ISLAMABAD – Pakistan International Airlines (PIA) has reached a disastrousstage of financial collapse as the losses have touched the unprecedentedlevel in FY 2017-18.
PIA faces a loss before tax of Rs54.2 billion for the eleven month periodfrom September 2017 to July 2018, as financial woes continue amid reportedmismanagement and interdepartmental conflicts.
A 29.13 per cent increase in loss before tax compared to Rs41.9 billion forthe similar period of last year.
According to the data, fuel cost standing at Rs34.8 billion and otheroperating cost standing at Rs89.4 billion for the period has increased by26.3 per cent and 10 per cent respectively on a Year on Year (YoY) basis.Loss from operations for the period stood at Rs38.6 billion, up 33 per centYoY.
An official spokesperson of the national carrier while talking to Profitsaid that the revenue for the period has gone up, however, three majoritems have considerably increased losses.
“Fuel costs have escalated by nearly 34 per cent, the Pakistani Rupeedevalued from a budgeted Rs110 to Rs131 for one dollar. It is now back toRs125. Nearly 80 per cent of our expenses are in dollars which explains theescalation in operating cost,” he says.
“Thirdly the finance costs have increased due to added borrowing in orderto overcome last year losses. The principal and the interest payments haveescalated. We asked the Finance Ministry to take decisive actions to takecare of our interest payments so that our balance sheet is relieved of themassive debt servicing that we have to take care of, but that has not comethrough yet. Right now all the debt servicing is done through our ownrevenue streams and cash flows.”
A report submitted by the national carrier in June in a suo moto caserevealed liabilities of Rs406 billion on the companies balance sheets. “Thebalance sheet is now very weak with total liabilities amounting to Rs406billion against assets of only Rs111 billion. Today, PIA is only able tocontinue operating due to the government’s financial support,” read thereport.