PIA losses surged to Rs103b during PML-N tenure

PAC terms national flag carrier’s woeful state to bad managerial decisions

ISLAMABAD: Pakistan International Airlines (PIA), which posted a Rs2 billion profit way back in 2004, has seen its losses surge to Rs103 billion during the tenure of the current Pakistan Muslim League-Nawaz (PML-N) regime.

PAC Chairman Syed Khurshid Shah chaired the meeting on Tuesday convened to discuss the performance of PIA and the Civil Aviation Authority (CAA). PIA’s CFO Nayyar Hayat along with other representatives briefed the members of the committee.



Shah and those present in the meeting expressed their awe when they were told that the national flag carrier has been incurring losses since 2005 which they attributed to bad managerial decisions.

The year-on-year loss figures given to the PAC stated that: in 2005, the losses were Rs4.4 billion that kept increasing over the years. And in 2013 – the first year of the PML-N government – the losses surged to Rs44.71 billion; Rs29.31 billion in 2014, while in 2015, it incurred a loss of Rs29.95 billion.



“Why is it running in losses?” asked Shah, and gave the answer himself, “Because PIA had sold out its routes to other airlines.”

Shah also asked: “Why was PIA lamenting only about the losses and not mentioning the savings of Rs25 billion that it had earned between 2012 and 2016 on account of low oil prices?”

“When I was the minister of religious affairs in 1996, the Hajj fare was Rs14,000 while it was Rs34,000 in 2012 when oil was about $84 per barrel. However, currently Rs56,000 were being charged from each pilgrim when oil prices were less than $50 per barrel.”

“Audit officials should sit with the PIA management and sort out a solution to the issue,” he suggested.



Responding to a question of MNA Sardar Ashiq Hussain Gopang, CFO Hayat stated that PIA had a fleet of 46 aircraft in 2005 – the first year of its losses after making a profit. That number came down to 27, he said, adding today the airline has 39 aircraft.

In addition, PIA also operates five ATRs but they are unsuitable for flights to high altitude areas like Gilgit and Skardu, the PAC was told.

Shah responded that those aircraft were also turning out to be a financial as well as a technical loss to the airline. A PIA official stated that since 2014 those aircraft have incurred a loss of Rs2.25 billion to PIA.

CAA Secretary Sqn Ldr (retd) Muhammad Irfan Elahi told the PAC that a new airline – Serene Air – has been granted a licence to begin operations along domestic routes by the end of 2016.

MQM MNA Rashid Godil suggested that PIA should discard the practice of serving meal on domestic routes and instead offer discount to its customers.

To this, the PIA CFO replied that the airline was starting a joint venture with some private firm(s) for catering services because it was costing Rs2.5 billion per year which was 2.75% of the PIA’s sales.

Shah stated that the finance ministry should be asked to pay interest of PIA which is Rs40 billion annually, adding “I will also meet the prime minister in this regard”.

Earlier, the committee took exception to the absence of PIA’s Chairman Muhammad Azam Saigol, who reportedly excused himself from the meeting, saying he had to appear in the LHC in another case.

The committee, however, said that it would probe the claim to know whether the chairman had willingly skipped the meeting or he had some genuine reasons.

Published in The Express Tribune, October 26^th, 2016.