PIA losses jump to Rs 416 bn: Senate told

[Wa Muhammada]

So many mixed reports coming out regarding PIA

I read an article in the Dawn two weeks ago that PiA was becoming profitable...

I think it’s not out of the realms of reality that PTI govt is spreading false propaganda...saints & sinners

https://twitter.com/x/status/1126816839634509824

With due respect...he needs to show proof....that will be the final nail in the coffin for this govt

 

[313ghazi]

Fao growth stunted patwaris...

PIA is currently not making losses, its costs are equal to it'd income. These losses are those it has historically incurred. PIA will need to make profits to pay off these historic losses. Due to interest rates historical losses may continue to rise as interest added on them may be more than PIA can pay back per year. This will continue until either PIA earns enough to pay debts, or PIA goes bankrupt, or PIA is sold to someone else.

 

[Wa Muhammada]

Fao growth stunted patwaris...

PIA is currently not making losses, its costs are equal to it'd income. These losses are those it has historically incurred. PIA will need to make profits to pay off these historic losses. Due to interest rates historical losses may continue to rise as interest added on them may be more than PIA can pay back per year. This will continue until either PIA earns enough to pay debts, or PIA goes bankrupt, or PIA is sold to someone else.

Isn’t it better if PIA goes bankrupt and then sells to a private business?

 

[valkyr_96]

Isn’t it better if PIA goes bankrupt and then sells to a private business?

first of all PIA is bankrupt if it is sold it will sold for "pennies on the dollar". Thus there is no money to be made here. The private investor will be foreign as no such investor is available within Pakistan. This investor will not take on the liabilities of PIA. The best way is to improve PIA which is highly possible but in the long run. Of course people won't want that because a profitable PIA means that other regional airlines (conflict of interest) will not be profitable.

 

[Samlee]

Rs 416 Bn = US$ 2.94 Bn. That's really bad for a small airline.

Sell The New York and Paris Hotel.All Losses Will Be Covered

 

[Jf Thunder]

That is operational break Even, meaning operating costs=operating revenue.
But an airline also has many non operation expenses and interest payments for loans.

Air India also has same problem, it has got operational break even in 2016 but still faces big problem of non operatings costs and interests payments .

so its basically a stunt to make a fool our of the public

 

[Fawadqasim1]

https://twitter.com/x/status/1126816839634509824

He should put the evidence before nab and the courts doodh ka doodh pani ka pani ho jayega.
Sirf taqreer karney se tau kuch naheen hoga.

 

[valkyr_96]

so its basically a stunt to make a fool our of the public

To a foolish person it will seem like a stunt (maybe get an education) but it also means that PIA break-evens or makes a small operating profit. This means that PIA is capable to run its operations on its own bar the cash cycle which is always funded through short term/running finance credit lines. The other cost is interest payment. This will take time to materialize or the government can take it on its own balance sheet and viola PIA will be fully profitable. The only issue holding PIA down is the illegally employed who sucking the blood out of the system.

 

[313ghazi]

Isn’t it better if PIA goes bankrupt and then sells to a private business?

I'm not sure. It is a state owned enterprise. Bankruptcy protects the personal wealth of people who run private businesses which fail, but comes at the cost of thier business and often losses incurred by thier debtors.

Legally what happens if a state owned enterprise does this? Can the state legally wash its hands, or does the burden fall on the taxpayer? Does it impact the states ability to get credit? I'm not sure.