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PIA reports 9-mth loss of Rs20.55bln despite low fuel cost

By Salman Siddiqui
January 19, 2016

KARACHI: Pakistan International Airlines on Monday reported a net loss of Rs20.55 billion for the nine-month ended September 30, as low ticket prices, losing making routes and negative currency effects offset virtually all the benefits of lower fuel prices, analysts said.

The airline however, managed to cut its losses by 7.83 percent from the last year’s same period losses of Rs22.29 billion, the national flag carrier said in a bourse filing.

 The jet fuel accounted for about 49 percent (or Rs37.83 billion) of the total cost of services of the airlines during January-September 2014. The fuel cost declined to around 33 percent (or Rs21.67 billion) in the under review period.

The airlines also booked a loss of Rs2 billion on account of currency exchange against a profit of Rs2.36 billion in the corresponding period.

PIA reported operating loss of Rs8.95 billion, which is almost 17 percent lower than Rs10.74 billion in the same period last year. The cost of finance (interest payment) remained stagnant at Rs10.02 billion as compared to Rs10.81 billion in the same period last year.

 The cost of services increased by around eight percent to Rs43.10 billion, sales revenue fell nine percent to Rs69.24 billion during January-September 2015.

 The loss per share for 'A' class ordinary shares of Rs10/each remained at Rs4.07 from Rs4.97 in the nine-month 2014. This for 'B' class ordinary shares at Rs5/each fell to Rs2.04 from Rs2.49.

The board of directors also approved financial results for two quarters at separate meeting. Accordingly, the September-end quarter losses of the Airlines reduced 44 percent at Rs6.53 billion. For the quarter ended June 30, 2015, however, it reported 52 percent increase in losses to Rs11.91 billion.

PIA remains on top of the list of Privatization Commission of Pakistan since long. The International Monetary Funds, the leading creditor to the country, has also been urging the government to get it privatized sooner than letter.

The government, in December converted the repealed PIA privatisation ordinance into a bill to keep the sell-off option 26 percent shares to a strategic partner with management control open.