PIA shows losses once again

[Abbas Ali]

KARACHI: The national flag carrier, Pakistan International Airlines (PIA) Corporation, on Thursday declared a loss of Rs 2.070 billion despite a growth of 13 percent in its revenue in the first half of the current calendar year.

"The volatility in fuel prices is continuously hurting the industry," said its chairman in a statement. "The increase in revenue though did not translate into profitability due to a 50 percent increase amounting to Rs 3.7 billion in the fuel expenses."

He said the management is committed to put the airline on the path of sustainable profitability and faster growth and the result would be visible in the coming months. The airline declared a growth of 12.3 percent in revenue generation to Rs 30.026 billion in January- June 2005 period compared to Rs 26.507 billion in the same period last year, while its cost of services have increased by 23 percent to Rs 27.100 billion from Rs 22.041 billion in the same period.

The gross profit of the airline in the first six months of the calendar year stood at Rs 2.926 billion compared to Rs 4.466 billion in the same period last year.

The corporation has claimed that the management is conscious of the adverse effect of the continuing high fuel prices and to mitigate the impact and restore profitability in the shortest possible time. Both passenger and cargo business contributed to the increase despite severe competition from foreign carriers and private domestic airlines.

The fuel bill rose to Rs 112 billion in 2005 from Rs 7.5 billion 2004 as PIA's average fuel price increased to Rs 91.24 per US gallon for the period under review as compared to Rs 61.08 per US gallon in the corresponding period last year. This is the primary reason for a 23 percent increase in the cost of services, the statement said.

The revenue passenger kilometers increased to 6.823 million in Jan-June 2005 against 6.679 million during the same period 2004. Seat factor improved to 69.5 percent against 67.6 percent. Similarly on the cargo side, revenue freight tons kilometers increased by 6.6 percent to 189 million compared to 177 million in the previous fiscal. The load factor was higher at 58.6 percent against 51.6 percent during 2004.

The statement said the strong traffic demand worldwide had provided an opportunity to counter this by tapping the growth through improved service level, competitiveness and enhanced cost efficiency. As part of recognition of marketing department four strategic business units (SBUs) created namely passenger sales, cargo, business tours and charters and other income streams. With the focus of the customer and his needs, the strategy is built around three "Cs" -- convenience, comfort and competitiveness, the statement said. At the Karachi stock market, the share price of PIAC closed at Rs 7.25 after losing 30 paisas on Thursday. staff report

Source: Daily Times

[amin007]

I also lost quite a lot on PIA shares, its really a shame....they have all the passengers they need and more staff than needed but still hiring more ! what can we say?

[Moin]

And then we'll have those elements that say that these losses are caused due to the induction of the 777's and the sale/loss of those holy omni potent/omni present AB4's.

They must be rubbing their hands together with glee now. Fodder!

[hajafri]

Say something new Abbass about the only National Flag Carrier i can't understand how PIA will survive when 6 new airlines are standing behind PIA getting more and more new routes new aeroplanes more passengers? any comments?

[basit_s]

Say something new Abbass about the only National Flag Carrier i can't understand how PIA will survive when 6 new airlines are standing behind PIA getting more and more new routes new aeroplanes more passengers? any comments?

PIA can survive because its 'state owned'. Which means, Gov can pump money into the aircraft to keep it alive forever.

[CoyBoy]

Is it wise to go for the multiple designs on tail concept now considering it is uneconomical and was so even for British Airways besides being unliked, and even Mexicana tried it and it proved unfeasible for them too.

Simply use Pashmina tail, as it represents all of Pakistani culture, with new shades of green preferably darker and Etihad like white metallic paint on fuselage plus new Global Spirit font for PIA and Pakistan title.

[PakN'US]

So what's new? Perhaps a brand new Mercedez for the Chairman?