Partnering PIA with Pakistan's private airlines.

The domestic aviation industry in Pakistan is in a weak position, thanks to the Pakistani governments "protective" policies of PIA, only crippling the growth of the other airlines; hence the rest of the Pakistani aviation industry.

The problem is that PIA and it's owner the Pakistani Civil Aviation Authority (CAA) fear the growing competition only contributing to PIA's losses. PIA suffers grossly from competition both internationally and domestically.

On the international front, the Pakistani CAA has been trying to limit the Gulf airliners by denying certain operations such as refusing Emirates a special terminal to accommodate their Airbus 380s.
There have also been plans to impose taxations on passengers who fly to Europe and North America from Pakistan by transiting through the Gulf, though I'm not sure if it was ever imposed.

Recently PIA planned on code sharing some of their European and North American routes with Turkish Airlines (THY). This resulted in a strike by PIA employees who claimed that these were profitable routes being given over to THY.

I think the best solution to PIA competition is to partner PIA with Pakistan's domestic airlines instead of foreign airlines. For example, if PIA planes are caught in an international flight and are scheduled to be used domestically or the international flight is entering Pakistan to fly between two domestic routes but cannot make it in time, the route can be operated by a domestic airline on PIA's behalf.

Even on international routes such as Manchester if PIA wants to cut down flights to save operating costs, the CAA should let Airblue do the route on PIA's behalf so both airlines can profit.
Even domestically since PIA has a limited number of 737-300s and uses Airbus 310s, it could perhaps divert these Airbus 310s abroad and allow Airblue, Shaheen Air or some other airline to do the domestic route on PIA's behalf.

Perhaps these specific ideas are not profitable, but some sort of partnership between PIA and Pakistan's private airlines might actually help reduce international competition and boost the Pakistani aviation industry. Such an idea definitely deserves to be explored in a bid to grow the Pakistani aviation market.