If you took a Pakistan International Airlines flight from Karachi to Lahore last year, you might not have known but the airline had already burned Rs11 million of taxpayer money by the time your plane had landed. This is because the national flag carrier lost Rs107,000 every minute in 2019.
Despite cutting its operating loss by 76%, PIA booked a net loss of Rs55.4 billion, the company revealed in its financial results on Tuesday.
Barring a profit in 2008, government-owned airline has been hemorrhaging money since then and has not been able to pay its debt or fund its operations. It relies on bailouts from the government to stay afloat. As of March 2020, PIA’s debt was Rs137.7 billion, the highest by any public sector enterprise and nearly a tenth of total PSE debt. The company has not paid shareholders any dividend in the last seven years.
As the result announcement came out, PIA’s stock rose 51 paisas from its opening value to close at Rs4.83 per share with more than 6 million shares changing hands, its highest turnover for the month.
Since PIA’s shares are not traded actively like other liquid stocks, it is not covered by market analysts, thus there was no forecast for the result. However, the airline was able to report its first gross profit in eight years, thanks to a 43% surge in its revenue. It earned Rs147.5 billion in 2019 compared to Rs103.5 billion of the preceding year.
“The salient features of financial results for the year 2019 are attributed mainly due to route optimization and fare rationalization, enhancement of ancillary revenue by the double digits while undertaking stringent cost discipline in all aspects of the business,” the company said in a press release. PIA serviced more than Rs19 billion of its loans, it said.
2020, a challenging year
The airline cut its net loss by Rs10 billion last year. ‘The current year (2020) is a very challenging year for the aviation industry, keeping in view the Covid-19 pandemic, extra efforts would be required and tough decisions would be taken for the betterment of the airline,’ Chief Executive Officer Air Marshal Arshad Malik said in the press release.