PIA losses up 14 percent to Rs30.563bln

KARACHI: Pakistan International Airlines (PIA) recorded losses in excess of Rs30 billion in the nine month period ended September 2017, proving their claims of service improvement hollow.

According to a company statement released to the Pakistan Stock Exchange on Friday, PIA loss during the period increased 14 percent to Rs30.563 billion, up from Rs26.876 billion in the corresponding period last year. The loss per share rose to Rs5.84 compared with Rs5.13/share registered during January-September 2017.

Samiullah Tariq, head of research at Arif Habib Limited, said, “Persistent huge expenses of the national carrier to meet obligations like salaries and other expenses, the company has to borrow from banks, increasing financing cost.”

PIA’s revenue showed little movement during the period under review, as it went up to Rs78.36 billion, up from Rs77.54 billion in the same period of the corresponding year.

Close to Rs22.990 billion was spent on fuel purchases to run their aircraft, whereas during January-September 2016, the cost was Rs19.685 billion, the statement said.

Zeeshan Afzal, head of research at Insight Securities, blamed the rise in crude oil prices for this increase.

“The cost of the fuel rose sharply in 2017 owing to rise in crude oil price globally, average price in 2017 was nearly 53 dollars per barrel while in 2016 it was nearly 41 dollars per barrel,” he said.

The distribution and administrative expenses were on the higher side amounting to Rs12.153 billion during January 2017 to September 2017 compared with Rs12.112 billion registered in the same nine months of the corresponding year.

Net loss climbed 22 percent to nearly Rs7.2 billion during July-September quarter, up from Rs5.9 billion in the same period last year, the notice to the bourse said.

The company did not announce any cash dividend or bonus shares for the quarter ended September 30, 2018, as recommended by the board of directors in the meeting held in September last year, according to the notice issued to the bourse. The PIA's privatisation was included in the early-year agenda of the last PML-N government, but the issue turned so controversial that the government had halted the process last year.