Pakistan International Airlines (PIA) has incurred a loss of Rs 31.9 billion in the ongoing year because of the COVID-19 pandemic. PIA Chief Executive Officer (CEO) Arshad Malik, revealed this while briefing the cabinet on the progress and strategy to revive the airline.
He told the cabinet that PIA revenue grew 42.5 percent in 2019. However, the progress received a massive blow due to the coronavirus in the current year.
In response to Prime Minister Imran Khan’s question regarding the airline’s debt, Malik said that the total payables stand at Rs 400 billion with an annual interest of Rs 24 billion.
He informed the meeting that 2019 was the year of progress for the national carrier as it witnessed a revenue surge of 42.5 percent. For the first time in eight years, the national airline earned a gross profit of Rs 7.8 billion in 2019 compared to a gross loss of Rs 19.7 billion in 2018.
Moreover, before Covid-19 the operating loss of PIA was reduced to Rs 7.7 billion in 2019 against Rs 32.1 billion in 2018, showing a 75.9% improvement.
Some of the reasons are 82.5 percent improvement in seat factor, increased passenger base, cargo, charter services, excess baggage, and others, which earned a revenue of Rs 44 billion. Further, three grounded aircraft were also made operational using indigenous resources, the CEO said.
Other factors include the replacement of loss-making routes with profitable ones, the introduction of cost-cutting measures and merit policies, and improvement in corporate discipline.
However, due to COVID-19, PIA could not sustain its earnings. Normal operations were suspended in the first week of March and from the last week of the month, there was complete suspension.
The initial revenue target was set at Rs 194.5 billion and the operating profit target at Rs. 0.3 billion. However, it was revised downward to Rs 94.5 billion and projected operating loss of Rs 31.9 billion following the coronavirus outbreak.