PIA continues its flight in the red
Incurs loss of Rs32b in 2014, first-quarter result shows loss of Rs1.94b.
Net loss during January to March 2015 was Rs1.94 billion despite a gross profit of Rs5.7 billion. PHOTO: AFP
KARACHI:
Lower fuel cost and a cut in administrative expenditure was not enough to stop the financial hemorrhage of Pakistan International Airlines (PIA), which recorded a net loss of Rs32 billion in 2014.
Despite recording an improvement over the previous year when the national flag carrier booked a record loss of Rs44 billion, the continuous ride in the red shrouds its future, according to financial results released on Tuesday.
Net sales rose by a marginal 3.8% to Rs99.5 billion as the airline re-focused on profitable routes and leased aircraft to increase the size of its fleet.
Fuel cost dropped 12.7% to Rs48 billion due to the slide in international oil price but other expenses related to managing a fleet of aged aircraft, landing charges and salary expense of a large workforce resulted in a gross loss of Rs1.9 billion.
An exchange gain of Rs3.1 billion on the back of rupee’s appreciation last year contributed in reducing operational loss.
Additionally, the high interest cost at Rs14 billion further marred the bottom-line. PIA management believes that the government would have to reschedule the airline’s long term debt.
First-quarter 2015 results
PIA also released its January to March 2015 quarter results, which showed little difference from the previous year.
Net loss during the period was Rs1.94 billion despite a gross profit of Rs5.7 billion. The airline was even able to book an operational profit of Rs2.1 billion mainly because of a 50% decline in fuel cost.
But interest expense of Rs3.37 billion eroded that gain.
Published in The Express Tribune, May 6th, 2015.
Lower fuel cost and a cut in administrative expenditure was not enough to stop the financial hemorrhage of Pakistan International Airlines (PIA), which recorded a net loss of Rs32 billion in 2014.
Despite recording an improvement over the previous year when the national flag carrier booked a record loss of Rs44 billion, the continuous ride in the red shrouds its future, according to financial results released on Tuesday.
Net sales rose by a marginal 3.8% to Rs99.5 billion as the airline re-focused on profitable routes and leased aircraft to increase the size of its fleet.
Fuel cost dropped 12.7% to Rs48 billion due to the slide in international oil price but other expenses related to managing a fleet of aged aircraft, landing charges and salary expense of a large workforce resulted in a gross loss of Rs1.9 billion.
An exchange gain of Rs3.1 billion on the back of rupee’s appreciation last year contributed in reducing operational loss.
Additionally, the high interest cost at Rs14 billion further marred the bottom-line. PIA management believes that the government would have to reschedule the airline’s long term debt.
First-quarter 2015 results
PIA also released its January to March 2015 quarter results, which showed little difference from the previous year.
Net loss during the period was Rs1.94 billion despite a gross profit of Rs5.7 billion. The airline was even able to book an operational profit of Rs2.1 billion mainly because of a 50% decline in fuel cost.
But interest expense of Rs3.37 billion eroded that gain.
Published in The Express Tribune, May 6th, 2015.