Saturday, August 30, 2008
By Saad Hasan

KARACHI: Pakistan International Airlines (PIA) on Friday announced half-year losses of Rs17.9 billion, deepening the financial woes of an already cash-strapped and overstaffed airline.

Loss during January-June 2008 increased 133 per cent over the same period of last year, mainly because of the provisioning of Rs8.5 billion in the second quarter. PIA’s financial year ends in December.

The results released to the Karachi Stock Exchange (KSE) did not specify on what account the provisions and adjustments have been made. But a top official confirmed that some part of that is reflecting on-book cost of disputes that the airline is involved in.

“PIA is involved in some disputes which the past management had not shown as a liability,” said Managing Director Aijaz Haroon. “We wanted to make the balance sheet clear and hence have made provisions for Rs1.5 billion.”

He expressed concern over the fast depreciation in the value of the rupee, saying that the government must act before it is too late. “If it stays like this, not only PIA but many organisations will take a hit.”

The rupee has lost 24 per cent against the dollar this year, following a substantial decrease in foreign exchange reserves, part of which has been swallowed by the oil import bill.

About the losses suffered by PIA, he insisted, debt servicing against loans was the main cause. “Cost of financing due to accumulated losses has increased substantially. The government has to do something about these accumulated losses.”

Haroon expressed satisfaction over the performance of the airline, saying it would have done pretty well financially if it wasn’t for the financing cost and depreciation of the rupee.

During the period under review, when most international airlines have seen a drop in business, PIA’s revenue jumped to Rs37 billion from Rs34 billion. But the impact of better sales was nullified by a 39 per cent rise in fuel cost.

The airline in its official communique said the steep rise in the fuel bill has been the major factor behind the losses, as this could not be passed on to passengers in the shape of higher ticket prices due to market conditions.

PIA has accumulated losses far exceeding its annual revenue. High employee to aircraft ratio, political interference and workers’ strikes have all led to a slide in the performance and financial position of the airline.



http://thenews.jang.com.pk/daily_detail.asp?id=132695

This failed airline should be privatised.
It's been mismanaged for years.

What i believe is that a lifeline is being provided by expats by flying PIA at least they can show their discontent by completely boycotting the airline and hurt them more deeply so they are forced to remove the scumbags in the airline or privatise it.

If you want PIA to go down and out completely, then we should ask all Hajis during Haj season to take another airline on their way to Saudi Arabia. Thats the only route in a year where PIA makes money.

What a drain on Pakistan's taxpayer's money.

Should be. But with transparency. Not like steel mill. AKF is very much interested in buying PIA.

LOL this is the third year we are repeating the very same thing. I guess no body cares and have we ever wonder how much we can get out of those billions being wasted. We could provide subsidy on food for our ppl rather than filling hte pockets of PIA fat A$$..

So now it seems we will cross Rs 35 billion rupee mark. Even if we dump the air line altogther right now it would be a wise decision for Pakistani tax payers but than again how will the MPs have their brothers and sisters as head or manager on pia.

What transparency, we are forking out hundred of millions of dollars and over the alst three years Pakistani tax payers have forked out $1+ from their pockets to run this piece of junk.

Even if we give it for free it would be a great thng for tax payers, at least we will be saving half a billion each year.

airline bizness is probably the most toughest bizness to manage and run these dayz..with rising fuel costs,increase in the number of private budget airlines (easy jet etc) and customers demanding more ,i wonder whether PIA can compete and yet maintain steady profits.
the way privatization is done in pakistan, and the way our govt appoints CEO's and chairman's on a your-my-buddy basis, pia ka allah hafiz

PIA decides mortgaging its two hotels with Govt.

Pakistan International Airlines (PIA) has decided mortgaging its two hotels at New York and Paris with the government of Pakistan for an amount of Rs 50 billion.

Talking to Geo news PIA Managing Director, Ijaz Haroon said that the management has decided to mortgage the two PIA hotels at New York and Paris with the government of Pakistan for surmounting the losses to the organization. PIA Board of Directors has already approved of the proposal.

PIA M.D. informed about new business plan that the amount accruing from the mortgage would be spent on adding 30 new aircrafts into the PIA fleet during 2009 to 2011, while new flights would be started for Barcelona, Seoul, Madina Manuwwara and other countries.

To a question he said that this decision has been taken for overcoming the losses and the government should cooperate with PIA in this regard.

4,500 contractual PIA employees regularised

The process of regularising 4,500 contractual employees of the Pakistan International Airlines (PIA) started with the distribution of regular appointment letters among them by Sindh Chief Minister Qaim Ali Shah.

The letters were distributed amidst slogans of “Jeay Bhutto” (long live Bhutto) and “Jeay Benazir” (long live Benazir) at a function held at the PIA Staff Colony Shah said that the Pakistan People’s Party (PPP) had fulfilled its promise of regularising PIA employees by August 30. He also announced that employees of other organizations who had been waiting for the last 18 years would also be regularized. The CM further said that the government was committed to regularising Goths and Katchi Abadies, and said that promises in this regard would also be fulfilled.

My question to pro-"economic was doing well in Mush time" is, how the hell a potential money maker PIA did not get out of gutter in 9 years????????

I also want you guys make a note of the fact that PIA pricing is not and no where close to competitive considering.


Also stupid management doesnt get to their head that if they cant get through "less volume, big price" approach then they can go "low price, high volume". My brother-in-law travels to pakistan every 4 to 5 months. And according to him he has rarely found the pia plane to be filled, or at least to have decent number of people. He is a businessman and doesnt know how the hell PIA is running toronto-lahore line.

I came to canada in 98. there were so many seats empty that it was freaking hilarious. I was not picking a seat to sit, I had a choice to pick a row where i could lay down so i could watch the main screen and smoke while being hidden from my relatives eyes.

PIA constantly ignores its customer demands. I have seen many people not going to pakistan cause all the ticket price for the trip means they have to save for years and then go back.

oh by the way good luck trying to find a quote over internet.

There were quite a few institutions that Mushy failed to turnaround during his years. WAPDA is another example.

PIA's current debt is about US $ 1 Billion, and has made a loss of almost US $ 1 Bil.
CAA, Shell/PSO, and foreign CAA's, catering, Boeing/Airbus/ATR for spares, the list goes on (debt).

Also PIA had been in negotiations with Airbus to purchase new A-320's, to replace the old B-737's.
They still haven't announced it, but the negotiation stage is done with, announcement any day of the A-320's now.

PIA to buy fuel-efficient planes http://dawn.com/2008/09/16/nat41.htm
By Our Staff Reporter

LAHORE, Sept 15: The Pakistan International Airlines (PIA) is procuring fuel-efficient planes after disposing of the ones that have outlived their operational life.

PIA Managing Director Capt Ijaz Haroon said this while talking to reporters here on Monday. He said the loss of the national airline was Rs54 billion and it had asked the federal government to have the ownership of its (PIA) assets, especially its hotels in New York and Paris whose value was about $1 billion. Through this the PIA could come out of the financial crunch it had been facing, he added.

Capt Ijaz said that Rs1.5 billion which PIA owed to the Civil Aviation Authority was disputed one and would be settled with it.

They need to sell off their non-core businesses, and then privatize PIA itself.