Pakistan International Airlines’ (PIA) has always been in the news for all the wrong reasons. PIA continues incurring losses, a dilemma which PIA has been facing for the past few years. The numbers have reached an alarming figure soaring to Rs319.10 billion from Rs11.52 billion in the quarter ended March 2017.
The loss per share increased to Rs2.19 from Rs1.15 for A class ordinary shares of Rs10 each. The loss per share for B class ordinary shares of Rs5 each rose to Rs1.10 from Rs0.58.
PIA had net revenue of Rs24.61 billion in the quarter compared to Rs24.76 billion in the same quarter of previous year. However, it could not be translated into profit due to high expense of services like fuel. The distribution and administrative cost was also high.
The financial results at the year-end, December 2016 show that PIA incurred loss of Rs45.24 billion.
International airlines are also given preferences. Furthermore, the governments, new open skies policy has allowed the international airlines to be used for the domestic routes. This policy has also contributed to losses faced by PIA.
The government has allowed Gulf airlines, particularly from United Arab Emirates (UAE) to operate to and from multiple airports in Pakistan, which is driving up PIA losses.
An industry official said, “PIA is also operating numerous under priced flights on many routes to appeal higher traffic. The practice is not only causing losses, but it is also effecting true competition.”
For example PIA has recently started flights to Bangkok at a discounted rate.
PIA has started taking measures to improve the image of PIA. Under the leadership of CEO Rasool Cyan and new management, revamping of PIA is under way. A new business plan would also demand a bailout package in the coming weeks.
As PIA continues incurring losses the new management of PIA took some resolute actions. PIA is taking action against extra employees. Furthermore, the flights to the US are also suspended as they were resulting in Rs2.25 billion loss per year.
PIA incurring losses is not a new thing. The national carrier has been facing crisis since long. It is high time strong measures should be taken to bring back the good old days of PIA.