KARACHI: Pakistan International Airlines (PIA)’s overall losses will cross over the Rs800 billion mark by the end of the ongoing calendar year and it would require 100 years to pay back its liabilities.
This was revealed during a briefing to the prime minister on PIA’s restructuring and reforms. Minister for Aviation Khwaja Saad Rafique and Secretary Aviation Saif Anjum informed Prime Minister Shehbaz Sharif about the financial status of PIA. They said though that the PIA has started earning profits in the last six months, the airline has already been burdened with losses of Rs724 billion.
Even if PIA runs in profit and it outperforms other international airlines, it will require a century to redeem Rs800 billion debt given the fact that even the best international airlines cannot earn more than 3.5 percent operating profit. Similarly, if PIA earns Rs250 billion in revenue during the ongoing year, its profits cannot go beyond Rs8 billion as per the industry’s average profit. Therefore, PIA would require 100 years to pay off Rs800 billion loan.
During the briefing to the prime minister, one of the recommendations was to shut down the airlines permanently but it fell short to be a viable option as the closure of PIA at this point of time will incur Rs724 loss to economy which is already in crisis. Another suggestion was to split the airline into two organisations.
