Pakistan International Airlines reports a loss of $207.5 million for 2007

[fatman17]

Pakistan International Airlines reports a loss of $207.5 million for 2007

02 May 2008

Pakistan International Airlines (PIA) said it has ended an "exceptionally difficult" 2007 with a PKR13.4 billion ($207.5 million) loss. Operationally, it was also blacklisted by the European Union during the year, which hit its bottom line along with its prestige.

Losses for the year have widened slightly from a loss of PKR12.76 billion recorded in 2006.

A PIA statement said that the airline had "experienced a series of financial, operational and marketing problems" that left its "brand severely dented, [it] lost market share as well as growth in business which made the situation still more difficult."

The airline was reinstated fully by the EU last November.

A fall of 0.2% in full-year revenue, to PKR70.48 billion, was mitigated by a fall in expenses by 5.2% to PKR66.22 billion. However, non-operating costs, related to increased borrowing, went up nearly 50%. Operating loss also came down to PKR5.94 billion from PKR8.45 billion in 2006.

The airline said it was a "late starter" on fuel hedging but reduced utilization of its less-efficient aircraft to reduce the impact of rising fuel costs. It transported 5.4 million passengers last year, down 5.5%, and flew 13.68 billion RPKs, which was a drop of 9.5%.

Load factor was down 1.1 points to 67.4%.

 

[blain2]

PIA is a net loss. It should be disbanded in favor of private airline companies. The government cannot fund it and it just can't get over its inefficiencies and problems.

Maybe a better deal would be to privatize it.

 

[AgNoStiC MuSliM]

A complete waste - but populist policies and political pressure will not allow it to be privatized.

 

[Neo]

PIA's has always suffered nepotism and incompetance and its heavily overstaffed.
Privatisation only can save it from abyss.

 

[mujahideen]

PIA's has always suffered nepotism and incompetance and its heavily overstaffed.
Privatisation only can save it from abyss.

I agree with you on the part that its nepotism, incompetance and its overstaffing that has destroyed PIA, but I dont think privatization is the only way out of this mess. What is needed is good management their, which will enable PIA to get out of the situation it is in. But then its hard to find good management in Pakistan, so maybe you are right.

 

[EagleEyes]

Privatization is the god given key.

Plus in the current political situation i dont expect much travelers to Pakistan anyways. But even in that situation it should be capable enough to recover the cost.

Therefore, as it is hinted it is inefficient and deserves no sympathy.

 

[smt]

iv never liked pia. once wen flying on pia, the plane smelt like a diaper, this was after they dilayed the flight several hours, and told us the smel was becuz they hadnt had time to clean the plane, and i actually had cockroaches roaming around me.

 

[never]

pia is a reflection of politics is in pakistan

 

[maqsad]

Why don't they just fire 30% of the non-technical staff of PIA? From what I gather, a couple of the crashes of the fokkers were due to poor maintenance and because many of the technicians had run off to better paying jobs in Saudi and UAE etc. But on the other hand we have beaurocrats sitting and doing nothing in PIA while people are dying in the open in flames. Some of the money saved can be used to give the technicians and pilots raises, better maintenance on the aircraft.

 

[azmax007]

why am i not surprised...my pakistani freinds refused to go to karachi in PIA becz ofthe poor service. They prefer Arab airlines over their own country's airlines.

 

[Neo]

The problem with PIA​

ENDLESSLY in turmoil, PIA’s affairs are a microcosm of governance in Pakistan. The national carrier, like many other state-run institutions, mirrors the myriad shortcomings of governments past and present: absence of a long-term vision, economic mismanagement, whimsical decision-making, vindictive politicking, rampant cronyism and lack of continuity at the helm. Little wonder then that Pakistan International’s deficit/debt now stands at a truly staggering Rs45bn and customer confidence in the airline is abysmally low. PIA has seen as many as five managing directors since 2005, the latest sighting on the baggage carousel being Capt Aijaz Haroon. He may be a fine pilot who is popular with his colleagues but is yet to demonstrate the financial acumen or top-flight management needed to turn around an organisation so mired in the bog as PIA. At a time when the airline needs a crack troubleshooter of proven pedigree, it has been saddled with an MD who appears to owe his appointment less to his credentials and more to his standing in the political quarters now calling the shots.

The new MD took over on May 7 and it took him just two weeks to order the reactivation of the B747 Jumbo fleet and the reinstatement of flight engineers sacked in March this year. This is not to suggest in any way that the original decision was correct. Far from it. It took Capt Haroon even less time — just one day in office — to sack 15 senior officials hired on contract. Again, defending the earlier appointments is not the intention here. The point is this: can 15 case files be given a fair read in one day and are two weeks enough to conduct exhaustive feasibility studies on the operations of some half a dozen Jumbos? If the original decisions were whimsical, so were the actions taken this month.

What PIA needs is a comprehensive business plan that takes the longer view and is based on the recommendations of diverse expert sources, as opposed to the offerings of confidants and yes-men. The new MD intends to cut costs across the board and that is all very well. But it is critical at the same time that this belt-tightening does not make the prospect of flying on PIA even less desirable than it is now. The management should also give some thought to routes rationalisation, fleet modernisation and aggressive marketing, and it goes without saying that some aspects of this strategy will require a huge injection of funds. But given the state of the government’s coffers, how this cash will materialise is anybody’s guess. What with spiralling fuel costs, even top-flight airlines are feeling the pinch these days and competition in aviation is cut-throat. Ad hocism in these testing times will get PIA nowhere.

DAWN - Editorial; May 26, 2008