PIA losses mount with delay in lease of new aircraft

Airline sees growth in global aviation industry as oil prices remain stable.

KARACHI: Pakistan International Airlines (PIA) continues to suffer due to delay in lease of new aircraft as it saw a 12.5% decline in revenue and a 42% rise in losses in nine months ended September 2013.

Revenue has come down to Rs71.1 billion from Rs82 billion as PIA continues to face trouble in keeping sufficient number of aircraft on routes. This has adversely affected the airline, which has been forced to cut the number of flights on international routes.

PIA has been asking the government  to release funds for leasing narrow-body fuel-efficient planes, officials say. The national flag carrier has a fleet of 30 aircraft in service, many of which are grounded for want of repair.

The airline posted a loss of Rs31.9 billion despite relative stability in the price of jet fuel. PIA’s Director Report said the global aviation industry might see growth going forward as oil prices have remained stable and tensions in the Middle East have subsided. However, PIA failed to reap any benefits from this situation as the rupee experienced a steep depreciation against the dollar, which added to its expenses.

This can be gauged from the fact that the airline’s finance cost jumped 10.7% to Rs9.3 billion for the nine-month period.

The government has decided to sell off the company after some restructuring, but a detailed plan is yet to be finalised. The company’s management, on its part, has started to take steps to save the cash-strapped organisation. It has constituted a committee comprising former officers and serving employees to propose ways to reduce fiscal leakages and enhance revenues.

Published in The Express Tribune, November 9^th, 2013.

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