Saving PIA

One thought that, with the induction of new management in PIA last year by the PTI government, the fortunes of the national airline would improve. But, instead of improvement, its financial health has greatly deteriorated over the past one year. The losses suffered by the airline were Rs45 billion in 2016, Rs48 billion in 2017 and Rs67 billion in 2018 as per the audited financials. As per the unaudited results available for the half year, January to June 2019, the losses are reported at Rs33 billion. With this trend, the loss for the whole year of 2019 is expected to be around Rs66-67 billion – unchanged from the year 2018. The accumulated loss has swelled to Rs471 billion while debt and other liabilities stand at an all time high of Rs516 billion.

Revenues in dollar terms have not shown any improvement though the management recently boasted of a 40 percent increase in revenue. Its claim of cutting down on expenditures is also not corroborated by the reported numbers. The airline is experiencing a serious cash flow problem. The government, through its aviation ministry, must carry out a detailed review of the operational and financial performance of the airline to pinpoint mismanagement. The government had promised to restructure the loss-making state-owned entities (SOEs) and turn them profitable. A management team with aviation business experience needs to be inducted before PIA collapses.

Arif Majeed

Karachi