Saturday, September 23, 2023

PIA posts Rs38 billion loss in first three months of 2023

Pakistan International Airlines (PIA) reported a loss of Rs38 billion in the first quarter of 2023 through March 31, a staggering 171% increase compared to a loss of around Rs14.3 billion in the same period in 2022, reflecting the challenging financial situation faced by the national carrier.

During the first three months of the year, PIA’s revenue amounted to only Rs61 billion, further emphasizing the magnitude of the loss. The cost of services soared to Rs54.6 billion, compared with Rs33.6 billion in 2022.

Administrative expenses surged to Rs4.3 billion from Rs2.8 billion, while the distribution costs increased by 42.9% to Rs1.99 billion compared to Rs1.39 billion during the first quarter of 2022.

Fuel costs during the period had a massive 111 percent increase from Rs12.1 billion in January-March 2022 to Rs25.5 billion in the same period this year.

Contributing factors

Several factors have contributed to PIA’s financial woes. The appreciation of the dollar against the rupee resulted in a loss of Rs21 billion while rising oil prices and interest rates added to the company’s financial struggles.

Due to significant changes in exchange rates, there was a total loss of Rs21 billion compared to the previous year, the PIA spokesperson claimed.

“It is pertinent to mention here that as an international airline, PIA’s expenses, are incurred up to 80 percent in foreign currency,” the spokesman highlighted.

Negligence in administrative matters led to an increase in operating expenses, with costs rising by Rs15 billion to reach Rs43 billion.

Rising bird strike incidents

The airline has also been dealing with a significant number of bird strikes, causing damage to its aircraft and incurring additional costs. Over the past five months, 29 bird hits were reported at domestic airports, with 10 incidents occurring in May alone. Karachi and Lahore airports were particularly affected, with seven planes sustaining damage.

PIA’s administration has released statistics on bird strikes, showing that a total of 16 incidents occurred at Karachi and Lahore airports alone. In the past five months, bird strikes were also reported in airports such as Islamabad, Faisalabad, Sukkur, Quetta, Peshawar, Gilgit, Multan, Jeddah, and Bahrain. While seven aircraft sustained damage from these incidents, fortunately, 22 cases did not result in any damage to the airplanes.

The financial loss and the challenges posed by bird strikes highlight the need for PIA to address various operational and financial aspects to improve its performance and ensure sustainable operations in the future.

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