PIA losses swell 28%

Pakistan International Airlines (PIA) reported a loss of Rs6.9 billion for the first half of this year, according to a notification sent by the airline to the Karachi Stock Exchange (KSE).

The figure shows an increase of almost 28 per cent when compared with the loss recorded during the first half of last year.

The income figures for this year translate into negative earnings per share of Rs2.86, compared with the negative earnings of Rs2.52 for the same period last year.

The company’s profits fell even though revenue went up by more than 17 per cent. This can be attributed to an increase in fuel costs, which went up from Rs12.2 billion to Rs19.5 billion.

“Oil prices at the beginning of last year had hit rock bottom and they were being traded at $40 per barrel. However, rates have been steadily rising since then and oil is being traded in the $70 to $80 band for quite some time now,” commented Khurram Shehzad, Research Head at Invest Capital.

He explained that even though the finance cost went down compared with last year, it still represented a large chunk of the outlays incurred by the airline.

Shehzad was hopeful that results for the second half would be better as occupancy rates are usually higher because more vacation time is recorded during the later part of the year.

Published in The Express Tribune, August 27^th, 2010.