Client Name

Aircraft Sales & Services (Pvt.) Limited (ASSL Air)

Faculty Advisor

Dr. Saqib Sharif

SBS Thought Leadership Areas

Entrepreneurship and Innovation

SBS Thought Leadership Area Justification

Under the Institute of Business Administration's (IBA) School of Business Studies (SBS) framework, the main thought-leadership area for this project is Entrepreneurship and Innovation. At its heart, Air Chalo is the launch of a brand-new venture into a part of the market that the existing operators have consistently ignored, and the main output of the project, which is the Business Plan, is the classic example of what an entrepreneurial feasibility study produces. We see the innovation here as being twofold. Firstly, it comes from applying turboprop fleet economics to Pakistan's domestic market in a way that has not really been done before. This matters because every scheduled carrier that currently operates uses a single type of aircraft, a roughly 180-seat narrow-body jet, whose break-even requirements force it back onto dense trunk routes. Secondly, it comes from the way we select routes, which is driven by data. Instead of picking routes based on intuition, we build our own flight dataset along with a bus-substitution analysis to identify and prioritise corridors based on actual evidence. The way this project adds to the field is by showing how a charter operator's existing strengths, namely its experience with turboprops, and its existing maintenance base, can be reused as the platform from which to launch a scheduled commuter venture.

The secondary area, under the same IBA SBS framework, is Investment Decision-Making. Taken together, the buy-versus-lease analysis and the capital-structure framework make up a real investment decision, one that has clear net-present-value, capital-expenditure, and risk-transfer dimensions to it. The question of whether to own the aircraft outright or to lease them is not just a small financing detail. It is a strategic decision that affects the venture's balance-sheet risk, how exposed it is to dollar-denominated obligations, and how easily it can exit a route that is not making money. The way this project adds to the field is by applying a marginal-cost, step-function logic to a real capital-allocation problem. In other words, we treat each additional aircraft as its own separate investment that has to be justified on its own returns, rather than measuring it against a cost base that scales up smoothly.

Aligned SDGs

GOAL 8: Decent Work and Economic Growth

Aligned SDGs Justification

The Sustainable Development Goals that this project works towards are SDG 8 (Decent Work and Economic Growth) and SDG 10 (Reduced Inequalities). SDG 8 is about promoting economic growth that is sustained, inclusive, and sustainable, along with full and productive employment, decent work for all, and higher economic productivity through diversification and innovation. SDG 10, on the other hand, is about reducing inequality within a country, and one of the ways it aims to do this is by including everyone regardless of where they live. We believe Air Chalo contributes to these goals on two fronts. First, it creates direct skilled jobs such as pilots, cabin crew, licensed engineers, and ground staff. In doing so, it builds on the role that aviation already plays as a major source of employment and a contributor to GDP in Pakistan, where the sector currently supports around 684,000 jobs and close to 1.7% of the country's output. 

Second, and this is the more important point for the idea behind the venture, it raises economic productivity in the secondary and tertiary cities of Pakistan and helps reduce the inequality between them and the major hubs. It does this by removing the travel friction that is holding back commerce at the moment. For example, direct connectivity between industrial centres such as Sialkot (sporting, surgical, and leather exports), Faisalabad (textiles), and Multan (agribusiness) would make same-day business travel possible, which is something the incumbents cannot support. As a result, firms in these regions would be able to do business, supply their goods, and grow in ways that the current primary-hub network does not allow. In short, Air Chalo would give these peripheral regions the same kind of mobility advantage that is currently only available on the primary corridors. In doing so, it would help narrow a spatial inequality that has effectively been built into the country's transport geography.

NDA

No

Abstract

Pakistan's domestic aviation sector is dominated by narrow-body jets on trunk routes between three major cities, leaving secondary city corridors structurally underserved. This project assesses whether Aircraft Sales & Services (Pvt.) Limited (ASSL) can profitably enter this gap with a turboprop commuter airline on short sectors under 800 km. Per the Terms of Reference, the team pursued three objectives: assessing commercial, operational, and financial feasibility; designing a capital acquisition strategy; and developing a dynamic pricing framework to optimise seat yield.

The study employs a mixed-methods, sequential-explanatory design across six independently developed workstreams. With no published origin-destination database for Pakistan's domestic routes, two primary databases were built from scratch: a National Flight Database compiled from flight tracking and booking platforms, and a Bus Substitution Database of 250-plus route-operator records. Focus groups validated demand and brand perceptions, and quantitative outputs fed a ground-up financial model and Python-based pricing engine.

Results validate the business case. Sixteen of 22 civil airfields are under-utilised, no scheduled turboprop service exists on secondary corridors, and 15,964 premium bus passengers travel these corridors daily without an air alternative. Two unserved circuits passed all gate filters. Operating lease dominates purchase across all scenarios: USD 3.7 million lower five-year cost and USD 405,000 day-one outlay versus USD 17 million. The model shows a planned Year 1 loss reversing to positive PBT in Year 2, with cumulative retained earnings of Rs 418 million by Year 5. The report recommends immediate AOC amendment, a Karachi-based two-circuit launch, and conditional expansion through Year 3.

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

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