A new study on the country’s civil aviation sector disclosed that Pakistan’s civil aviation sector has doubled passenger traffic over two decades but faces structural challenges, rising Gulf airline dominance, and urgent need for reforms, PIA privatisation, and airport modernization.
The Competition Commission of Pakistan (CCP) has released a comprehensive market study which revelaed Pakistan’s civil aviation sector had doubled passenger traffic over two decades but faces structural challenges, rising Gulf airline dominance, and urgent need for reforms, PIA privatisation, and airport modernization.
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Highlighting critical challenges in Pakistan’s civil aviation sector and calling for structural reforms to boost competitiveness and sustainability, SECP’s study report said Pakistan’s aviation industry has served over 340 million passengers in the past 20 years, with annual passenger numbers increasing from 12.8 million in 2006–07 to 24.3 million in 2024–25. While international travel has grown significantly, domestic air travel has remained largely stagnant, pointing to an imbalance in market development.
The study identifies several key challenges: regulatory fragmentation, inconsistent policies, governance gaps, and rising reliance on financially strong Gulf-based carriers that dominate international passenger traffic. Domestic airlines, including PIA, Air Blue, Air Sial, Serene Air, and Fly Jinnah, face structural disadvantages such as high taxes, thin profit margins, fleet limitations, and currency volatility. PIA’s market share has dropped sharply from 61% to 29% domestically and from 28% to 15% internationally, despite overall sector growth.
The CCP report recommends urgent reforms, including the introduction of a national civil aviation roadmap, modernization of Karachi and Lahore airports, development of secondary airports in Gilgit and Skardu, and greater participation of low-cost carriers, local MROs, and SMEs. It emphasizes ensuring competitive neutrality, transparent market entry, and reducing reliance on foreign carriers.
Privatisation of PIA and outsourcing of airport operations are also highlighted as key measures, but the report warns that without strategic oversight, these initiatives could reduce national control over critical infrastructure. Stakeholders stress the importance of unifying regulatory frameworks, streamlining slot allocations, modernizing financial instruments, and adopting sustainable aviation practices such as ESG compliance and sustainable aviation fuels (SAF).
The CCP draft report has been released for public consultation on its website, with the final version expected to guide policy decisions aimed at revitalizing Pakistan’s civil aviation sector.
Experts say that if implemented effectively, these reforms could restore domestic carriers’ competitiveness, improve consumer choice, and strengthen Pakistan’s position in regional and international aviation markets.
