by the sad demise of Shaheen Air. So AirSial, at the moment, raises the overall bar of competition for AirBlue, Serene Air, and Pakistan International Airlines, but, it does not face tough competition itself. The scenario for AirSial would have been very different if Shaheen Air was still in play. So looking at it from this angle, AirSial will not be stepped upon by another airline for the foreseeable future.
Read More: The Rise and Demise of Shaheen Air
2. Revised Aviation Policy of 2021.
For any new airline to commence international passenger and cargo operations, the Pakistan Civil Aviation Authority required it to complete a minimum of 1 year of domestic operations, and only then was it eligible for approval of international operations. However, this policy has been updated, and now the requirement is a mere 6 months of domestic operations.
This, according to the CAA, is to “facilitate new airlines under the Aviation Policy 2021 to allow operating international flights”. In the present landscape, the only new airline is AirSial. It can take full benefit of this, and launch international operations even before 2021 ends.
3. Low aircraft lease rates
AirSial acquired the A320’s in the pre-pandemic era. And it was a challenge, as Airbus A320’s were in extremely high demand. Due to grounding of the 737MAX, the overall repute of the 737 was hurt, and hence, sales and lease of Airbus A320’s shot up to space. In that period, AirSial managed to secure three relatively aged A320’s.
But, after what happened in 2020, aircraft lease rates have fallen drastically. For the future, AirSial can get good deals on newer aircraft. It is now confirmed that they will be going for Airbus A330’s and possibly A330 Freighters. Capitalizing on the present state of the lease market, they can get younger aircraft, for prices which were not imaginable in 2019.
The resultant drop in demand for leased aircraft means that both narrowbody and widebody lease rates are probably down by close to 30%, or even more for new aircraft, and by at least 50% for 747-800s and A380s (source: Aviation Strategy, May/Jun 2020 issue).
These are discounts that are hard to ignore. Let’s see how it plays out for AirSial, but this factor certainly plays in its favor.
4. Industry experienced professionals from the un-employed pool.
As mentioned earlier, AirSial’s entry into the market was easy, primarily due to Shaheen Air going down. As an extension of that, Shaheen Air, when it went bankrupt, left pilots, engineers, cabin crew, ramp agents, and several other aviation workers unemployed, with limited options. AirSial from the get-go, recruited from this pool of already trained, licensed professionals. But it didn’t stop here.
The COVID-19 crisis also meant, several Pakistani aviation professionals, working in airlines like Emirates, Qatar and Etihad were made redundant, and they also found their place in AirSial. Hence, AirSial now has a team that not only is experienced but also has all the training and licenses. This is huge because airlines have to spend a lot on the training of new staff. AirSial on the other hand got all of this manpower practically for free. The maximum they had to do was go for renewals or currencies.
With the above mentioned factors, the only thing that can stop AirSial from succeeding is AirSial itself. Almost all external elements are in favor of its success. As of now, it has been four months of operations for the still, infant airline. But it is definitely set up for success. What do you think? Please write your thoughts in the comments.