ISLAMABAD:

The Competition Commission of Pakistan (CCP) has released the draft of the report titled “Competition in the Skies: Pakistan’s Civil Aviation Market Assessment,” an evidence-based, competition assessment study of the civil aviation sector, which covers nearly two decades of data (2006-2025) along with stakeholder consultation.

Over the review period, Pakistan’s civil aviation sector served nearly 340 million passengers, with annual traffic rising from 12.8 million in 2006-07 to 24.3 million in 2024-25 – an 89% increase. This translates into a moderate overall compound annual growth rate (CAGR) of 3.42% over 19 years.

However, the growth was driven almost entirely by the international segment (CAGR 5.46%) while domestic traffic remained nearly stagnant (CAGR 0.19%). Overall, while passenger volumes have expanded, the sector’s structural depth and competitive strength have not kept pace, particularly when measured against Pakistan’s population growth and long-term economic potential.

The report concludes that Pakistan has lacked a unified national aviation vision to treat civil aviation as a strategic economic sector rather than an administrative function. “Civil aviation cannot be governed in silos,” the CCP remarked.

The study highlights structural gaps, including the absence of an integrated national aviation strategy, fragmented governance and policy inconsistency across regulatory, fiscal and financial institutions, domestic market stagnation relative to international growth, frequent airline exits and financial fragility among local carriers, weak aviation-specific financing frameworks, underutilisation of airports, increasing reliance on Gulf-based carriers and competitive asymmetry arising from differences in regional macroeconomic factors as well as domestic and foreign state-backed players.

It stresses that civil aviation is critical for economic connectivity, trade and mobility, yet regional tensions and restricted airspace in the country and nearby hubs highlight Pakistan’s vulnerability. This further underscores the need for a strategically strong and self-reliant domestic civil aviation sector rather than overdependence on foreign carriers.

The study calls for a national civil aviation roadmap and a long-term, phased reform and stabilisation plan to build a resilient, investment-ready ecosystem, integrating air travel, tourism, financing and commercial services, while ensuring regulatory clarity, competitive neutrality, financial sustainability and strategic policy coordination.

Key priorities include modernisation of Karachi and Lahore terminals, secondary airports (Skardu, Gilgit), e-gates, digital slot allocation, a unified aviation data hub and real-time IBMS reconciliation, guided by demand-based, fiscally prudent planning.

The report also recommends aviation- and tourism-specific financing and insurance, predictable forex and fee policies, tax rationalisation, self-sustaining airport commercial operations with strategic private participation, evidence-based bilateral engagement, domestic capacity building, low-cost carrier promotion, SME participation and ancillary services to restore competitive balance and strengthen the domestic aviation ecosystem.