PIA looking to steer itself upwards

Chairman says airline has recorded operational loss of under Rs1b

KARACHI:

Pakistan International Airlines (PIA) appears to be coming out of years of stagnation, as it recorded an operational loss of under Rs1 billion in the six-month period that ended on June 30, 2015 - more than half of what it had to book in the same period of the previous year.

This figure was shared by PIA Chairman Nasser Jaffer during a press briefing on Thursday. However, he refused to divulge further details since financial results are yet to be formally announced.

In accountancy terms, operational profit or loss is the amount left after paying all operational costs of a business, but before interest and tax expenses.

This can still be considered a poor performance relative to the first quarter of 2015, which saw the airline post an operational profit of Rs2.14 billion.  That was mainly due to a 50% decline in cost of jet fuel.

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Jaffer said as PIA inducts the highest-ever number of aircraft in its fleet at any point in time, the management has started to review possible routes where it can establish a foothold.

Currently, PIA is operating with a fleet of 35 aircraft, which include 13 Airbus 320s and five ATRs leased over the past year. Four additional A320s and two Boeing 777s will join the fleet later this year.

“We are looking at different possibilities of how to place the airline. We are looking at China, Saudi Arabia and key routes of London and Toronto,” he said.

“PIA might even be positioned as an ethnic carrier,” he said, disagreeing with the perception that the state-run airline was already focused on catering to Pakistanis.

“That is not correct. PIA is serving a primarily ethnic traffic because of security concerns in the country that discourage foreigners from coming here. But this is not a deliberate attempt on our part.”

Emphasis on transparency

Over the past one and a half year, the airline has taken various steps to upgrade service standards and boost employee morale. As part of its effort to weed out corruption, around 308 employees who had entered jobs on fake degrees have been fired.

In what could be termed as a major improvement facilities, the airline has started handing out iPads to passengers on flights to London, New York and Toronto.

Often, the entertainment system in PIA’s long-haul flights has been said to have not worked, leading to negative reviews among passengers. But replacing the systems in public sector organisation like PIA which is governed by stifling procurement regulations remains a long process.

As a quick solution, the airline has decided to use 350 iPads, which are currently only available for business class passengers. But the facility will be extended to economy class in coming weeks.

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About delays that plagued the airline in the last few days, Jaffer took responsibility, but insisted that unusual incidents played their part.

Two aircraft suffered technical problems including the jet, which was hit by a van on the runway, he said, causing the airline’s flight schedule to go off track.

“PIA is operating 148 flights to take 55,872 pilgrims to Saudi Arabia for Hajj and that is our main focus these days. So there could be slight problems.”

The airline claims it has maintained punctuality in 96% of its Hajj flights up till now.

Published in The Express Tribune, September 11^th,  2015.

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