The Competition Commission of Pakistan on Monday called for a comprehensive structural reset of Pakistan’s civil aviation sector, warning that the industry “cannot be governed in silos.” The findings were released in the report “Competition in the Skies: Pakistan’s Civil Aviation Market Assessment,” which reviewed nearly two decades of data from 2006 to 2025 and incorporated extensive stakeholder consultations.
The study showed that the sector has served almost 340 million passengers during this period, with annual traffic rising from 12.8 million in 2006–07 to 24.3 million in 2024–25, an increase of 89%. The overall compound annual growth rate stood at approximately 3.42%, but this expansion was almost entirely driven by international traffic, which grew at about 5.46% CAGR, while domestic passenger volumes remained virtually stagnant at 0.19% CAGR. The CCP noted that while overall passenger numbers have increased, the sector’s competitive strength and structural depth have lagged behind, falling short of Pakistan’s population growth and economic potential.
The report concluded that Pakistan lacks a unified national aviation vision and continues to treat civil aviation more as an administrative function than a strategic economic sector. Governance remains fragmented, policy is inconsistent across regulatory, fiscal, and financial institutions, and domestic growth has been weak compared with international traffic. Frequent airline exits, financial fragility among local carriers, underutilisation of airports, and increasing dependence on Gulf-based airlines have left the sector vulnerable. Competitive asymmetries are further exacerbated by regional macroeconomic differences and the presence of state-backed foreign players.
The CCP highlighted the economic importance of civil aviation for trade, mobility, and connectivity, noting that regional tensions and restricted airspace around Pakistan and nearby hubs further underline the country’s reliance on foreign carriers. To address these challenges, the report calls for a National Civil Aviation Roadmap and a phased long-term Reform and Stabilization Plan to create a resilient, investment-ready ecosystem that integrates air travel, tourism, financing, and commercial services.
The study stressed the need for regulatory clarity, competitive neutrality, financial sustainability, and strategic policy coordination. It recommended modernising key airports including Karachi and Lahore, improving secondary hubs such as Skardu and Gilgit, implementing e-gates and digital slot allocation, creating a unified aviation data hub, and adopting real-time reconciliation through IBMS. It also suggested introducing aviation- and tourism-specific financing and insurance, predictable foreign exchange and fee policies, tax rationalisation, and self-sustaining airport commercial operations with strategic private participation. The report further emphasised promoting low-cost carriers, encouraging SME participation and ancillary services, developing local MRO capabilities, building domestic capacity, and engaging in evidence-based bilateral arrangements.
The CCP warned that historical privileges should be reassessed, market entry must remain open, and strategic oversight of critical aviation assets must be maintained. Implementing these reforms, the report said, would transition Pakistan’s civil aviation sector from a focus on volume growth to a structurally resilient, competition-driven, and investment-friendly industry, reducing overreliance on foreign carriers and strengthening the domestic aviation ecosystem.
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