Editorial

Saddled with liabilities

But to be fair to PIA, it is not the only carrier in the world that finds itself floundering

Editorial February 17, 2020

The national flag carrier is no stranger to taking flak for loss-making and all sorts of operational ills from politicians, aviation analysts and the public at large. But to be fair to the Pakistan International Airlines (PIA), it is not the only carrier in the world that finds itself floundering. A closer look at the global aviation industry reveals that profitable airlines are few and far between, so the censure to which PIA is often subjected, is sometimes off the mark. Like many airlines, which have a hard time riding out the ill-effects of a steep drop in air passenger demand following 9/11, PIA perpetually stays in the red.

But this does not mean its top brass should stop aiming to fly high, no matter how formidable the odds. Trying to cut unnecessary costs and the employee bulge is the perfect starting point. Pursuing a professionally crafted business plan can then begin making the difference. But as things stand today, there is no escape from plummeting profits and soaring liabilities, as a recent report in this paper illustrates. The airline added Rs75 billion to its total liabilities in the first six months of calendar year 2019, observes the report.

The national flag carrier had accumulated liabilities of Rs558 billion as on June 30, 2019 against Rs483 billion as of December 31, 2018. However, in dollar terms, the losses remained nearly stagnant as PIA reported a nominal increase in liabilities to $3.49 billion in the period under review compared to $3.48 billion as of December 31, 2018. A PIA spokesman puts this down to foreign exchange losses. Stats speak for themselves: In the six months ended June 30, 2019, the airline reported net exchange losses of Rs14.6 billion against Rs5.8 billion in the corresponding period of previous year.

Published in The Express Tribune, February 17^th, 2020.

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